Author Topic: Help! Do we sell our house stay a little longer?  (Read 2339 times)

MrsStubble

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Help! Do we sell our house stay a little longer?
« on: April 24, 2016, 02:51:42 PM »
Hi guys,

My husband and I have been wrestling with the timing around selling our house and I really need a second opinion on this.  Basically, the values of the houses in our neighborhood are dropping due to increasing amount of high crime near us (shootings, daytime carjackings, armed break-ins, etc.).  We wanted to move away anyway, but were originally planning on waiting a few more years until we paid off our debts and had more of a stache built up.   Now I feel like we really need to push that timing up for safety and $$ reasons, but my husband thinks we can wait another few years.    The questions is should we sell now, cut our losses, and get the hell out of here, or should we stick it out another few years until the debts are paid off and we can save up more money for a down payment on a new place?

Here's the info:

Originally purchase of house $206,000 in 2007 as an as-is complete fixer upper.  This house was $50,000 less then any house in the neighborhood and needed a lot of TLC, which we did ourselves over the years.   We finally finished everything last year, so we're now enjoying a house that's in move-in ready condition.

House sale value (per realtor):  $180,000 - 195,000 range.  Housing in our area has gone down b/c of the crime and the realtors we've talked too all agreed the expect values to keep declining, although by how much and how fast, we don't know.  Last year houses we're selling in our neighborhood for $205,000 - 240,000, now there are like 4-5 houses for sale right now just in my neighborhood between $180,000 - $200,000, including my next door neighbor, and they aren't moving.

Mortgage:  $150,000  (3.1% - 4 years into a 15yr refi)
Principal/Taxes:  $1100/mo
Mortgage Interest:   $400/mo
If we stay 1 more year mortgage will drop to $140,000.
If we stay 2 years, mortgage drops to $127,000
If we stay 3 years, mortgage drops to $110,000

- $25,000 renovations & some lingering pre-MMM debt - 0% CC till end of 2017 - will be paid off in full before then
- $12,500 student loans (3.0%) - Will pay off after
- No other debt.
- No non-retirement stache beyond our emergency fund ($6k) because we've been paying down debts and maxing out 401ks and IRAs for the last few years.

If we sold now we'd want to rent for a while until we're ready to find a new place to live.   The rents in the safer areas near our jobs are about $1400-$2000/mo for a 1-2 bedroom.   The cheapest studio i can find is $1200 but we'd need to rent a garage for my husband's growing side-gig.  We can't afford to rent something and still pay the mortgage here at the same time.

As strange as it may seem to some, my husband grew up in bad area and is completely comfortable with the crime and staying in the house.  I definitely did not grow up anywhere like this and although I have had my experiences living in bad areas before, i am not comfortable owning a house in an area with this kind of crime.   

Renting the house out is not an option. There are a bunch of reasons for this, just don't want to get into the details.

So, do we cut our losses, get the hell out now, and save money and pay off our debts while renting? 
Pay the debt off first, sell next year, and save for our next house while renting?
Stay 2+ years, pay off the debts, build some savings, and take a chance on the neighborhood before we sell?

Cassie

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Re: Help! Do we sell our house stay a little longer?
« Reply #1 on: April 24, 2016, 03:52:10 PM »
I would take the loss now and get out. I would not want to live in an area that I did not feel safe and it sounds like the prices will keep dropping. It sucks to lose $ on real estate. 

mozar

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Re: Help! Do we sell our house stay a little longer?
« Reply #2 on: April 24, 2016, 03:57:12 PM »
Does moving mean leaving your jobs? How much of a loss would you be willing to take? Would you be OK with an offer of 180k? Less? If none of the other houses are selling, yours might not either, and it would be a moot point. I lived in high crime areas for many years until I could afford to buy something in a safe neighborhood. I'm glad I waited but I will admit it was a low quality of life, being scared all the time. When a woman was attacked in front of my house I was ready to go.

Dee18

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Re: Help! Do we sell our house stay a little longer?
« Reply #3 on: April 24, 2016, 04:54:16 PM »
Sounds like time to get out, maybe financially but definitely because you want to go. 

Axecleaver

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Re: Help! Do we sell our house stay a little longer?
« Reply #4 on: April 25, 2016, 11:10:04 AM »
Quote
The realtors we've talked too all agreed the expect values to keep declining, although by how much and how fast, we don't know.
A realtor will always tell you that the time to buy or sell is right now, because they're financially incentivized to do so. You can't use a realtor to advise you on real estate timing.

If housing values dropped precipitously in a year, that could just as easily be a short term problem. Do you think your neighborhood's crime is getting better or getting worse? From your description, it sounds like it's getting worse, and then property values will continue to decline. If your neighborhood isn't moving at 180k, you need to go even lower to get a sale. Houses will sell fast if they are priced right. Anything sitting for more than 90 days is either very unique or not priced correctly. 

frugaliknowit

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Re: Help! Do we sell our house stay a little longer?
« Reply #5 on: April 25, 2016, 01:59:17 PM »
There's no correct answer here.  It's hard to say whether it will get worse.  It could get better, for all we know.

I only wanted to point out that a good reason for selling NOW is that your fixups are "fresh".  In 5 years, they won't look as fresh and you might need to refresh yet again...

MrsStubble

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Re: Help! Do we sell our house stay a little longer?
« Reply #6 on: May 08, 2016, 06:23:39 PM »
Thanks everyone for the feedback.   I checked around with some police friends, a realtor, and some of the "old heads" in the neighborhood who've been here for a while.  We've decided we're going to sell, but per the realtor thinks we can actually get almost we paid for it ($200k) since our house is updated compared to the others, is move-in ready, and we're on a better block  (good block, bad block, safe block, crack block, etc).   

We're going to rent closer to work in a nicer area for a while until we figure out our next step.  Luckily it's a small city, and the nice places are just a mile away, which will put work in walking distance for me, and only a 2 mile bike ride for my husband.   Barring rent, we will actually save money with this move since we won't have to drive for safety reasons anymore.  Go figure.