Fearing a Bubble, Homeowners By RAY A. SMITH
Cash Out and Return to Renting
Staff Reporter of THE WALL STREET JOURNAL
Convinced the housing market is a bubble about to pop, a number of homeowners are deciding to cash out -- and stay out. Instead of buying new homes, they are renting until prices fall back.
Even amid a recession and stock-market plunge, housing prices have shown little sign of easing, with some major markets still seeing double-digit increases this year. Economists say such cities as Boston, Chicago, San Diego and Portland, Ore., are overheated. As a result, some homeowners whose properties have soared in value in recent years are now deciding to get out, selling their homes as one might a stock when it hits a new high.
While no group formally tracks the number of people cashing out, brokers say they are beginning to see more of this, particularly in strong markets. Jacky Teplitzky of Corcoran Group in New York says so far this year four of her clients have sold their homes and pocketed the proceeds, versus none this time last year. The softening of the rental market is also helping to entice some of the skittish homeowners.