I see my name in the original post but I’m not a pro, far from it, my expertise and life’s work has nothing to do with real estate or economics. I merely learned this stuff online and what I have learned is confined to a very small area, the one I live in. Fundamentals are pretty universal, math works everywhere. I don’t like the math in the upper tier of the San Diego market, but after living vicariously through others for a few years on this site, I couldn’t guarantee you that it will get all that much better. I have a feeling that the market has found it’s spot and should chug along for a while without any wild swings either way. Some of the S.D. market has defied logic during the worst economic times of our lives, it has just as much chance of continuing that trend as it does of instantly reversing it.
But you are different, you have a big cash position. For you, higher interest rates would be a good thing, it will minimize the competition. I do think raes will move higher over time, if it were my money I’d wait to see if that bet plays out (actually if it were me I’d move to my hood, pay cash and never make a mortgage payment again, and still keep money in the bank, but I digress). I do think rates move higher in the next year, if you find the house you love this winter and can afford it, I won’t stop you, affordability and biting off less than you can chew is my favorite plan. But if you find the market frustrates you, with that much cash, you can sit it out a bit and just see what happens, nobody will get priced out before March 2010, winter always sucks for r/e and I highly doubt rates will go lower. Keep a watchfull eye on employment, if we string together a few good months just consider the fuse lit. You are in a an enviable position, you can act in an hour and r/e moves much slower.
Don’t put it all down, keep some reserves, it will help you sleep. Don’t overleverage, stay with the lifestyle you are comfortable with, your health will thank you. Living below one’s means benefits the mind, body and soul.
