I suggest you wait a few years, until prices drop by 50%. If you can afford to lose equity, wait less time, but in the spring we will see a significant drop as inventory rises, ARM holders cannot afford higher rates and must sell, lending standards tighten later in the year as foreclosures rise. Be patient, it will be worth the wait. We are in escrow now – we are selling a home we just finished building in September 2005. I am selling my dream home because it is so obvious that this market will correct, and we are at the peak. I am waiting to buy a foreclosure in about 4 or 5 years, but it may be sooner than that. Keep reading this website and the links, and you’ll stay updated on the market. My realtor just sold his $729K listing in Walden (near Carmel Mtn); the buyers offered only $649K and the sellers took it because they needed to sell. His comment to me was the other homeowners in Walden would be mad at him for bringing down everyone’s values. The price reductions are really getting going now. Many people are waiting for January to either list or RElist, and the flood of inventory will further depress prices, and there will be a snowball effect. Patience is your friend.