bsrsharma & enron_by_the_sea hit the key problems in their posts above.
You can’t sell a house in this type of neighborhood and price range unless the borrower is “all cash” or doesn’t need to finance more than $417k………….neither of which is probable. Then, there is the problem with getting an appraisal in a falling market. This is not gloom & doom talking…………..just reality.
If you’re renting, I would continue to do so for a minimum of two more years and see where things go. When prices finally hit the bottom, they’re not going to go back up for years. My guess is that you will be able to buy a similar house in that neighborhood for $400-420k and if you wait another year or so beyond that, you may be able to purchase a similar home for $325-$350k. What happened this week is just the tip of the iceberg. You’re in a market that has growing inventory, rising foreclosures and new loan restrictions and requirements for the borrower. Only a tiny percentage of the population will be able to qualify for a mortgage. If you buy too early and then have to sell before 5-7 years have passed, it his highly likely that you will wind up, upside down. Time to be careful with you hard earned $$$$$.