I don’t think there is a right or wrong decision to your question. There are many positives and negatives to look at. You love the home, but it may be too small in the near future. You can always sell it to move up, but it may be hard to sell a home in Temecula in the coming years. If values go below what you owe, you won’t be able to sell it unless you come up with the difference, so you may be stuck in a home that is too small. Can you continue to live there if you’re stuck. Buying a home in this market may seem foolish to many people, but if you love this home and get a major discount, it may not be a bad choice. You may want to ask yourself, can I truly afford this home. Can you afford to make extra payments to buy down the principal and avoid being upsidedown. These homes will never go below $200K. Are you willing to take a $100K loss. On other hand these homes may only drop another 10-20% and you would be fine. You would be living in a home you love, you won’t have to move your family.
