[quote=sdduuuude]Before considering rent a “waste” of money, one has to consider the value of flexibility. In uncertain times, the value of flexibility goes way up. Up to you to put a dollar amount on that.
Renting provides a low risk of being stuck in a bad position. Also, rent is only “wasted” if the underlying assets are appreciating. In the early years, the amount of money that goes to equity instead of interest is negligible.
If you are aiming “low” with your purchase, you might be OK – the magintidue of potential dollar losses goes down, and you are making a monthly payment similar to your rent. But if you are aiming to purchase a nicer place than you are currently renting, then your risk is increased.
I think waiting another year will help more than hurt. It’s an annoying buyers’ market and many economic indicators suggesting bad things are coming.
On the other hand, it seems nobody really cares if you default on the loan, so if you buy now and get stuck in a negative equity position, walking away is now the “in” thing to do so you don’t really have anytyhing to lose by buying. In case the market goes way down, you can always default, live rent free for a year, then bail. Consult your attorney first.[/quote]
Thank you for reminding me of this. You are right, it is so nice to have the freedom to pack up and move with a 30 day notice. I would not be stuck in a negative equity situation, since I would be putting 2/3 of the purchase price down and actually saving money over what I am paying in rent.
