I sold my house in anticipation of downturn and would not say that my life is on hold. I don’t like renting but I am living a pretty nice life in a house I could never come close to buying (it is worth double what I could just barely afford). If I bought, my standard of living would decrease because I would have a much smaller house with fewer perks.
If we purchased a house, my monthly expenditures would increase significantly. Plus, I would have to invest most of my money in the house in order to buy it. That money is currently earning a return. If I add together the return I’m getting on my cash (expecting only a modest 5%) plus the difference between what I would pay in my mortgage and what I’m paying in rent, I come up with a number that equals fully one half of our family’s yearly income! The property would HAVE to appreciate at least 5% a year for me to break even.
Further, the added burden of a monstrous mortgage would force me to put my life on hold because I would not be able to afford to do anything but hang out in my cramped living room.
On a separate note, a friend was just offered a great job in Orange County. The couple really wanted to take the job as they would love to live in proximity to the ocean and really like SoCal. However, even though the money was better than other job offers they received, they reluctantly turned the job down in favor of a less expensive location. Not only are people moving away, they are also deciding not come here at all.
