UCGal, I agree with everything you’ve said. I know sdcellar have given me grief before when I said I was prepared for a 20% loss, but I would advice him to be prepared for the same. Many are talking about 2nd leg down, so if he’s thinking about buying now, buying a house that’s more expensive than rent, buying a house in an area that haven’t seen that big of a decline, he should be prepared to lose 20%. If it doesn’t happen, then he would have prepared for the worse but if it does happen, he won’t be caught off guard. If he can’t stomach a decline and he’s already thinking this might be a mini top, I could see him regretting it if he end up being correct and it does drop some more. I remember he giving grief for talking about staying in the house long term. It sounded like he thinks the average people staying in the house for 5-7 years. I’m not sure if he consider himself as average or not, but I personally would wait if his plan is only 5-7 out. Like you said, if he’s plan is <7 years, the gamble is too risky for my taste.
