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While some people are running away from real estate in today's market, 20- and 30-somethings are diving in. What are they looking for? A bargain place, in a trendy neighborhood, with long-term investment value.

The housing downturn hasn't scared off young professionals, who are buying in urban areas, looking down the road at marriage and families, and planning for potential future payoffs. This generation is also showing more flexibility than previous ones, exploring partnerships with their peers and possibly renting out their places as needed.

Even Manhattan's skyrocketing real estate prices haven't slowed young professionals down. Jason Haber, a sales agent with Prudential Douglas Elliman, says these buyers are quick to act and demanding turnkey units.

"I find single people can see something and 10 minutes later are putting in an offer," Haber said.

Right Place, Right Time

Real estate is all about timing, and Jason Schwab, a 26-year-old freelance film editor from Los Angeles, believes he struck while the iron was hot when he purchased in July 2006. Schwab said sellers were highly motivated and willing to negotiate, getting him a lower price.

Schwab negotiated his unit down to the mid $500,000 range from a $600,000 listing price, and even got the sellers to throw in the refrigerator at no cost, a rarity in Southern California. While negotiations started off slow, they heated up quickly in the second round and Schwab sealed the deal within a week.

Investing in Growing Neighborhoods

During his house hunt, Schwab kept the long-term investment potential of his purchase in mind, targeting his search in up-and-coming areas, like Studio City.

"This neighborhood in particular is only going up in value," Schwab said. "They got rid of the gangs and now it's young Hollywood people."

If history is any guide, up-and-coming neighborhoods in metro areas should have good long-term value. Steven Fulop, a 30-year-old Wall Street trader, strayed from his friends in 2001 and didn't look for a Manhattan rental, rather venturing across the Hudson River to the up-and-coming Jersey City, N.J., waterfront.

Fulop sold his condo four years later with a good return on his investment and bought a larger one across the street. His neighborhood has become one of the trendiest in the Tri-City area, as historic brownstones are renovated and new high rises spring up seemingly daily, pushing prices higher.

"My decision was based on affordability and investment potential," said Fulop.

Buying with Friends

Young professionals are also embracing tenancies-in-common, also known as co-ownership, a trend that's been growing nationwide in the last three years.

"I think that it's a function of the cost of housing," said Andy Sirkin, a San Francisco attorney who has worked in co-ownership law for 20 years. "It is becoming very expensive to own in urban areas."

The biggest issue has been the development of co-ownership agreements, Sirkin says, which spell out every issue related to the co-ownership and occupancy. Many co-owners who don't have agreements end up in court and lose money in the end, he said.

But young people seem to be willing to take risks. Whitney Cristall, a 24-year-old county legislative aide, bought a house with a longtime friend in Buffalo, NY, and chose not to have an agreement, opting instead to work out issues as they arise.

"We think it makes the most sense in our friendship," Cristall said. "I suppose there is a chance we could hate each other down the road."

Bucking the Trend

Still, there are those who are choosing to ride out the turbulent real estate market, like Garrett Baird, a 30-year-old software sales consultant who gave up home ownership for the simplicity of a renter's life.

Baird had gotten an adjustable rate mortgage on his three-bedroom townhouse in Morristown, N.J., for $385,000 in 2004, not really knowing what he was getting into.

"I was completely ignorant about the subject," Baird said. "I was convinced by the enticement of the minimum payments. It's a way people get hoodwinked."

As his payments grew, Baird quickly looked for an exit strategy. He was transferred closer to Philadelphia, and Baird sold his townhouse for $465,000. He now rents a one-bedroom apartment in Philadelphia's Old City.