Real Estate is an awesome investment, but when done correctly. The irrationalness of buying a house gets in the way at times. To address some of your concerns:

Real Estate is an awesome investment, but when done correctly. The irrationalness of buying a house gets in the way at times. To address some of your concerns: - Time: It only depreciates if you buy at the top of the cycle and sell before it recovers it's value - assuming you're able to stay in a house long enough for the cycle to recover. Many people can't wait for cycles - when it's time to move, it's time to move. Don't buy if you're unsure about the future of your market. Definitely don't buy if you believe your market will _never_ go down. That's called irrational exuberance and the '07-08 crash was aided by that psychological non-sense. - Money: Let's say you put 200k down into a house in SF and take out a 800k loan, so you pay 1M total for the house. If the market drops 10% over the next year, you've lost 100k in your downpayment. That sucks. Now let's say you waited 2 year from now when the market has cooled off, and you purchase the same home for 850k. You put your 200k down again, but this time, the home increases in value 10% over the next 2 years. Sounds like a better deal, right? Value is correlated to many things, but timing is one that cannot be ignored. - All my money is locked into my house!!!!!: No, it really isn't. I don't understand why many people think this. It's called a HELOC, or Home Equity Line of Credit. You can get one for around 4% annual interest right now. You can take ~80% of your current principal in the house, and pull it out as needed through your HELOC. This is very common and a great way to use principal money as needed. So taking the same example as above, if you have ~250k in principal in your house after 1-2 years, you can use roughly 200k of that money (assuming you pay back your HELOC of course). Now if you're thinking...wait...that means I'd have 2 loans...we'll of course. But when you rent, you get to use 0% of that money for anything. Housing, for most of us, is a long term investment - unless you just have millions lying under your mattress. Looking at things from a 1-3 year perspective is why so many people rent. Again, for some people that's their only option, but if you are fortunate to be able to plan for the 5-10-15 years down the road, you can really make housing work in your favor. Just don't buy this year. Let things cool down :)