Also think about it this way, even if inflation is 2%, paying $75k to own the property free and clear in 30 years is equivalent to paying $42k on a Net Present Value basis.

I really feel that the area all these homes are in is WAY over sold and trouble is on the rise.

Same with pools, equestrian facilities, and of course, proximity to great schools, shopping, restaurants, etc.After the physical items comes the paperwork stuff like watching out for very long DOMs ( days on market) and sudden rise in supply or drop in demand.

Here's my question: Do I purchase it in anticipation of the rising market and value appreciation?

There are some specific pockets on the rise in Germantown and neighboring neighborhoods.

I'd probably pay about $3-5K, but I tend to work in lower priced areas than Will, so his estimate could be indexed for CA inflation.

I just see so many people use their insurance to cover the littlest things, and it ends up costing them more in rising premiums in the long run. 

Then, show how accepting your offer solves all the seller's problems.If she's still unwilling to let go of her inflated expectations, then let the market teach her.

Or, if temp is rising too high, T&P will activate. 

Do they always do this, no, but COULD they if interest rates start to rise a lot, Yes.