How do you benefit or become richer from renting instead of owning unless rents are also coming down or unless you get the home you want at a price you can afford? Unfortunately if you wait too long to buy you not only won’t get the home you want but may get none at all.
The only ones directly losing money when home prices go down are those who are over extended and either have to sell or can no longer live off the equity in their depreciating home. The drop in the price of a neighbors foreclosed home doesn’t directly affect me unless I have to sell or I need the cash I can take from my equity.
As a long time stock trader I am used to watching markets. I know as markets near bottoms less and less trade occurs at the lowest prices. As the benefits(raising cash)of selling diminish only those who have to sell will sell. So as we near a housing bottom fewer and fewer homes will be available for the biggest reductions. That’s great if it’s the one you want and you get it.
If you are a renter waiting to buy and you miss out on the one you wanted or get no home at all what benefit did you get from the “sell off”?
I feel I have been able to get a great price on a 2nd home recently. It was the one I wanted in the neighborhood I wanted.
I was surprised to able to rent it for more than I could get by putting my money in other fixed income instruments. I was expecting only $3400/mo but got $3800/mo.. I’m sure others will be able to do the same as more and more people are being forced into the rental market.
Remember down turns don’t last forever and that you don’t need to get the bottom tick to get a great deal.
An old market adage says, only thing worse than buying (or selling) too early is trying to buy (or sell)too late.
