First Time Buyer in Peak Market Conditions

[Ross Johnson]

Hi all, 

I'm new to BiggerPockets, although I've been listening to the podcasts for a while trying to learn as much as possible.  I live in Portland, OR, which as many know is an extremely hot and expensive real estate market.  From preliminary meetings with a few realtors, properties are scooped up quickly, often at prices greater than the original asking price.  This is due to Portland being (among other things) a very desirable city to live, new tech jobs, etc.

My preferred first purchase is a live-in duplex: my wife and I don't have kids yet and are willing to share space with tenants in order to reduce/eliminate mortgage payments.  This will allow us to save and purchase our next house in a few years' time and keep the duplex as a long-term investment.

I have been scouring the usual websites for listings, and am becoming increasing concerned that purchasing a property in the area we want to live will become a liability.  We would certainly be "approved" for loans on some of the asking prices but I don't want to be strapped financially.

My question is a fundamental one: Is it a sound financial decision to purchase a live-in multi-family property in seemingly peak market conditions?  Even more to the point, is it smart to purchase any property in peak conditions?  For the more experienced investors here, what would be your strategy as a first time buyer?  Should I simply continue renting until the market stabilizes? 

Thanks very much for the input, I'm very much looking forward to diving in here at BP!