Rich’s graphs and the data he derives them from tell a pretty convincing story. Make sure you point out that it’s not when the owners bought, but to what degree they are currently mortgaged that counts. There are lots of homes purchased prior to 2000 that are maxed out with 2004-2005 refinances at ARM terms. Take him down the ARM-reset discussion and see if he really thinks the potential for loss is only limited to 10% – 15%. We’re already at 10% losses in a couple neighborhoods in this region and this trend is only picking up speed. Foreclosures are increasing rapidly.

You should fully agree with and support his opinion that rents are a “waste of money” in a stable or increasing market, but that’s not where we are right now. We are in decline.