Granted, there ARE many places where that's likely to be true. But others are still fairly low and increasing at a decent rate. We want to get in those before it's too late.

My point is that each property should be evaluated in the context of where it is. Just because a house is in Arizona and costs less per square foot than a house in California, doesn't mean that's what an investor should buy. (It may well be a good investment — but not just because it costs less than California!) Learn about regions — that's crucial. A $100,000 house that looks cheap to us Californians could be astronomical to the natives of an area. On the other hand, that house may be worth a lot more in the coming years and new businesses may be moving into the area that will subsidize the higher prices for new residents. Review the facts and base decisions on solid research.

I can't even count how many people we've talked to whose mode of decision making when it comes to investment properties is to, figuratively speaking, throw a dart and see where it lands on a map of the USA. Or worse, wherever a guru tells them. The speaker may be right or wrong, depending on what you want to do. (A place may be ripe for foreclosure opportunities but be lousy for holding rentals, for example.) That also goes for well-meaning relatives, friends, or co-workers.

Have you ever had anyone tell you “Invest in ____, it's cheap there!" without having any other reason to buy there? Cheap is relative. Even if I can still buy a 3/2 for $140,000 in a good neighborhood, if the maximum rent I can reasonably get is $900, that's too expensive of a property for me. Add in other costs like insurance, taxes, and expected repairs to get a realistic expectation of how "cheap" said property will be. Once the facts are known, it may be a "go" if the investor doesn't mind floating the negative, but it should not be assumed to be a cashflow property just because it is not in California.