This picture and story from Sophie, on Garth Turner’s greaterfool.ca 30 Aug 2010 – “As a pharmacist who moved from East coast to West coast, [greaterfool.ca] is a therapy to all the in-laws, co-workers, etc who are constantly asking why I am not in the market yet! We were in Vancouver previously, but we see no future with our 150k total salary income to buy something normal, considering we are now [in our] 30′s and we don’t picture ourselves in a million dollar slum in East Van. As a part of my therapy, I participated to the zombie walk in Vancouver in mid-August. My partner and I were zombie realestate agents (that’s me in the picture). I could swear to you that each time I said to a stranger ”Buy now!” they all laughed at me (about 50 persons surveyed) 
. And they were not zombies.”
Unless you expect to buy in the Vancouver proper and not a mil slum in East Van, $150K income can support the owning of a decent place in the burbs with a commute to downtown Vancouver in less than 45-50 minutes each way. You can get a decent house in Burnaby North (Hasting – Boundary – Water – Willingdon) for less than 1 mil, and this would be 20 minutes commute to downtown Vancouver by bus.
Sure, she CAN buy, somewhere, but why would she want to?
You’re making the “lower your expectations” argument, also known as the “cure for higher prices is moving to a destination with lower prices” argument.
But ALL Greater Vancouver real estate, at every point down the ladder, is overvalued by a factor of 2, perhaps more. And once you’ve sunk your downpayment into that outlying market, there is a high chance you’ll be underwater and stuck when the market tanks. You’ll find it more challenging to move up into the then more reasonably priced and more desirable properties.
This is true – I read an article about tokyo – there are still thousands of people that live 2 hours outside Tokyo and commute everyday that are still paying mortgages on properties bought in the late 80′s when real estate was insane there. Younger couples coming into the market now are having a much easier time buying closer to town, but those that bought at peak have been stuck in the burbs for 20 years because 20 years later, they still can’t afford to sell!
Here is the article you are refering to. It was written in the New York times december 25 2005. This is exactly what will be in store for many who make that buy out in the burbs argument.
http://www.nytimes.com/2005/12/25/business/yourmoney/25japan.html