Q: In a recent column (Sept. 4) you wrote that property values have escalated for a number of reasons, including low interest rates. You further asserted that...

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Q: In a recent column (Sept. 4) you wrote that property values have escalated for a number of reasons, including low interest rates. You further asserted that when interest rates rise, there would likely be significant adjustments in the market that could have catastrophic effects on homeowners.

With all that said, you ended your column without any advice or guidance for how individuals can protect themselves. The obvious question not addressed is simply, “So what do we do now?” Should individuals not purchase homes?

— D.K., Dallas

A: How you respond depends on your circumstances and where you live. Both vary a great deal, so there is no “one size fits all” answer.

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What you do depends on whether you rent or own, and whether the area you live in is expensive relative to renting or cheap relative to renting.

Renter in an expensive area. If you are renting and live in an area where houses and condos are expensive, continue renting.

Let others take the risks of ownership, particularly if there has been a lot of speculative investment buying in the area.

Remember that speculative owners need to find a way to cover monthly costs. There is a significant chance that those owners will end up subsidizing you as a renter because the property will cost them more to own than they can charge you for rent. Any city that has, or will have, a large supply of new condos and houses on the market is a good candidate for remaining a renter.

But suppose you are desperate to own. Then what do you do?

If you’ve got the income to support it, you look for a vacation home in a reasonably priced market.

Renter in an inexpensive area. In this circumstance you have a luxurious choice. If the area is so inexpensive that you can reduce your shelter costs simply by owning a house, you should buy if you expect to live in the house a long time.

There is, however, a caveat: Some areas are inexpensive and will remain so because they are losing population, have miserable weather, etc.

Owner in an expensive area. If you own a house that has appreciated rapidly and would like to downsize or leave the area, this is a good time to sell.

According to the cost-of-living calculator at homefair.com, for instance, a Boston homeowner earning $100,000 a year can move to Scottsdale, Ariz., and maintain the same standard of living for $72,800.

Most of the major coastal cities are good places to leave — if your work (or lack of same) permits it and you want to make a change. Many people near retirement but with less of a nest egg than they hoped can convert a perilous retirement to a prosperous one simply by moving to a less-expensive area and downsizing.

Owner in an inexpensive area. Here, you can simply hold and wait for better times. You aren’t exposed to a major loss the way homeowners in most of California, Florida and the Northeast are.

The important thing to remember is that prices are relative and people are mobile. Seven years ago, when I told a brother who lives in Los Angeles that my wife and I had sold a little Eastside Santa Fe, N.M., house for an unbelievable $200 a square foot, he said: “Scott, you should leave Dallas more often. That’s cheap. Anyone from L.A., San Diego, San Francisco, Chicago, Boston, Washington, New York or Miami would think it was a steal.”

He was right. It has since resold at a much higher price.

Questions about personal finance and investments may be sent to Scott Burns at The Dallas Morning News, P.O. Box 655237, Dallas, TX 75265; by fax at 214-977-8776; or by e-mail at scott@scottburns.com. Questions of general interest will be answered in future columns.