Is this happening in your market? I was just reading an article on CNN's site about how people in some markets have sold their home to take advantage of the high prices, and are RENTING until the market cools off. Talk about throwing money away!
Say their rent is about $1200 a month, that's $14,400 for the year, plus there is no tax benefit of interest rate or taxes to write off. Without the write offs, they're throwing away, on average (in my market) of about $300 a month. Add that to the renting, they are throwing nearly $18k away just to hope that the prices come down a few thousand dollars? This makes no sense. This boggles my mind even more because if someone is used to living in a nice home, how could they fathom living in a 2 bedroom apartment? I would also assume rent would be well over $1200 a month which makes the numbers above much higher!
Maybe it makes sense in areas where the average prices are well over half a million and they're anticipating the prices coming down by tens of thousands of dollars, but I don't see it happening. I guess I'm still warped by the prices of Dallas being under $200k and never seeing a bubble, except when I chew gum!
Can anyone give a good example of someone they know that this has worked for?