Tell me what to do – Piggington's Econo-Almanac

This topic has 130 replies, 15 voices, and was last updated 15 years, 9 months ago by (former)FormerSanDiegan.

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February 9, 2009 at 12:05 PM #15011

sc_alum
Participant

Just kidding – I’m just hoping to get some 3rd party/disinterested input on a sh*tty situation that I’m too caught up in to look at objectively. If you hate Temecula/Murrieta and think that it’s the 7th level of hell, no need to read further.

We’re being relocated (which is a cool and exciting thing), and are homeowners in Murrieta (next street up from Harveston, so very close to Promenade, etc), and so we need to decide what to do with our current house.

The details:
Bought new in early 2003 for 363,000, 20% down, 5% 30 yr fixed (payment right now is 2100 PITI, all told)
3500 sq feet
Vintage Reserve
Put in:
Pool and hardscape = 40,000
Walnut flooring = 17,000
Granite, stainless steel, blah blah – very well upgraded and we’ve got it totally dialed in – I’m in love with it.
At the end of the day we’re in it for give or take 120k
Never refi’ed, no Heloc’s

So we’re moving – no question there. The market SUCKS, obviously, and has hit us hard. I’ll be honest, I didn’t really care when we had no need to move – our payment’s awesome, our house is gorgeous, no issues.

Market analysis (2 different realtors) puts our probable sales price at 319,000, plus probably closing cost concessions.

Ray of light: The relo package includes covering Realtor comission as well as a 2% bonus to us for successfully signing a contract of sale.

Crappy part – more than likely, we’re looking at getting out for give or take 320,000 – a loss of 100k-ish.

So now the question(s):
Do we cut our losses and get out?
Do we rent it out? (I picture someone dragging a large sofa across my hardwood and I cry 🙁 )
I have to think we’re in the “overshoot” period or the correction, so how long does that take to revert to a more reasonable norm? Our area is looking at only about 4 months of inventory. Most of the glut of forclosures has hit and passed and been absorbed. Do any of the housing bailouts that are coming down the pike have any chance of propping prices at all, or inflating them at all?

Basically, just looking for any thoughts other than my own, good or bad. If you feel like musing on my problem, I’d appreciate the input.

Thanks

February 9, 2009 at 1:07 PM #343251

Coronita
Participant

Is this a forced relo?

February 9, 2009 at 1:07 PM #343573

Coronita
Participant

Is this a forced relo?

February 9, 2009 at 1:07 PM #343681

Coronita
Participant

Is this a forced relo?

February 9, 2009 at 1:07 PM #343710

Coronita
Participant

Is this a forced relo?

February 9, 2009 at 1:07 PM #343807

Coronita
Participant

Is this a forced relo?

February 9, 2009 at 1:09 PM #343256

Anonymous
Guest

You asked for some advice, so here’s my attempt at some wisdom:

It seems like you are being more objective than most folks these days. The thing that you have to accept is that the decline in value and cash put into upgrades are all a sunk cost. This money is gone and you have to make your decisions based upon what the market price is now. Your investment lost $100K – there is no changing that.

Since you are leaving the house and it will no longer be your home, don’t be sentimental about it. Now the house is just an asset with a market value, nothing more. Your decision should be based upon objective facts and financial goals, such as risk levels, liquidity needs, tax consequences, diversification, etc. Don’t just hold on to it because you like it.

Your $100K loss over 6 years averages to about $17K per year. I’m sure this stings, but it sounds like you have a good career, so it isn’t much in the long run.

February 9, 2009 at 1:09 PM #343578

Anonymous
Guest

You asked for some advice, so here’s my attempt at some wisdom:

It seems like you are being more objective than most folks these days. The thing that you have to accept is that the decline in value and cash put into upgrades are all a sunk cost. This money is gone and you have to make your decisions based upon what the market price is now. Your investment lost $100K – there is no changing that.

Since you are leaving the house and it will no longer be your home, don’t be sentimental about it. Now the house is just an asset with a market value, nothing more. Your decision should be based upon objective facts and financial goals, such as risk levels, liquidity needs, tax consequences, diversification, etc. Don’t just hold on to it because you like it.

Your $100K loss over 6 years averages to about $17K per year. I’m sure this stings, but it sounds like you have a good career, so it isn’t much in the long run.

