If that house is truly worth 1.4 by current comps, and you can get it for 1.1 and can afford it you should buy it. Prioes are never going to plummet in an area like that. Manhattan Beach has been soft now for 2 years, so you should be getting a pretty good discount off the peak.
Leave the ego at the door with the timing, that is water under the bridge. You did time the top poorly, so be it. If you can buy this 20% + under the market you should do so because the drop will unlikely be that much anyway basis the median.
I bought a home recently with Adams help, and still cannot believe what I got for the price I paid. There are bargains out there now that may not be there when the overall market is in a more depressed condition. I am familar with this area having lived in El Porto many years ago, and I do agree about your assessment about future availability of homes there.
Best of luck and definitely lets us all know if you pull the trigger.
