Creditnet participants are the best. Here's my question: Our home has appreciated dramatically. I could pocket 117k if I sell now. Would you wait a few years hoping to build greater value or would you take the money and run if it means moving into a smaller home? Thanks again. CardKid
Why? The market is pulling back. Stay in until there is a decrease in market value of your area. If you don't have to sell then stay put or keep the property as a potential rental.
Why? The market isn't pulling back. Stay in until there is a decrease in market value of your area. If you don't have to sell then stay put or keep the property as a potential rental.
If you have lived in the house for more than 2 years I believe you donot have to pay any gains tax, right now. Maybe that could change in the future. Ask a accountant if you should sell. Lucas
The market is simply amazing. Homes in our area are lasting mere days before sold. Many homes, businesses (including a football stadium less than 10 miles away), and shopping centers are under construction. I priced our model in several sub-divisions and was shocked to discover the asking prices. With this rate of growth, I would not be surprised if our area of Arizona became the next San Diego. We've decided to continue building equity. Thanks for the input. CardKid
Jobs are increasing, and the economy is growing at a moderate rate. If this is the case in your area, and you can handle the payments, and there are not other reasons to move (better job, better schools, more house than you actually need or want, etc.), why sell now?
Great question. The $117,000 potential profit would be the only reason. However, a number of gated communities are springing up and I'm not certain how this affects our home and other homes that aren't in exclusive subdivisions. In fact, the builders are holding lotteries just to decide who gets to live there. One plus for us is that only one home is available for sale within four or five blocks in either direction. Were wondering if our home's value has peaked. It's only about 24 months old and it's been appraised for $296,000. CardKid
The only way to answer your question is to do a spreadsheet looking at some options. If pocketing $117 K would allow you to put a hefty downpayment on a less expensive place, get a great mortgage rate without PMI, and have a big chunk to invest (say 50K or more) with an average annual return of about 9%, which is very realistic over a long term investment, you would probably come out ahead to sell your home and invest. You can't realistically expect property to increase at the rate you've experienced recently on a long-term, ongoing basis. The answer is further influenced by your age, your projected retirement age, the age of your children (if you have any), the part of the country you live in, and the saturation of the local housing market. Your current debt load is also a factor, as well as the security of your current profession. Personally, I am a firm believer in the maxim "a bird in the hand is worth two in the bush." I got burned by a rapid appreciation and equally rapid depriciaion of a home I purchased in a "hot" neighborhood and so therefore I'm not all that rosy about the staying power of home equity. If I were you I'd consult a respectable financial advisor to help guide you in this decision, but I'd probably cash out, rent a home (let someone else take the risk of depreciation, rising insurance rates, personal liability for slip and falls etc etc), and invest the whole $117K in a well-researched portfolio that would be expected to return somewhere around 11-13% over a long-term period (like 20 years). You'd be a millionaire in fairly short order. Whereas in most parts of the country, there is a limit to the rapid appreciation most homes will realize before they settle into a more predictable growth, and I don't think that you'd be able to outpace the market over the long haul. Just my thoughts, worth exactly what you paid for them. Good luck to you Poochie
Great advice. As I awaited a reply, another home has popped up for sale in our subdivision...and another has a "For Rent" sign in the yard (a few blocks over). CardKid
why not refinance ? you can cash-out some of your equity and still own your home for future appreciation. but you have to analyze the numbers, can you afford the new monthly payment vs. the amount you get on the re-fi, pay down CC debt, treat yourself to something nice, education expenses, etc.
I agree. If you can afford the payments, refinance, take the cash out and invest it. That way you have cash AND the house.
