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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: FLBiker on September 13, 2019, 06:48:27 AM

Title: Should I sell now? (aka timing the real estate market)
Post by: FLBiker on September 13, 2019, 06:48:27 AM
We have a house in Tampa that we bought in 2010 for $143K.  Zillow says $220K, we're hoping to get $200-$210K.  We owe $90K.  We're planning to move to Canada in May / June 2020.  I'm starting to get nervous about a real estate market crash in the intervening 8 or so months.  Would it make sense to sell now?

This could look a couple of different ways:

1) Sell in Dec / Jan, move in Dec / Jan. 
Pros - sell before potential crash (hopefully), don't carry two house payments
Cons - DW probably wouldn't work until May at the earliest.  Since we'd be pulling our 4 year old DD out of pre-school, we'd probably just keep her home rather than start her somewhere new for the spring.  If DW kept working here through May, that's ~$20K.  Plus, DW doesn't want to move to Canada from Florida in the winter. :)

2) Sell now, rent locally, move in May / Jun
Pros - sell before potential crash (hopefully), DD finishes school, DW works, don't carry two house payments
Cons - moving costs x2, have to rent (~1300-1600 per month, maybe more for a short term lease), hassle of moving twice

Personally, I'm leaning towards just waiting and selling when we're ready to move.  It's true that our house price could go down, but either of the above plans effectively guarantees a loss of ~$15K, plus hassle.  However, I'm curious what other people think.  Currently, things in our neighborhood are selling well.

In terms of our overall financial picture, missing out on tens of thousands in gains on our house wouldn't make much of a difference (as crazy as that feels to say).  We've got ~$40K in cash, ~$70K in a taxable account, ~$100K in 457s (which we can touch as soon as we leave our current jobs) and ~$600K in retirement accounts.  In other words, we can come up with a down payment for our next house regardless.  Worst case scenario would be market totally tanks, we clear nothing on the house, and have to sell some index funds at a low ebb from either our taxable or 457s.  That would be a pretty big drop, though, and we could always just rent for a year or two to let things come back / save cash.  It doesn't feel particularly likely to me that we'd sell the house for less than $150K or so, in which case we'd clear plenty for a down payment.

Finally, this is predicated on my getting a remote job (I have a 2nd interview next week).  I think the odds are good, though, as I also have a second option if the first one doesn't come through.  If I don't get a remote job, I don't think we'd consider moving in Dec / Jan.

If you have any questions, please ask.  And thanks for your opinions!
Title: Re: Should I sell now? (aka timing the real estate market)
Post by: LifeHappens on September 13, 2019, 08:22:29 AM
I'm also in the Tampa-ish area. I don't know your neighborhood, but I have seen no signs of real estate slowing in my town yet. I've also noticed houses sell much quicker in Spring/early Summer than they do over the winter... unless you're in a neighborhood with a high snowbird population.

If I were you, I would wait. I think the costs of moving twice and renting, plus the likely greater time on market would eat up any potential difference in the sales price even if real estate does slow down a bit next year.
Title: Re: Should I sell now? (aka timing the real estate market)
Post by: FLBiker on September 13, 2019, 08:27:37 AM
Excellent, thanks!  I'm in Temple Terrace, which doesn't have a lot of snowbirds.
Title: Re: Should I sell now? (aka timing the real estate market)
Post by: daverobev on September 13, 2019, 12:43:09 PM
I'm certainly in the bird in the hand being worth two in the bush camp - but it is worth doing some risk vs reward analysis - as in, if local prices go down 20% (and hence it becomes a lot harder to sell), is it the end of the world? If they go up 20%, does that make a material difference?

If I knew I was moving, I'd put it on now I think. I don't like risk. I've been stuck with houses I'd rather have sold when markets have been sluggish.
Title: Re: Should I sell now? (aka timing the real estate market)
Post by: FLBiker on September 13, 2019, 02:41:31 PM
I'm pretty comfortable with risk (in general) and I hate to take a definite loss (either my wife's lost salary or the cost of a rental) to avoid a potential one (if that makes sense).

If it goes down 20% (meaning we clear $60K vs $100K, let's say) that wouldn't really make a material difference in terms of our ability to purchase a house.  We're expecting to spend something like $350K to $450K Canadian, so even w/ $60K US we'd be close to a 20% down payment.  We also have about $40K cash.  And it going up 20% wouldn't really make a difference, either, we'd just invest the difference.

My only fear is it going down like 50%.  If we sold our house for $160K instead of $200K, we'd be fine.