The Skinny On Real Estate appreciates the shout out from the Wall Street Journal. (We liked them even before the citation. Seriously.)
This blog is listed as a similar topic on an excellent article about the Consumer Price Index, Inflation and the Fed. If that doesn’t sound too exciting, or you think it has nothing to do with you, you should at least pay some attention to these topics because when the Fed Chairman gets it in his head that inflation is rearing its ugly head he’ll raise interest rates and THAT affects you the consumer right in your wallet.
One important issue that the article raises is whether or not homes that couldn’t sell, and end up being rented out, are affecting the economy. As you’ll note The Skinny blogged on this topic just recently. Some home owners find it prudent, especially in a softer market, to rent their current home out instead of selling it, and wait for the market to improve and home prices to rise. Meanwhile, they take advantage of the softer prices themselves and move up to a bigger home.
They earn a little investment income on the first property, write off the mortgage interest, and enjoy their new home all at the same time!
Note there is also a case to be made for folks who are in danger of losing their home because they can’t afford the mortgage. If you can’t get it sold for a particular price you may want to consider renting it out to someone who can afford it, and go rent a less expensive property yourself until you can get yourself into better financial shape, or the market value on your home increases and you can sell it.
