Consider renting

NEW YORK (Fortune) -- Stephen Levy knows how lucky he was to sell when he did. He put his San Diego penthouse on the market in August 2005 for $2.65 million, more than double what he had paid for it in 1998. That October he got an offer for $2.25 million but turned it down. It would be months before he got his next offer. Luckily for him, he was finally able to sell, closing for $2.1 million.

"It was a gift," he says. "Is the property still worth $2.1 million? I'm not so sure about that." Like any precious gift, Levy, who is 58, is holding it dear. So dear that he decided not to roll it into another house right now. He deposited the proceeds into accounts that earn about 4 percent after taxes. The interest just about covers the $3,700-a-month oceanview home he is currently inhabiting. "I've never been a renter in my life," he says. "It's not bad."

Economist John Talbott, author of Sell Now!, applauds the notion of renting in a market like this - even if it isn't part of the classic American dream of owning your own home. "Maybe you don't live to the same standards, but don't worry about it," he says. "If we're talking about the chance to bank $1 million, that's real money."

The economics of renting make sense to Spencer and Jacey Davis, 31 and 29, who are moving to the Boston area - probably for no longer than 18 months - with their three children for Spencer's next assignment with medical technology company Medtronic. They took their sweet time weighing one rental in Concord that they'd been able to talk down to $1,800 a month against another in Andover that was asking $2,000.

Why no rush? "There is no competition," says Jacey. "We were hoping to get a bigger bargain." They did. The Davises are moving to the Andover rental. Monthly payment: $1,850.

Lower your expectations

Drive a hard bargain.

Consider renting

NEXT: Step away from the exotic mortgage

Shop for a rate drop

Keep an eye on your equity

Reporter associate Doris Burke contributed to this article.

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