San Marcos is showing significant price improvement this year as well, I believe this to be mostly driven by tight inventory. Prices in my immediate area have gaped up significantly since December/January. I viewed this as an opportunity, while prices are artificially high, to refi out of an FHA mortgage into a conventional 30 yr. Don’t think I’d be a buyer at current prices. However, I did purchase under similar, but less extreme, market conditions ( limited inventory/ multiple offer bidding wars) back in mid 2009 and don’t think I could have found a better investment considering the combination of leverage, appreciation, and tax efficiency. I’ve seen 30% + appreciation (based on recent appraisal) in less than 4 years on a 320k house I purchased with effectively 1% down ($8K FTB tax credit and a 3.5% down FHA loan). This all seems a little too good to be true and makes me a little concerned that a new bubble is forming.