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?
Maybe they think the market will cool off in a year, and they will save thousands if they can find a destressed seller.
Texas has had rather slow appreciation over the last few years. Even if prices do go down its unlikely they would fall as much as some markets in California that have seen higher appreciation over the last few years. So basically I understand Donnas confusion with Texas buyers sitting on the fence. But I understand why people might be will to do that in some locations in California