This topic has been in my mind for a while now. I think I want to start a series and write down thoughts from different angles on how to deal with this issue. First thought that came to mind.
DON'T DO ANYTHING DRASTIC.
That's it. Just slow down and think again. That's why we stopped our home buying plan until later this year. Don't sell all your stocks, don't move all your money to Aisa, don't buy a lot of gold, etc. I'm not an investment expert, but experts will tell you that currently there is no safe heaven for investment. So just keep your portfolio balance.
Some friends are saying, "This is the perfect time to buy a house, prices are low, interest is low, and....." Well, the key here is how much risk do I want to take and is the risk worth it. Sure, I don't think the housing market is going to crash 50% downward, but I did a study last night, pulling about 30 properties that I would consider. I check their asking price against the 2007 tax assessed value. The result is that all but 2 are marketed over their 2007 assessed value. To me, that's over priced because we all know that their 2008 value is suppose to go down. So why am I paying a premium? Now, on the other hand, if you have a reason to buy, like you need another bed room, your lease contract ends, then go ahead, this is perhaps the bottom. Just be sure to offer at most the 2007 assessed value and you should be fine. For me, I will wait till after Q2.