This is all so simple for me. I buy when I can get a place for the same monthly payment as rent with 20% down, and I KNOW I can stay there long term. That’s a very comfortable position to be in. Yes, I might lose a little money in the short term (5 years or so) if there’s still some air left in the bubble, but eventually it will catch up. And no way do I buy with any kind of silly financing. A 30 year fixed will eventually make sense even in crappy markets, as rent WILL eventually rise to point where it is higher than my mortgage. I know we’re all bears on this site, but remember, real estate does still provide a hedge against inflation. If the real inflation numbers are considered, not the laughable crap that’s currently reported, I’m losing money on my savings. Probably equvalent to a nominal loss from depreciation on a home once the “big hit” has been taken.
If I could have achieved this when I moved her to LA I would be an owner now. Problem was renting penciled out to be roughly 1/2 what it was to buy. Coupled with the need to unload the place after three years of fellowship (I will never, I repeat NEVER be a landlord again), buying in 06 would have been financial suicide.
I will be looking hard next spring if, Navy willing, I get to return to SD. But if the mortgage to rent ratio is still as nuts as it is now, I’ll be looking for a $3000/month rental. I think we are still in the very early stages of the “big hit”.
