Firstly I think that you should research the real returns on vacation rentals -- in nearly every part of the world such properties are among the riskiest real estate. The recent uptick in such things makes it too easy for folks to forget who took a bath on such things following events ranging from gas price spikes to terror incidents. The few exceptions to such things are generally in areas that appeal primarily to the ultra-affluent and unfortunately many of them are more likely to prefer full service hotels over privately owned rental units. The ups & downs of AirBnB and VRBO type services further mask the long term issues that make vacation properties among some of the most illiquid real estate -- even when there is an oversupply folks are loathe to either slash prices to the point where they lose money or even to sell for "emotional reasons" and thus traditional data is badly skewed with illogical motives...
When it comes to your question about "delaying purchase of primary home for 2-4 years" I would simply ask "what will be your outlay for RENT during that period and who does that compare to the financial situation of even 'overpaying' if you can take advantage of low interest rates"? You can work up a spreadsheet or use online calculators to see what will happen to your situation if interest rates rise and /or you continue to rent. Be sure to use the most information you can to get the most accurate picture of everything include taxes paid and credited as well as realistic numbers of future rent increases and such.
Having a "feeling that a market correction is due" is very different than having any evidence that would support such a thing -- are there forces that suggest either the local or broader real estate market is at risky of devaluation? If you are capable of projecting the NATIONAL economy out 2-4 years you ought to sell your services to major financial organizations
they certainly are not so good at things.
An astonishing record - of complete failure - FT.com Local factors and conditions of individual homes are bigger factor --
What Makes Property Values Go Down?
You really cannot look at "neighborhood value". Evaluate each property against the comparable homes that have sold and those that are still available. Every price point in every city has some homes that are underpriced because of poor condition that it is being sold in and there are other homes where the sellers are asking too large a premium based on recent sales. You can use some judgement to determine what the likely positive trend is by doing things like driving around and determining how many other homes are being renovated. Determining negative trend also can be done that way but you can also use data about foreclosures, crime and even micro-level employment trends -- more and more than means not just the once mighty multinational firms having big layoffs / plant closures but things like how many of the local fast food places are willing to pay premium wages...
Technically if you do first purchase a "second home" and have a good understanding of your overall income and debt position there is minimal impact on what happens if / when you try to buy a "primary home" -- the "maximum affordability" would of course be impacted by what you've spend on the vacation / rental (and you likely would need multiple years of tax returns showing a positive if you claim that it is not a drain on your finances).
Depending on how serious you are about wanting to have your vacation / retirement home "paid off" you should consult with a qualified retirement planning professional to determine if that would result in having too much of your income devoted to illiquid assets/
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