Question:
I live in the heated real estate market of Los Angeles and I’m looking at homes around 650K. I’m 25, I make 70K per year, I have a girlfriend who can kick in 1000 a month for rent, and I have 200K to put into a down payment. I feel that the market is cooling but rates are low and I don't want to miss out on an opportunity to be a home owner at this age. I would be willing to keep it for at least 5 years before moving.

Answer:
I think that if given the choice between rent and buy in this market, I would buy if not worried about the "bubble" bursting and rent if I was. The real estate values are inflated right now which is why it's called the "housing bubble." If you buy a 650k house today, when the "bubble" bursts and the value declines largely, you will be paying a 650k mortgage on a 400k house. The rates being low is an advantage to home owning right now, but the interest payments are always "write-off-able" for your taxes. If you are not worried about the bubble bursting within your 5 year stay at the house, then I would buy. You would be able to build equity and not have to worry about rent increases.