I live in the San Francisco Bay area. Real estate prices have been extremely expensive for many years and are still going up. The local economy remains badly damaged from the Dot Com but people are buying up residential property anyway. These interest only floating rate mortgages are an invention of the devil. As soon as the prime rate goes up a little bit there will be a tidal wave of foreclosures followed by a collapse of the real estate market. The value of my house will probably drop by at least $100,000. Fortunately my house's valuation is currently $100,000 over what I originally paid three years ago so it'll be a paper loss (I'll still squeal like a stuck hog when it happens).

Anyone who buys into this real estate market is an all-day sucker and deserves to lose their money.

Don't do it!!

Wait a year or two until after the bubble pops and then you'll have good value for your money.

Gary