More signs of a bottom...

Ericho, no one is including principal repayment in their comparison of buying to renting. Interest, maintenance and taxes alone put cost of owning well over renting. Don't worry, at 60c on the dollar in Long Island City, your worse case is only about 50% down from here.

Good point about the 20% down (at least) to get a mortgage today - that will help prevent people from walking away.

I think timing the market within reason to make your first purchase makes the most sense. Renting for 30 years (even in a rent stabilized place seems foolish unless you can't afford/qualify to buy).

Like many I moved to my first rental right after college - I've been renting for years now and finally had enough to buy (I'd only consider prime manhattan) about 2 years ago. I've decided to stay a renter for another year or two. Work is going well and I'm saving more money than ever - fortunately for me I use to trade equity and feel that the equity markets are a total racket so I don't own a share of stock. Because I'm making so much more now than before I've decided that if I wait I can buy a much better apartment. I plan to live in it for 20 years or so - accordingly if I wait a bit - for 20 years I'll have a better standard of living.
Of course I'm happy to see prices fall (both rental and for sale). I do fear though that when it's time to buy, if many of my neighbors are underwater they will walk and I'll be stuck paying their maintenance. So for me coops will have a big appeal.

"Don't forget, in 7 years time you will be hitting your principal a lot sooner then the person still renting and looking to buy."

Of course, that person will be able to buy for MUCH less, giving a HUGE advantage to them.

Amusing that you are trying to somehow spin a leverage 20% loss as a good move. Sorry, you have to ignore nmath to make that one work.

In fairness to Ericho... Even though I think he is drawing connections with every piece of positive data he comes across and his deep value purchase in LICC, there is some margin of safety in a -40% purchase vs peak.

Ericho, out of curiosity, on a PRETAX basis is your payment much lower than rent...how about if you include a risk charge of like 8% on your downpayment?

"A bargain about to become a bigger bargain is no bargain at all"

But, I'll give you the 40%... I think I said 40-50% down in comp would get me interested on something I love.