New York (CNN/Money) – Everyone, it seems, is gloating about how much money they've made in real estate.

Consider: the median price for an existing, single-family home was $161,600 in the fourth quarter of 2002, up 8.8 percent over the same period last year, according to National Association of Realtors.

What's more, 39 housing markets saw double-digit gains in housing values in the fourth quarter of last year -- a historic record, NAR reported.

Such dizzying stats are impressive. But they may also leave you wondering whether you've missed the boat. Is it too late to buy because prices are too rich and poised for a fall?

10 Hottest Housing Markets Thirty-nine markets had double-digit gains last quarter. Market  Increase  Median Price  Sacramento, Calif.  26.7%  $224,200  San Diego, Calif.  26.6%  $379,300  Providence, R.I.  24.6%  $206,100  Nassau-Suffolk, N.Y.   23.6%  $333,600  Monmouth-Ocean, N.J.  22.1%  $261,700  Melbourne-Titusville-Palm Bay, Fla.  20.9%  $115,600  Ft. Lauderdale-Hollywood-Pompano Bch, Fla.  20.8%  $204,800  Anaheim-Santa Ana, Calif.  20.4%  $434,600  New York-North N.J.-Long Island, N.Y.   20.2%  $320,300  Bradenton, Fla.  20.1%  $156,800  National Average  8.8%  $161,600   Based on year-over-year change  Source: National Association of Realtors

First, take heart. There's been talk about a housing bubble since 2001, and so far, it hasn't popped (though a few regions have shown some weakening trends).

That's not to say that there isn't any such thing as buying at the top.

Sure, if you look at national numbers, buying a home seems a sure-fire way to invest your cash. In fact, realtors are quick to point out that there's never been an annual decline in real-estate prices at the national level.

But forget national trends -- you have to think locally. In fact, there are plenty of real-estate horror stories in markets like Honolulu, New York City and Houston, where homeowners had to wait as much as a decade before they could just break even.

In a nutshell, knowing whether to buy now will depend on a variety of factors. Here's what to consider before you take the plunge:

Talk to the experts and they'll note that interest rates are the biggest influence on housing prices. These days, interest rates have hit or hovered at record-breaking lows.

In fact, those low rates are the most compelling reason to get off the fence and buy now.

"You might not have a chance to get financing at such a cheap price in the future," explained David Stiff, a senior economist at Case Shiller Weiss.

Conversely, experts warn that any "significant" rate hikes in the future could have an adverse affect on home prices.

So, what's significant?

It's here that prognostications get fuzzy. In fact, there are times when rates have suddenly spiked without dampening the housing market.

Go back to 1993 when mortgage rates hovered around 7 to 7.5 percent. By the end of the year, and the start of 1994, rates shot up over 10 percent. Housing took a hit, right?

Think again. The number of existing home sales stayed steady at roughly 3.8 million in both years while the average price rose 4 percent in 1994, better than the 3.4 percent rise the previous year.

What to make of this? Ingo Winzer, president of Local Market Monitor who analyzes residential real estate markets nationwide said: "What it tells us is that interest rates have less effect on home prices and sales than people tend to think."

In fact, Winzer contends it's more important for buyers to pay attention to the local job market. When there are massive layoffs, spending power not only softens but communities may also lose potential buyers as individuals move elsewhere to work.

Take Southern California. In the early 1990s, the region was hit hard by military cutbacks and roughly 1 million individuals left the area. Home prices eventually suffered. In Los Angeles, for example, home prices lost 21 percent of their value between 1989 and 1996.

"The [housing] markets that are weak are those that have suffered most from the recession and the very slow recovery. Those are markets that lost a lot of telecom, airline, manufacturing jobs," says Frank Nothaft, chief economist at Freddie Mac.

Since people will try to hang on, prices start to fall about 18 months to 2 years after widespread layoffs, according to Winzer.

You may find weaknesses in markets like San Jose -- at the center of Silicon Valley -- where home prices soared 12 percent in 2001. But last year, the city lost 3 percent of its jobs, and by the final quarter of 2002, prices had risen just 4.2 percent from the year before. Similar patterns are playing out in Denver, Atlanta, Seattle and San Francisco, Winzer added.

Even when buyers are gainfully employed, they have to be able to afford housing to make the market buzz. After all, when home prices are out of reach for most buyers, something has to give: either buyers need fatter incomes or prices have to fall.

Celia Chen, a senior economist at Economy.com, keeps track of individuals' buying power respective to the market with so-called affordability indexes. They measure what someone who makes a median income can afford relative to the median list price of homes in their area.

These days, Chen notes, the national affordability index is 112, meaning that individuals earning the median income in their area could afford to buy a home that was 12 percent higher than the median price of homes in their market. Any number below 100 indicates that prices are outpacing income.

"Overall, affordability is quite high right now because of the low interest rates. That's bringing down the cost of owning and financing a house," said Chen.

Still, she cautions that there are local markets where housing prices are getting out of reach for many. For example, the affordability indexes of Santa Barbara, New York, Boston and Los Angeles hover in the mid-50's to mid-60's.

That means that residents who earn median salaries in those communities can only afford to pay just half to two-thirds of typical home prices in their area.

Be cautious about buying in such markets, but also consider your own situation, especially how long you decide to stay put.

"It's probably as good a time to buy since mortgage rates are very, very low," said Chen. "But if you don't think you'll stay in house a long time, I'd be concerned about buying in a market with a low affordability index."

In recent years it hasn't been uncommon for a home to sell just hours after its "For Sale" sign has been posted. When housing markets cool, the stampede of buyers thins and slows. If you're looking for another variable that could point to a potential bubble, keep an eye out on how long it's taking for homes to sell.

Most realtors will provide you with relevant sale data about a house, including the amount time a property has been on the market, said Walt Molony, at National Association of Realtors.

"If it's overpriced, it will be on longer," Molony said.

Inventory also affects how long it takes for homes to sell – and for what price. When supply is tight, after all, homes tend to be snatched up. In fact, NAR reports that it's currently taking about 4 weeks for dwellings to sell. Conversely, high vacancy rates -- say 2 percent of more -- mean there are fewer buyers to drive prices.

These days, communities with high home vacancy rates of about 3 percent include Dayton, OH; Denver, Ft. Lauderdale and Phoenix, according to the Census Bureau. In those communities, buyers may have the power to negotiate better deals in their favor – or wait a while until sellers start cutting prices.