Bubble Sitters and Bitter Renters rejoice. When the world was going mad, and listening to realtors on commission and their lies, you ran the numbers, you did your research, you found places like HP, and you did the right thing.
And you avoided the biggest financial mistake of your lives as home prices plummet and the costs of home 'ownership' are now not just your mortgage payment and fees, but the devastating leveraged monthly price declines in the thousands or tens of thousands.
There will come a time when "owning" will be the right thing to do again. It could be a year from now, it could be ten years from now, we just don't know.
How will you know? Because it'll be cheaper to own than rent. Because the historical price-to-income and price-to-rental-yield ratios will return. Because you could buy a place and rent it out for positive cash flow. Because people will be disgusted with real estate. And because lying realtors on commission will be back to flipping burgers or turning tricks.
Those who rent instead of own look smarter these days - no worries about falling prices, maintenance costs
There was a time when it was simpler. That is, when it cost less to own than to rent. Ten years ago, according to Moody's Economy.com, the average annual cost of owning a home - including mortgages, taxes and maintenance costs - was $10,231 nationally, compared with $13,090 for renting.
Then things changed. Owning became more expensive than renting in the first quarter of 2004, and that trend has persisted. In the second quarter of this year, nationwide, the average annual cost of owning a home was $17,707, compared with $15,721 for renting.
"In the last four years, rent became a four-letter word. No one wanted to rent. They looked down upon it . . ." said Larson. "I think a lot of people just assumed buying makes sense. They drank the Kool-Aid and unfortunately are finding themselves now in a tough spot."
"I just saw a lot of people around me buying things that were risky," said Raneri, who recently signed another one-year lease for a rental in Baltimore. "I just don't think it's a wise idea to be buying something when you can get it for $100,000 or $200,000 less two years later."