patrick.net

How about a conforming (4 or fewer units) multiplex. It gets you into the game (which you seem eager to do), and you come out ahead on all fronts. You can always move out (into a SFH) if and when the time is right.

alexn74 says

It’s hilarious to see asians giving advice to a jewish born in Russia gal whose actions are solely dictated by her parents born in Soviet times, i.e. the only goal in life is to own a RE.

On one hand you are right "parents are overbearing", but I must say, when it comes to money decisions they are really smart themselves, so far agree that buying now may not be the best approach.
Needless to say - mother is an mortgage underwriter.... just not in CA.

pkennedy,
thank you for putting the time to give an answer. I truly do appreciate it.
So as far as savings - you are right on the ball. My projects are exactly that 100K in 3.5years myself. Actually this has been what I've done over past few years. And that not including 401.K at maximum, ESPP, IRA yearly, BONDS, and interest income, and purchasing a luxury brand new car (may not be the best idea, but that was my present for the hard efforts, and payback for someone totalling my 1st corolla, which was also paid off in full in 2 years)...
Not to brag, I don't believe I am stingy, but I do pretty well with savings and such.
As far as his income that is exactly it! He is not able to pull together savings, due to a large debt which he encountered through the market crush. For the next 10 years, his paycheck is all 'spent'. Hence we both felt that he would not be participating more than paying a rent. Do I care for the guy? Yes I do. Do I care he is in such situation? yes I do. Will I put myself at risk due to his debt - NO. Hence no marriage until debt is settled. Kids that's a different story, though I hate the idea of doing it that way, I may have to, as I am not getting any younger.

So back to original discussion.
On one hand it is great to take a chunk off the mortgage. Why waste money on interest (and it is significant sum). Yet, in market like today, I am not sure that' would be my best benefit.
Morally, I would still owe per contact, hence if I put lets say 60% in. I can afford the monthly payment, but if prices decline, bank got the pay, and I missed out. Morally that's the way to go, in my opinion!
Now if I put 20% down (which I am able to do already, leaving just as much in the bank), if prices fall, bank would work (may be, hardly doubt but at least a chance) to help me. But I keep the hundreds of thousands that I made, allowing me to start a new.

But all in all I see a picture. I shall wait and see, but be in touch with the market. Consider a townhome in an area with good elementary/middle (for resale), where my payment would be similar or only slightly above of what I am paying in rent today.( BTW 3/2 is easier to resell than a 2/2 or 2/1. But if prices rise again, it won't matter as much in CALI.)

CBETA says

Now if I put 20% down (which I am able to do already, leaving just as much in the bank), if prices fall, bank would work (may be, hardly doubt but at least a chance) to help me. But I keep the hundreds of thousands that I made, allowing me to start a new.

Quoting myself. Do we really think ALL people foreclosing due to lack of money to pay. They are about 30% of them who could pay, but chooses to save now, rather than waste. They tell themselves "forget about credit", now I need to get ready to live w/o it.
I will say this I like credit, but too many here have forgotten that it is not a free money. It is something that must be repaid! Somewhere deep down, I am glad, even for these people, perhaps dealing with hard cash will teach them back that credit is NOT money. That when spending you need to have a very secure resource for repaying (moral part)
When I purchase something with credit (RE would have to be an exception), I always have this same amount in cash, plus enough to last me 1 year (though they recommend at least 6mo)
Per my mother who is underwriter, she says when giving loans she always looked for people to have steady income prior to, and proof that they will most likely continue to receive it, made sure that new debt plus all debts were only at 33% income (we are dealing with smaller states, where salaries are usually under 50K), 6mo minimum to cover this expense plus all other monthly expenses based on past 12 mo of statements, and good credit standing. She held and still has the lowest 'defaulted loans' rating, which shows how many loans out of all she underwrote went to default.
That tells me she did something right.
Particularly she is shocked by California's market. BTW I tried getting approved through her bank, they said "No way, too Risky in Cali"

CBETA, first of all, understand we are in a bubble.

