Over the past year or so, more and more financial analysts have been talking about a housing bubble. I can certainly see where they are coming from given the rapidly declining purchasing power in the last 5-10 years vs. minimal increases in pay. A good example of this is how many people are doing interest only loans (especially on the West Coast), as well as the current foreclosure rate in Denver.
Given that I’m young, single, and living in a place that I don’t intend to stay in for years and years it seems more and more like a good time to sell. Although I enjoy owning my own place, after looking at the cheap rent rates lately, it seems like a good idea to get out until the current housing craziness settles down a bit. I’ve noticed that rent in most places I’d consider living in have dropped at least 1/3 since I bought a place in 2002. In general it would be fiscally better for the short term. It’s hard to say if I will do this or not, but I think I have more to lose than to gain…
For instance, if I’m right and I sell before too long, I’ll be able to pick-up a much better place in a few years. If I stay in and some sort of “correction” does happen, I’ll be stuck here for quite awhile…
Sounds like a pretty good idea. If I had the oppurtunity to pull out of a raging housing market I would leap at it. For more, balanced info on the housing bubble you might want to check out this article by Steve Sjugerrud. It was pretty helpful when I was studying up on this topic.
http://www.investmentu.com/IUEL/2005/20050701.html