Those who elect to let their house go to foreclosure will find renting cheaper even than renting last year. A Business Week study named Sunnyvale-San Jose and Oakland-Fremont to the top ten cities where rents fell the most.
I usually lead clients with homes in foreclosure through an analysis of “should they keep the house.” Part of that is comparing the cost of renting comparable housing to the cost of paying the mortgage, insurance and property taxes on a home. The bigger the spread between the cost of home ownership and renting, the stronger the case for letting the house go.
When the rental market is strong, former homeowners worry about the impact of a foreclosure or bankruptcy in their financial history on their ability to rent an apartment.
With Bay Area rental demand falling, and prices falling as well, those who choose to surrender the impossibly over encumbered house will find renting cheaper.