Powayseller – Selling and renting may turn out to work for you, but I’ve got to question some of the statements you made:
“80% of San Diegans who purchased in the last 2 years will face foreclosure bec. they got ARMs” Just because someone got an ARM in the last two years doesn’t mean they’re facing foreclosure. A lot of wealthy or well-qualified borrowers used ARMS in the last several years. My current loan is a 10 year fixed, interest-only. I qualified for a 30 year fixed, but I prefer this loan. I can pay a larger amount every month if I want to, and my next months’ payment goes down.
“banks will fail as foreclosures rise” Foreclosures are definitely on the rise, but there have been basically no foreclosures in San Diego from 2002 to 2004, so banks which hold portfolio loans, (which are not that many), can handle a huge increase in foreclosures without failing.
“We’ll pay $800K for today’s $1.5 – $2.0 million house” Very few experts are predicting that prices will drop 50-60%. I’ve been an appraiser for nearly 20 years, and if I thought prices were going to drop 50%, I would sell and rent, too, but I don’t think it will happen. My guess, (just a guess), is that prices will drop 15-25% over the next four years, and then stay relatively flat for another four years.