It took 15 years under a far better economic climate for prices to double in prior decades, 1980 to 1995. Since 1997 to 2006 prices tripled. Incomes nor inflation have kept up with prices.

http://www.housingbubblebust.com/OFHEO/Major/NorCal.html

You have plenty of time to focus on your career goals and watch the markets here. Prices are not going back to peak years. As you indicated prices are still well above 3x normal salaries for you and many others. So kick back have a brewski and watch the surfers at Steamers lane in santa cruz Saturday morning.. who knows you might get lucky!

CBETA says

Per my mother who is underwriter, she says when giving loans she always looked for people to have steady income prior to, and proof that they will most likely continue to receive it, made sure that new debt plus all debts were only at 33% income (we are dealing with smaller states, where salaries are usually under 50K), 6mo minimum to cover this expense plus all other monthly expenses based on past 12 mo of statements, and good credit standing. She held and still has the lowest ‘defaulted loans’ rating, which shows how many loans out of all she underwrote went to default.
That tells me she did something right.

Ditto! we seemed to have lost that Good Credit Standards (ie Common Sense) over the past few years.. but it is slowly being put back into practice. Not yet there, but it will take some time. Look for further tighting of credit standards to continue.

I think it's a good decision to buy. I have a friend who's wife did the same as you. She bought a house in Santa Clara while she was single and when they got married they moved to a bigger place and kept her house as a rental. This was back in the 90's during the last real estate bust now they've got about 4 houses and are pretty much set.

yes you are saving money renting but that money you saved gets wiped out if prices go up. Real estate market is cyclical so prices will go down but they will also go up. Better to have an asset so that you're at least in the game even if it's in a so so area.

Prices won't outswing her savings right now. Probably not for a little while. I was told once by a financial banker, when we were discussing personal stock choices, that buying a company coming out of bankruptcy is a pretty good investment, BUT wait until it's come out fully. There could be huge gains to be made, but it could also all go away. You'll still see great gains once it gets out. Essentially don't try and time the bottom, don't catch a falling knife, etc.

This market might be at bottom, many of us think it's pretty close already, if not recovering already. However, it can't hurt to wait another year to see what shakes out, at the very least. If it is going up, you miss the very bottom, if it's not there, you can wait another year or two. Better to catch it on the way up, and solidly up.

As for "10 years of paying off debt" Um. Bankruptcy an option here? Don't most people suggest it if you're over 5 years of paying back a debt at a large portion of take home? If you're not going to use his credit, trash it. 10 years is a VERY long time.

This thing is confusing.

CBETA, some questions for you.

Is this home a primary resident you want to stay in for long years, or is it possible investment you may sell in few years?

Did you talk about buying home with your guy, and what was his opinion?

pkennedy I'm not sure if that's the way I would play the housing market. It's a bit different from stocks in that solidly on the way up could mean it's harder to get the house you want.

Although waiting is certainly least risky since you're guaranteed not to win or lose by not playing.

I have no hesitation saying that now is the time to buy. Of course it depends on what you're buying but at the entry level you are mostly in the clear from any major price declines.
The issue in CBETA's case is the boyfriend situation. I say dump the boyfriend. I'm sure he's a nice person but marrying someone with 10 years bad credit is just a recipe for disaster.

pkennedy says

As for “10 years of paying off debt” Um. Bankruptcy an option here? Don’t most people suggest it if you’re over 5 years of paying back a debt at a large portion of take home? If you’re not going to use his credit, trash it. 10 years is a VERY long time.

well yeah, an option, but there is something to be said about honor. Acquired debt happened because he made a dumb move, but thankfully he was saved. He feels gracious and wants to repay for the effort.

seaside,
I would not plan to sell the house I purchase, for no good reason.
Yes, if I can no longer afford it, I will sell. Otherwise, I'd like to live there. Unless of course I am able to upgrade and/or keep it as investment and live in a better one.