I can’t agree with you completely: “Anyone who buys now is a complete idiot, period. It could take 10 or 15 years for prices to return to today’s levels.” Buying now is a lot better idea than buying 12 months ago. There are some desperate sellers now, a huge inventory to choose from, and you can probably buy cheaper than someone did 12 months ago.
Granted, the market is very soft right now in SD, and will very likely get worse, but a lot of informed people are not forecasting a 30-50% drop in prices. I would say that the average home or condo is off by about 4-5% since 12 months ago. I really haven’t seen anything drop by 10% in the past year, except for some newer housing developments where big incentives are available, and I’m doing residential appraisals every day. Some areas have even seen prices go up slightly in the past 12 months, and a lot of areas are flat over the same time period.
But let’s say that prices drop some more over the next two years, then flatten, then start inching up, and overall are about the same in 10 years. Instead of renting for 5 years, if you can afford it, wouldn’t you rather buy a house sometime in the next year with 20% down and a fixed rate, and start paying down the principle? Granted, you may lose some equity over the next 2 or 3 years, but prices will recover in my opinion. But if you really are convinced that prices will drop 30-50%, I know nothing will make you buy.
