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My husband and I live in Canada but own a condo in Phoenix, Arizona worth about $130k. We barely use it right now because we run a business and that takes a lot of our time. We're planning to sell the business in about 18 months and become snowbirds. Yipee!
At some point we want to sell the condo and either buy or rent a small single family home in the Phoenix area) for about four months a year. We are open to either of those scenarios.
Here's the question for you all: Should we sell now or should we sell in two years when we retire? What do you guess will happen with the Phoenix area RE market between now and then? If we sell now and wait until another correction before we buy again, we'd be golden. But if the market doesn't correct for, like, eight years, we'd have to rent for eight winters. Not golden. If we hold off selling for two years or more, we might make more money if the market keeps inching up, but if the market corrects before that we'd lose some purchasing power. Of course, we'd also have to pay more if we buy again unless we wait until the market eventually corrects. Also, who's on first? LOL.
Or...we could sell the condo and covert it to Canadian cash for about a 1.30 exchange rate (which would give us $170k CAD) and just never go back to AZ. But that would be so sad!!
This is more of a brain teaser than a cry for help - we're just interested in hearing what other people have to say. Do tell!
If you aren’t paying a mortgage on the condo I think it’s fine to wait or sell now, either. The reason to wait would be the illiquidity— don’t knock it. I know it sounds strange. Having you money tied up can be good, in practice not in theory. My opinion is don’t wait to “time the market” that overthinking and it’s not worth enough to bother anyway. Trying to time the market may stress you...on the other hand it’s not worth enough to lose a lot...so if you want to try...Good luck in your retirement.
If you're not using it and you plan to sell it relatively soon, I'd go ahead and sell it now. Get out from under the taxes and insurance and take advantage of the good market now. Who knows what the next two years will bring? Congress and the stock market may come to grips with the fact that the U.S. national debt is spiraling out of control and it's time to pay the piper. Or...ignorance could remain bliss. All bets are off. Selling now seems to be more of a sure thing; or at least a conservative, prudent thing to do.
I just returned from a visit to our son in the Phoenix area. I'm not an expert, just a casual observer of the real estate market there.
I know that rental prices are increasing steadily there. It also seems that the market prices are increasing in general. That may not be true in all areas of the Phoenix metro. It certainly seems true in desirable suburbs and the downtown area. Whether you wait or not depends on your tolerance for gambling with the market.
Right now you have an investment that you can sell. Prices are going up. The market is correcting. another housing bubble burst will not happen as lenders are not writing bad mortgages to sell on Wall Street which is what happened last time.
Rents and home prices are going up. You have to weigh how much 4 months premium winter rentals cost and how easy they are to get versus your HOA fees and taxes and insurance.
Sell. No one can predict, with any appreciable accuracy what can happen to the market, your property, or you in 18 months.
It's not just carrying costs like taxes, HOA dues, and routine maintenance--it's a special assessment to fix the pool or a HOA lawsuit, your HVAC dies a catastrophic death and needs replaced. I know I sound morbid, but if you can come out ahead today, why risk it?
I learned the hard way. Not by trying to time the market, but by having a job-related, cross-country move creating a second domicile issue--these things are not always ours to control. It seems like you are in a positive position--it might be worth taking the advantage.
At some point we want to sell the condo and either buy or rent a small single family home in the Phoenix area) for about four months a year. We are open to either of those scenarios.
I'm a landlord and my rental houses are in Phoenix.
Forget renting a house for four months a year. Ain't gonna happen. The hassle of moving a tenant in, and then out, far exceed any profit I might make. And I have to pay my Realtor $1,000 flat fee for each new rental contract.
I once had this exact scenario, they wanted to rent my house for four months while house hunting. I flat turned them down. About a week later they decided to lease it for a year. They stayed 1-2 years and then bought their own house. BTW they were good tenants!
Nobody will rent you a house for four months unless you pay the equivalent of a full year's rent. I doubt even an apartment would do that.
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