There are--and always will be--(dis)advantages to owning and renting. Rent payments typically are cheaper than mortgage payments on both coasts; whereas, it's vice versa in many markets in "fly-over land" (ie Midwest, TX, etc). Regardless of the foreclosure situation, rent in certain parts of the DC metro, Greater Cleveland, Dallas, and ATL has continued to escalate; it is stagnant in other areas; and it has decreased in other areas.
I recall attending a DC area REI meeting during summer 2008 where some landlords complained about excessive vacancies and declining rents; yet, others celebrated at the same meeting about increased occupancies and escalating rents. What gives? How can both be true in the same market? Well, upon a closer inspection, one saw that occupancies and rents increased the closer the properties were located to downtown DC. AND properties located closer to DC Metro (public transportation) stations, or in close proximity to the major transportation arteries sold/rented for higher values.
Stated another way, one saw people, who couldn't afford to live as close to downtown DC, move closer. That cycle repeated itself a few times over the past couple years--both for rentals and non-rentals. Plus, larger apts have economies of scale such that the owners sometimes can afford to rent a few units for less, and still turn a profit. Doing this effectively undercuts the smaller investors who might only own a rental home or 2, because 1 vacancy often translates into 0% occupancy for them.
I saw similar things happen in parts of Cleveland, Chicago, and ATL--but not in exactly the same way.
One point that hasn't been raised is that all of this activity--for better or worse--has helped to gentrify various neighborhoods. Maybe that's a good thing for some, and maybe that's bad news for others.
Another thing that hasn't been addressed is that areas that have continued to experience population growth--like the DC metro (due to the "federal bubble" [which translates into more jobs and 'perceived' job security])--continue to see rising property values and rents in certain areas. DC isn't alone; I've read about similar things in NC, TX, parts of AL, etc.
So in a nutshell I view the expiring of the housing tax-credit as flushing after relieving myself: it's gone--and what a relief! At least have of the buyers were REPEAT buyers, and the tax-credit didn't do much--if anything--for them (myself included) for the most part. Yet, I do wonder what will happen once the swirling waters from our financial-flush will reach our financial water-treatment plant.