Everybody is extremely apprehensive with the current real estate market, especially in Southern California. The huge number of Bank Owned Properties, called REO's and short sales that have flooded the market has driven median prices of many properties down to 2002 levels. Depressing? I don't think so!
Even while prices have dropped by as much as 50% from their peak 2 years ago, rents, especially in Orange County, have continued to rise, slowly, but still rising.
With a 20 % down payment, there are opportunities in the REO marketplace where with a 20% down payment you can have a "pre-tax" positive cash flow. The after tax savings is "huge".
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