[haakee]

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NM: I actually know a fair amount about the market here, because I've been looking for a while. My general feeling on SF is I always decide it's a bad time to buy and then the market always goes up. I think the tech upturn is gonna stay solid for a while now, so I imagine it's a decent time to buy now. Hopefully haakee will chime in here, he knows more about the market than me.

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I hate to respond since it implies I'm actually reading this forum [img]/images/graemlins/smile.gif[/img] I think it's rarely a bad time to buy if the following things hold for you (1) you can actually afford the place you're buying with a traditional fixed-rate 30-year mortgage, (2) you're not great at saving money on your own (buying forces you to "save money" effectively by making you put money towards an asset that will appreciate over the long-term), and (3) you plan on staying in the place for at least 7 years (long enough that a chances of a nominal downswing are significantly decreased).

That said, I'm not buying now because I think the market will be better in a few years, and #2 doesn't apply to me above (I am good at saving). Purchase/rent ratios are historically very high and while there are some reasons for this (more favorable tax treatment than ever before, historically low interest rates) I see some bad news coming, one being the adjustment of ARM loans which everybody around here seems to have specifically because they couldn't afford the place with a traditional loan. So what happens when their loan becomes more expensive? They can't afford it and have to sell.

There is a school of thought that says that "glamor" markets (e.g. SF, NY, London, Tokyo, etc.) are different. This has never been the case long-term in the past, but maybe the increasingly global economy will make this so moving forward. Perhaps a valid theory but I'm personally not willing to bet an $800K loft on it. (I'm always skeptical when people say "it's different here", or "it's different this time")

There's some good discussion on real estate in general on the Finance & Investing board on here.