If you live in an area where real estate appreciation has been extraordinary, home ownership might not be the automatic first choice. Instead, you may be better off renting. Generally, rents have not accelerated as rapidly as home prices.
If you’re undecided, think about your future plans. If you might be moving out of the area in the next couple of years, you might lean towards renting. If you already own a home, consider selling it and renting a place to live.
A useful parallel might be found in a story variously attributed to John D. Rockefeller, Bernard Baruch, and Joseph Kennedy. In 1928, this wealthy investor got a stock tip along with a shoeshine. He figured that if shoeshine boys were getting into the market, it was time to get out, and he did–before the Crash of 1929. There might not be a crash in housing now but this might not be the best time to be buying real estate, at or near a market top.