I think a lot of the reason people decide to rent, or threaten to their agent that they will rent, is pure emotions.

It’s not rational in my opinion. The odds of the strategy succeeding are very low given the direction of the market.

Their reaction is emotion presented as a reasonable financial strategy.

Their reaction is really, “If I can’t be quarterback, I’m going to take my football and go home,” “If you don’t do what I say, I’m going to hold my breath and you’ll be sorry when I’m dead.”

The world doesn’t care about their problems.

The rational adult will be disappointed in the price but he will figure out that in a declining market the sooner you sell the better.

I think there is also an element of sub-surface anger towards Realtors in the strategy. The seller is in pain. He would be happier if others were also feeling pain. They certainly don’t want their Realtor making money when they feel so bad and are “losing” money (that is, netting a smaller fortune than they wanted).

Those people would rather hurt themselves than see their agent make money or “give away” their home to a someone.

The wild exaggeration of, “I don’t want to give it away” shows you the out of control, childish emotions involved.

Renting when you can’t get “your price” is a totally self-destruction, childish response.

It’s not a strategy. It’s a tantrum.

Tara – Having a client who just relocated here ( to San Diego) from the Tampa Bay area, I can better appreciate your comment. Interestingly, in SD, many potential buyers are now renting while they are trying to time the market, resulting in a fairly healthy rental market with relatively low vacancoes and rents on the increase. The recent fires have further increased the rental demand.

Sven – Good to hear from you, again. We both agree that supply/demand forces will eventually have their way, regardless of what anybody says. As rents increase and sale prices moderate more and more buyers will find their comfort zone to proceed with their purchase. Until then, the reduced demand will continue to pull on pricing, which, as you say, has been stubbornly resisting the market dynamics.

This is all expected. People just don’t want to lower the price of their houses, and the REO’s are going to have to be the driving force in the downward movement. If I were you, I’d work on specializing in foreclosure purchases and pick up a lot of buyers who have been waiting for a deal. People were sitting on the sidelines the last few years waiting for prices to go down, not volume.

I was sitting on a plane recently with this guy who specializes in real estate auctions, and he’s making a killing right now. He said the average sale price was 70% of the market. I can believe it looking at the listing price of the North County REO’s compared to the other listings.

It is one thing to say you are going to rent out your house and another to actually accomplish it! The renters are getting VERY picky about what they consider a good rental to be – price AND condition wise. Some of the repairs that they didn’t want to do to sell the home are still going to be required to rent it.

>For sellers considering renting your home as an alternative to sale, be sure to consider the costs associated. Not only will you be faced with the responsibilities of being a landlord, you will likely be in a negative cash-flow position with the bonus prize of having relegated your equity to the ”dead money” pile for the next several years. If you do give up on the sale of your home thinking “it must be worth more” and rent with the expectation that you will get more a year from now, I hope you’re right, but I wouldn’t bet on it.

Makes one wonder if there isn’t yet a different, more profitable alternative for these owners?