The Sh*t L*st

While home prices are dangerously high in hot markets, rents are generally a screaming bargain. The disconnect between prices and rents carries two strong messages, especially for folks planning to retire in a few years. First, prices can?t keep soaring while rents stay flat. The rent?what you?d pay to live in the house?is the fundamental factor driving its value, just as earnings growth guides stock prices. Booming prices and depressed rents are an unstable, unsustainable combination, a flashing red alert that we?re in a bubble. Second, you can grab a peak or near-peak price on your house, then rent a similar one for as little as half the cost of owning it (even after factoring in the tax benefits of ownership).