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Yes, I'm in Vegas, which is definitely bubble-prone. However, I just sold a residence with considerable equity, so I'm really at no more risk in the new residence then I was in the old. I guess if I was really smart, I would have sold my home and began renting until the market leveled out. But, I'm going to take my chances under the assumption that I'll be in the house for at least 5 years and I plan to pay down my mortgage considerably.

I'm actually doing an ARM, but my rate is locked for 10 years. I did extensive analysis on where I'd be in 10 years using a 30 year fixed and the 10 year ARM, and the extra payment going to principal each payment with the 10 year product made it a no brainer. Famous last words, right?

Excellent analysis!

If it's fixed for 10 year it makes a lot of sense. Use the extra monthly savings and invest them in gold or a commodities index. That would be a good hedge against price swings in the RE market.

How big is the rent vs. own difference per month? A way to determine over valuation is by calculating in how many years it will take to recoup your investment by renting the property. For example, a $50,000 apartment rented at a about $500 will take less than 8 years (assuming no price inflation) to repay the principal.