I agree— I think that he bought at the worst possible time – but if he is willing to risk the market drop to not be on the sidelines for a few years thats his choice. It’s a tough decision. If he is going to stay there for the next 10-20 years its not a dumb move. No one absolutely knows where prices are going – they could stay roughly flat for the next x years in which case he has his shelter and isn’t renting. If prices go down significantly (Which I think will happen) then he paid a huge extra fee for the convenience of buying now.
Personally I think that while economically it was a reasonable move, he will be kicking himself when he realizes that he spent an extra couple of hundred thousand to live in a house for a couple of years. If he could buy the same house in 2-3 years for 200K less – then it wasn’t the best move!
