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Toronto's housing market has shown signs of cooling down.

Galit Rodan/The Globe and Mail

Housing-crash prophets are warning people to hold off buying houses. To see why this advice doesn't always apply, let's look at the case of Joe Wood, a 25-year-old business graduate who works as a purchasing specialist and blogs at TimelessFinance.com. He just bought his first house in January.

Mr. Wood, a new dad, works in Toronto where house prices have gone up a lot. But Hamilton: that's a different story. Prices are more reasonable there, and he found a four-bedroom brick house priced under two times his gross income. The carrying cost (including insurance, utilities and property taxes), is about a third of the rent for a similar house in Toronto.

The purchase was financed sensibly, with 20 per cent down and a 20-year amortization at 3 per cent. Furthermore, Mr. Wood intends to pay off the mortgage within five years by aggressively saving and prepaying principal. This will shave substantially more off interest costs.

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The house is also close to some amenities that should support, or enhance, local property values: a brand-new school and recently improved GO Train Service to Toronto. The time spent commuting to work will be put to good use researching on the Internet and posting to his blog (things he couldn't do during his previous daily hour-and-half commute on the subway in Toronto).

All in all, Mr. Wood's switch to home ownership looks astute. The advice to postpone buying a house doesn't always apply, especially for couples starting a family and in need of larger living quarters. Like Mr. Wood, they may be able to find areas where houses are still reasonably priced and local amenities support property values. And they may be able to finance prudently, taking advantaging of rock-bottom mortgage rates to save a substantial amount in interest costs.

Others have taken different routes than Mr. Wood. For example, thirty-somethings Nick and Julie Watson of Ottawa purchased a house and rented out part of it to help pay the mortgage. They also bought at a bargain price "because the interior looked like it was from a Dr. Seuss book." Some renovations will help improve the appearance and value of the house.

READERS: Do you have a strategy for entering – or exiting – the real estate market?

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