Article in USATODAY makes walk away the right choice

[cdmosaic]

check this out - long road ahead. everyday a reinforcement of the decision to walk away.

Why home values may take decades to recover - USATODAY.com

[The Professor]

Like so many other news reports I've read recently, this article provides a clue as to what the real estate market will look like over the next decade. As I've stated before, my belief that is based upon history of downturns I've witnessed, suggests that we will see a leveling (aka bottom) sometime around 2011, but that doesn't mean that is the time to buy. Bottoms are historically flat. This bottom, like the others will continue for something like four to five years.

What will change during this bottom will be the interest rates. They will go up from their historic current lows. They are utilized as a tool to combat inflation trends and because of the bailout spending frenzy that currently exists, an offshoot of the increased creation of the money supply will be inflation.

To suggest that now is anything other than "a great time to rent" is a falsehood. I say that recognizing that I don't rent. Fortunately, not having a mortgage and lacking both the desire and need to move has me feeling OK about my situation. But the wise business decision would have me selling and renting.

Take care,

Daniel

[DAVetran]

Professor Shays,

so true is your advice, I tell my family to get their ducks in a row NOW, I think the low rates will only last through 09, and then inflation will kick in, and we will see rates as we did in the early 80s, but I hope that is all we see.

With this country being what will soon approach 12 trillion in debt, it is very hard to see what will realy happen, but we will not see todays rates for a very long time once this reverse occurs.

On a positive note I do see people starting to realy think about their finances, so I think we will see the savings rate increase in the future as reality has kicked in.

[cactus77727]

Good article. Thanks for posting it.

[cdmosaic]

You're welcome

I personally find the similariteis to the Great Depression distressing to say the least. Everytime I catch myself thinking perhaps things aren't as bad as we fear, I read an article like that and remind myself to take care. I work in the finance department of a large non-profit in San Francisco, and we have spent a lot of time on our 2009 Plan attempting to factor in the "recession" impact into our financials. I keep thinking to myself - maybe we should be looking at the "depression" impact. Then what? We expect to be OK in a continued recession, but depression....all bets are off.

Scary times, but I'm certain letting the house go is the right choice. I do not look forward to having to tell my 17 year old son as he has a tough, tough year (medical issues), but that is my chore for the new year....and packing!