I bought my first condo around early 90′s. I was underwater for about 5 years. Not once did I think “I should of this” or “I should have that”. I loved that place even with it being underwater. I think the major problem with RE is that people still view it as an investment instead of a place to live.

As Round 1 – Subprime crisis fades in the background, round 2 – the $1.6 trillion Pay Option ARM Implosion, is taking the stage.

http://www.youtube.com/watch?v=QjY8xVewrPg

Truthfully, it only works with bubble mentality. Because real estate prices only go up and someone always will buy it from me at higher prices in the future.

I understand your point. Unfortunately, if you told that to the guy who bought from 2005/2006/2007, he’d most likely respond to you by saying: “Yeah, I’m in for the long-run, so it’s ok…”. But deep inside, he’s thinking that he should have waited just a bit. Or if you told that to someone who could have sold in 2005 but didn’t, he will also respond to you by saying: “That’s ok, especially since I’ll be living here for quite a long time.” Unfortunately, he’s probably thinking “I should have sold this damn place and rented, or at least downsized”.

Also, if you are a move up buyer, then that implies that the house you currently own is valued much less than the house that you are “moving up” to. Thus, if both of the properties decrease by say 20%, your original house value would drop much less on a dollar-to-dollar basis. (i.e. -20% of $750k is a lot more cold cash lost than -20% of $350k.)

What income level does it require to buy today at mid $700k’s? Perhaps with $150k down, verifiable family income of $130k is required?

A family of this income level should rent now and wait.

It is just a very dated 3/2 that might rent for $2800/month.

Odds are this one will sell for less than $500k in 2011.