You might be able to buy yourself some time and money at the same time, by taking a different approach. Show your wife the Case-Shiller numbers, and the ARM reset schedule. Notice how the price drop tends to accelerate in the fall, and this coincides with the ARM resets. So it looks pretty darn likely that prices will drop 7-10% by the end of the year, and there’s a whole lot more sellers than buyers right now.

Use this reasoning to make offers 10-15% below asking price. Tell your wife you’re offering tomorrow’s price today. If the offer is accepted, you take a lot of the financial sting out of the downside, and your wife is very happy you bought the condo AND saved $40k. If the offer is rejected, low-ball someone else a few weeks later. Time is on your side.

I’m speaking from a bit of experience here… We’ve used this approach a couple times, and the second time almost got a very nice house at an $70k discount. A “greater fool” swept in and paid 99% of list price the week before our seller was closing in Seattle. That was December, and prices are down another 5% since, while we’ve got $25k more in the down payment fund now.