Advice about buying a home in Southern California (Thousand Oaks: foreclosed, rental)

[DoggieLover]

Hi, this is my inaugural post on this forum! I look forward to any advice people might have about my situation.

My family (me, wife, baby and big dog) will be relocating from the Northeast to the Thousand Oaks area in California. We currently own a home (which we will be selling) and have excellent credit. My company has a nice relocation package that also includes a company-sponsored secondary mortgage plan. We will be making ~300K per year and are looking for a home in the 700K range in a neighborhood with a great school district. We will have enough to put down 20% on the mortgage, and we like being homeowners.

First, given how labile the housing prices have been (I've heard down ~20-30% in the area), would it be more prudent to rent for awhile until the market settles (god knows when that will be)? Might good neighborhoods and nice homes be more protected from depreciation given the already reduced prices at this point? Are the nice areas around Thousand Oaks stabilized by now? On the web, I see a lot of inventory and foreclosed properties, I assume related to the massive layoffs from Amgen and Countrywide.

There are a few caveats to these questions. With the baby, I am not eager to move frequently. I am less optimistic about finding a nice rental with a huge dog. Also, should I use the company sponsored mortgage (I heard has a fantastic rate). While the company mortgage incentive sounds great on paper, it could be problematic if I need to move and my home price has depreciated significantly (let's say if the job doesn't work out or God forbid if I get laid off--can never be sure in this economy ya know).

Sorry about the long rambling post, but I hope you guys can help me. Thanks!