Millennial, rates do not need to fall to support appreciation.
Right now buy v rent comparisons strongly favor buying in SD, even without assuming rising rents making renting even worse and rising prices making buying better.
My Nov 2016 condo purchase is already rented out well above the mortage payment, and on top of that each payment reduces my balance and the tax and interest is deducted from rental income. For first and 2nd home buyers, they can deduct these expenses from ordinary income too. I got a pretty good price on it, but even if I paid 15% higher it would still not only be profitable, but more profitable than risk free gov bonds. I would happily buy a 4th property but I am close to tapped out on DP and current condo inventory in 92107 stands at a whopping 3. (In March 2011 condo inventory in 92107 was 53!).
