My input would be not to view a home as an investment. The mustard has gotten completely off the hotdog in this aspect of home buying, during this unprecedented run we have had. Home prices have barely outpaced inflation historically, so that should be the expectation moving forward. If you work within this view, you will never get yourself into a bad situation where you cannot afford where you live.
It is my view that any home bought, should be done as a place to live happily and be within ones affordability parameters. Any appreciation you get is gravy. Second homes can be where the speculation can be done, and where timing should be employed. For this post, I had assumed you were referring to your primary residence.
I think the RE problem is nationwide, but more extreme in some areas than others. One of my relatives just emailed me last night, and he has bought properties in so many places I cannot even remember them all. He is pushing it to try and retire by 50. As a trader, I have heard and seen these types of things too many times, and the ending is always the same. People tend to become convinced in masses right at the worst possible time, that a new paradigm exists, and the key to riches is right in front of them for the taking. Unfortunately, it usually winds up being the Charlie Brown and Lucie field goal kicking scenario. She pulls that ball away right at the worst possible time, and he goes flying!
Buy where you can comfortably afford to, and also where you like the area and can be happy there. Do not buy just because you think values will rise more on a relative basis, they may not regardless of what any expert tells you.
