[jyl]

Historically, busts in CA real estate prices are about as frequent as booms. CA RE has a boom-bust cycle going back to the 1970s or earlier.

In the long run, last 30-40 years, CA RE has appreciated roughly inline with the SP500. But both have had booms and busts. There are good times to get out and stay out of the SP500 (one was not so long ago), and there is a good time to get out and stay out of CA RE.

Of course, the emotional - sense of security and ownership - aspects are important. Especially as you get older, with a family. To me, these could justify buying even at a price when the strictly financial "rent vs buy" comparison was still "somewhat" favoring rent.

But only "somewhat". After all, struggling with the mortgage payment as your house tumbles into negative equity has some emotional impact too.