I don’t think you need to worry about prices running away but it is only a matter of time until interest rates do.
Be more concerned about taking a big loss. If you were to be forced to sell within the next couple of years, you will eat it big time. A great mortgage won’t help you if you can’t afford it. I wouldn’t expect any appreciation in the short term and you will lose 10% in buying/selling expenses.
You don’t have enough saving to insure that you can sell on your terms and your credit may not support a good loan.
It sounds like you should be able to save $1500 a month so you should be able to build cash fairly quickly. In two years you will be in good shape to buy with better credit.
