<prompt> Human: rpersonalfinance. Read all the wiki I think. Im just looking for opinions. Im looking at buying my first house. My wife and I are currently in a small 2-bedroom apartment; its nice but were thinking about having kids and think it would be hard to do especially for our neighbors. Were in no particular rush but its just something we have been considering.Were doing well financially IMO. Weve been in the green every single month except the month we go married and went on our honeymoon. Most of the below are estimates since there is some irregularity in things bonuses, equity vesting, etc.. Monthly income: 14,000 Monthly expenses non-rent: 4K- 8K Rent: 3,000Income is post-tax, post-401k.So, we could do better about saving more, of course. But we do pretty well most months I think. Anyway, were looking into homes in the Bay Area. Most 2-3 bedrooms range seem to start about 750K to 800K and go up from there quickly. We have 220,000 in cash and another 100,000 in short-term securities or switch to cash for an emergency fund. We have an additional 300K in retirement accounts. Looking some listings, wed be looking at mortgage property taxes in the range of 5,000 month.So what say the crowd: reasonable to purchase or not?  <response>: Bay Area homes are expensive because: 1. Youre competing against a lot of well-paid professionals and the supply of homes for sale is low. 2. Theres an influx of foreign cash buyers to compete against. 3. Interest rates are very low, which increases the available leverage smaller monthly payments can control higher principal.4. The economy is doing well, unemployment is very low in the Bay Area.Basically, the stars are lined up to keep prices high. If you buy, there is risk that these factors may change. Layoffs, foreign buyers leaving the market, and rising interest rates could cause a downturn in the local real estate market.I would ask myself: am I ready to commit to the home for an extended period to ride out a downturn, say 5 to 7 years? If the value fell by 20 or 25, is that a loss I can bear, or would I be underwater and risk foreclosure and losing my downpayment? Im not trying to scare you; rather, Im suggesting a sober and rational look at the risks at hand. A what if analysis, if you will. 