There is no harm in renting. Just keep expectations realistic. If you are going to rent in order to find conditions that will have a higher level of inventory then that makes sense. If you feel that there will be some substantial price decline then be prepared to wait for a few years at least. While the market will cool down later in the summer as it reaches an equilibrium that will simply slow the rate of appreciation as opposed to cause depreciation. The homes that will depreciate will do so only because they were originally listed at a ridiculous original price. If your plan is to sell, then hold the cash until we hit a point where interest rates rise significantly than that may be a good plan but it also may be quite open ended.
I have heard about the number of underwater homeowner theory, that is there is this vast number of underwater homeowners who will flood the market when they can sell and that this will be the “tsunami” of inventory. I feel this is quite incorrect for many reasons.
My point is that the market will not reverse direction strongly anytime soon for any reason except interest rates. It may not be as hot but it certainly will not reverse, at least not in a meaningful manner.
