Spoken like a true economist (not that this is a bad thing). I agree with your first point, but I think you're wrong about the put option. It is not easy to "break even or minimize your losses" at all. Only if you're putting no money down would this be even close. Real estate is illiquid by definition and post 2008 nearly every foreclosure lost 100% of the equity built (and a major impact on your credit score).