Time to sell in Cali?

[motion]

I always told myself I'd unload my house as soon as I saw the prices start to slip... seems like the time is now. I'm stuck here in SoCal for at least the next year, so I'd have to rent a condo after selling. This would be tough... small garage, no privacy, etc. I'm used to a large home with a pool and spa and plenty of privacy.

If I hang onto it, I could lose $200k easily in the next year. Anyone else on the fence? What's plan B?

[tabs]

You betcha Toyota.....

Remember there is risk in just renting as well the RE market could very well still appreciate.

[84porsche]

I would keep the math simple. How much would you pay in rent. For the sake of argument $1500 a month - $18,000 a year. If you feel the housing market is going to drop significantly, then sell now but don't forget the extra expenses. Storage expenses beyond the $18,000 a year. Let's say $12,000 for storage and utilities then you are definitely going to come out on top. Are you planning to leave So Cal after next year? Are you going to take your gain and invest in property elsewhere? If you make a good enough investment, you will clear half of your expenses living in condo or something else. Have you considered a motor home? I don't know how much stuff you have but I know many people who sold high and moved into these until the housing bubble bursts. Just some random thoughts.

[BlueSkyJaunte]

I've got a barn you could keep your Duc and 'Priller in.

[Superman]

If you sell, and ultimately decide this was a mistake, it will be because of additional profits you could have made and did not. If you stay and ultimately decide you made a mistake, it will be because of profits you had, and let slip away. So it seems simple to me and based on your question I'd guess you see it the same way. ..... It sounds like you might be satisfied with the appreciation you will capture if you sell now (even after subtracting rent and storage costs). Knowing you may be foregoing additional appreciation over the next year, if you are satisfied with your California real estate "killing," cash out and don't look back.

[on-ramp]

if you have a 5 year horizon, just keep it....you're trying to "day trade" your house? i dont get it.

[tabs]

84 forgot to factor in the Mortgage your paying on....So mort. payment, insurance, property taxes vs rent.

No easy choichs....I am in a sell now or sell later position.

You have upside risk if you sell and downside if you stay. U can hedge your risk by downsizing into something smaller. RE pricing is really all an illusion, it goes up it goes down. Remember if you stay and it goes down everybodys RE is going to go down as well...so what have you really lost.

I am much more concerned with buying power than price.

I guess the best advice is to downsize by buying something smaller...yet comfortable.

[techweenie]

Housing is strong in most other parts of the country, but Cali seems to be a few years ahead of everyone, and it's pretty shaky right now. Hard to know. I sold 2 years ago, thinking I was at the top and missed $855K in subsequent appreciation.

:-(

[motion]

I think I'm leaning towards unloading.... LOL, Dork, I don't consider it "day-trading". I like to think of it more as "I'd rather have a couple hundred thousand more in the bank for my retirement". Buying something smaller is really not an option. 2 bdr condos are selling for $480k here... they'll be the first to slide 50% when the market collapses, so I'm right back where I started. Renting something for 1800 a month and minimal utilities, no landscapers, pool maintenance, property taxes, etc sounds like the way to go for a year.

I'll be moving to Montana in a year and will have very strong purchasing power, relative to Cali.

[pbs911]

If you plan on moving out of state, then I agree it is time to sell - if you can. You may be too late. According to an appraisal expert I took the depostiion of last week, currently in Laguna Niguel for every 75 homes listed there are 10 potential buyers. Last year this time there were 10 homes listed for 10 potential buyers. The cost hasn't decreased, just the buyer pool.

[techweenie]

Originally posted by motion
I'll be moving to Montana in a year and will have very strong purchasing power, relative to Cali.

Going to Montana soon...
gonna be a dental floss tycoon...

Keep in mind that even if we have a slip 'n' slide here, Montana may still be appreciating. Any way you can buy the place up there right away and rent it out for a year?

[turbo6bar]

Originally posted by pbs911
According to an appraisal expert I took the depostiion of last week, currently in Laguna Niguel for every 75 homes listed there are 10 potential buyers. Last year this time there were 10 homes listed for 10 potential buyers.

Ouch. I've read the doom and gloom, but no hard facts, until now.

Ouch!

[motion]

That's good info, Paul, thanks. Reflects what I've seen recently with friends' attempts at selling their houses. My home is extremely unique in the neighborhood, so it qualifies as being much more desirable than the average home.. hope that will come in handy attracting the buyers.

Techweenie - I plan on building a custom home on 50-100 acres. I'll work on getting the land purchased right away, then start building next summer.

[techweenie]

Originally posted by motion
Techweenie - I plan on building a custom home on 50-100 acres. I'll work on getting the land purchased right away, then start building next summer.

Sounds great. I'm from that part of the world, so if you like the company of beautiful, fit women as much as I think you do, you'd better BYO.

The local stock is chunky, prefers plaid pendleton shirts and is fiercely xenophobic.

[84porsche]

Just out of curiousity. What's in Montana?

Tabs, I was assuming the property was paid for. But you are correct either way their is property taxes. Rent also has a downside as you are really getting no value for your money. At least in a mortgage you still have access to your money.

Another thought - Motion could you rent out your own property now? The rent on property in So Cal has got to be through the roof. You can easily make $200-$300 on top of your mortgage pymt assuming your int rate is low. At the same time, borrow against your home and take out enough money to buy your Montana land. I know it sounds risky but if all works you end up owning your So Cal property, your Montana property and your rent for your last year. Renting could be a hassle but it sounds if you live in a good neighborhood and have a pricey property. Just my .02.

[RoninLB]

housing liquidators have a heads-up on the mkt.

[Moses]

"Grandpa, tell us the story about how you made a fortune selling California real estate short."

"Shut up and close the trailer door, you little brat!"

[JavaBrewer]

Originally posted by motion
Techweenie - I plan on building a custom home on 50-100 acres. I'll work on getting the land purchased right away, then start building next summer.

So I'm curious about that much land and custom house (always wanted to contract my own too). Where in Montana is the land and roughly what will the land cost? Are you from there?

I was looking at a 5 acre property in Gardner Valley (just South and lower of Idyllwild CA ) to put a vacation home on. Beautiful area in the mountains and still accessable to LA. For ~ $125K had a lot full of mature pines and mountain views.

[motion]

84 Porsche - I ruled out renting the house... if it depreciated, I'd still be in the same boat as if I owned it. Not willing to take the chance.

David - I grew up in Montana and lived in Bozeman and Great Falls. Its a beautiful state with great outdoor opportunities, but is harsh during the winters. I don't plan on spending many winters there... a condo in Hawaii is somewhere in the near future hopefully. I should be able to find 100 acres for around $350k or so. Here's something like what I would like to find:

http://www.northwest-national.com/19-175.htm

A log home will cost around $100 per foot to build, so figure another $300k for 3000 sq ft.

I'm tossing around the idea of becoming a Ducati/BMW/Moto Guzzi/MV Agusta dealer in Bozeman. Its a fairly upscale, growing community that might be able to support a small Euro bike dealership. Still have to do my due diligence...

Idyllwild is really beautiful. I was looking there several years ago. You would do well to get something there.

[Moses]

Originally posted by motion

David - I grew up in Montana and lived in Bozeman and Great Falls. Its a beautiful state with great outdoor opportunities, but is harsh during the winters. I don't plan on spending many winters there... a condo in Hawaii is somewhere in the near future hopefully.

Now your plan makes perfect sense! I have spent a lot of time in Montana. It is a magnificent place. I would love to live in the Bitterroot Valley for six months a year. Add a condo in Hawaii and you may have the perfect combination.

If you can cash out and make it happen, go for it.