Quality problem - need advice

[Juice Authority]

The real estate market here in S Cal - Irvine in particular - has shot through the roof and I want to cash out. We bought our 9 months ago for $500,000 and put about $100k into it and now it's worth $900,000 easy. My wife is tired of moving around. We buy a place, live there for a couple of years and sell it and then move up to larger house and so on so and so forth. So far, that startegy has proved to be a good one.

This bubble is bound to break at some point. Interest rates are starting to creep up. The housing market is the only thing holding this otherwise shitty economy together. What we're seeing is a false appreciation driven by low interest rates. People have more personal debt than any other time in human history. Once rates go up these people are not going to be able to afford their mortgage payments, especially those locked into 2,3 and 5 yr arms. The default rate is going to shyrocket creating a surplus in supply which will ultimately drive down the value of homes.

I want to cash out before that happens but I'm fighting a losing battle. I want to sell and rent. She won't have anything to do with that since the house is her security. Sort of like nesting syndrome. Any advice on how I should approach this differently with her.

 

[DcupSheepNipples]

Only way around it is you would have to dump her and your profit would go up in flames! Seriously it's gonna burst just like in the late 80's! Maybe this next week! Greenspan is doing some speaking in a few days that is not going to be good for the Housing market! Your pretty much fucked unless you give her some good cunglings she might cum around!

 

[Juice Authority]

Only way around it is you would have to dump her and your profit would go up in flames! Seriously it's gonna burst just like in the late 80's! Maybe this next week! Greenspan is doing some speaking in a few days that is not going to be good for the Housing market! Your pretty much fucked unless you give her some good cunglings she might cum around!

Dumping the wife is not an option. Do you have any links to what Greenspan plans to say about the housing market?

 

[HumorMe]

Dumping the wife is not an option. Do you have any links to what Greenspan plans to say about the housing market?

I think it might have something to do with KY jelly and a condom but I could be mistaken about the condom.

Seriously though, if you are not attached to the house and the market is ripe, I would sell the hell out of it. Not too often, if ever, you can make that kind of money in such a short period of time. The only drawback would be, what will you do for housing?

 

[HumorMe]

What is the rent on something you would feel comfortable in?

 

[Juice Authority]

What is the rent on something you would feel comfortable in?

About $2,500 - $3,000 a month. The rate of appreciate in the housing market in S. Cal is scary. It can't continue and if I wait I'll be kicking myself in the ass for not selling.

 

[Daisy_Girl]

JA, I can relate because it is the same in LV right now. Property values are climbing thousands of dollars each DAY. Our house hasn't even broken ground yet and we have made almost $20k this month.

Is there an option for moving to another state/place? You could cash out, take the $$ and buy outright another place.

The problem with renting is the total lack of tax breaks. Might be harder for her to feel like she is "nesting" if you don't own the place. Can you buy a smaller luxury condo? Not a ghetto apartment-style condo, but a NICE place.

 

[HumorMe]

About $2,500 - $3,000 a month. The rate of appreciate in the housing market in S. Cal is scary. It can't continue and if I wait I'll be kicking myself in the ass for not selling.

It would be hard for me to not sell if I could make $400,000+ in 9 months time. I have been reading about the crazy market in California and I see no way for it to continue much longer. The timing is going to be crucial as to when you sell.

Good luck and just explain it to your wife why you should sell. It doesn't take a rocket scientist to see it.

 

[Daisy_Girl]

JA....have you thought about the capital gains tax....since you have been in your house for less than 2 years, won't you get hit hard?

 

[Juice Authority]

JA....have you thought about the capital gains tax....since you have been in your house for less than 2 years, won't you get hit hard?

Yeah, that's part of the hesitation. July will be 1 year which will make it a long term capital gain - approx 15% - as opposed to ordinary income tax. If we wait the 2 years then we'll be tax exempt up to $500k. That's a lot of tax free income! I wish I had a crystal ball.

 

[Becoming]

JA - A lot of people say that the housing market won't fall till after the babyboomers start dieing off and then it will drop by 35-40%... You could sell now, but I think you will leave a lot of money on the table...

Plus- I don't think the value will drop back down below what you bought if for... I would sit on it for a while and see what happens...

 

[sh4dowf4lcon]

Sit tight Bro, or at least sell and BUY. To rent is to pay someone else's mortgage. If you have the finances you have indicated, I can not see a single financial adviser suggesting you RENT when you can own and build equity.

Sell and Buy or Sit tight, but dont sell and RENT ---> IMO