Why do you want to catch a falling knife? If house prices are on a decline (which they are sure to continue for some time yet in California) - and you would need a jumbo loan anyways - this is a losing proposition. I would rent (which I am doing in my overpriced market) and save my money. Better to buy in closer to the bottom (and you'll have much more money saved too). This is going to be a long, painful process for people who bought in at prices more than any sane person would be comfortable with (which is most of the people who have bought in recent years in your area). I believe you will be far better off if you wait for the fire sale prices and save your cash. Being house poor sucks anyways.
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