February 9, 2009 at 1:09 PM #343686

Anonymous
Guest

You asked for some advice, so here’s my attempt at some wisdom:

It seems like you are being more objective than most folks these days. The thing that you have to accept is that the decline in value and cash put into upgrades are all a sunk cost. This money is gone and you have to make your decisions based upon what the market price is now. Your investment lost $100K – there is no changing that.

Since you are leaving the house and it will no longer be your home, don’t be sentimental about it. Now the house is just an asset with a market value, nothing more. Your decision should be based upon objective facts and financial goals, such as risk levels, liquidity needs, tax consequences, diversification, etc. Don’t just hold on to it because you like it.

Your $100K loss over 6 years averages to about $17K per year. I’m sure this stings, but it sounds like you have a good career, so it isn’t much in the long run.

February 9, 2009 at 1:09 PM #343715

Anonymous
Guest

You asked for some advice, so here’s my attempt at some wisdom:

It seems like you are being more objective than most folks these days. The thing that you have to accept is that the decline in value and cash put into upgrades are all a sunk cost. This money is gone and you have to make your decisions based upon what the market price is now. Your investment lost $100K – there is no changing that.

Since you are leaving the house and it will no longer be your home, don’t be sentimental about it. Now the house is just an asset with a market value, nothing more. Your decision should be based upon objective facts and financial goals, such as risk levels, liquidity needs, tax consequences, diversification, etc. Don’t just hold on to it because you like it.

Your $100K loss over 6 years averages to about $17K per year. I’m sure this stings, but it sounds like you have a good career, so it isn’t much in the long run.

February 9, 2009 at 1:09 PM #343812

Anonymous
Guest

You asked for some advice, so here’s my attempt at some wisdom:

It seems like you are being more objective than most folks these days. The thing that you have to accept is that the decline in value and cash put into upgrades are all a sunk cost. This money is gone and you have to make your decisions based upon what the market price is now. Your investment lost $100K – there is no changing that.

Since you are leaving the house and it will no longer be your home, don’t be sentimental about it. Now the house is just an asset with a market value, nothing more. Your decision should be based upon objective facts and financial goals, such as risk levels, liquidity needs, tax consequences, diversification, etc. Don’t just hold on to it because you like it.

Your $100K loss over 6 years averages to about $17K per year. I’m sure this stings, but it sounds like you have a good career, so it isn’t much in the long run.

February 9, 2009 at 1:18 PM #343272

sc_alum
Participant

Not a forced relo, but a very desirable one that we’re excited about. Executive level position in a major global company.

I ran the numbers, and could certainly make the argument to myself that we basically “rented” for 6 years, plus a tax write off benefit… that takes out some of the sting. And got to live in a house that we loved and that we had fun in, etc etc.

But now that it’s time to make the financial decision, I’m stuck as to whether to rent or to sell.

Sell pros: Don’t have to manage a rental property from 3k miles away, get SOME equity out of the deal, have no mortgage debt to count against us if we want to buy over there.

Sell cons: Lock in the “loss”, lose out on any re-appreciation of the market since it seems like we’re selling into the absolute worst market in my lifetime.

February 9, 2009 at 1:18 PM #343593

sc_alum
Participant

Not a forced relo, but a very desirable one that we’re excited about. Executive level position in a major global company.

I ran the numbers, and could certainly make the argument to myself that we basically “rented” for 6 years, plus a tax write off benefit… that takes out some of the sting. And got to live in a house that we loved and that we had fun in, etc etc.

But now that it’s time to make the financial decision, I’m stuck as to whether to rent or to sell.

Sell pros: Don’t have to manage a rental property from 3k miles away, get SOME equity out of the deal, have no mortgage debt to count against us if we want to buy over there.

Sell cons: Lock in the “loss”, lose out on any re-appreciation of the market since it seems like we’re selling into the absolute worst market in my lifetime.

February 9, 2009 at 1:18 PM #343701

sc_alum
Participant

Not a forced relo, but a very desirable one that we’re excited about. Executive level position in a major global company.

I ran the numbers, and could certainly make the argument to myself that we basically “rented” for 6 years, plus a tax write off benefit… that takes out some of the sting. And got to live in a house that we loved and that we had fun in, etc etc.

But now that it’s time to make the financial decision, I’m stuck as to whether to rent or to sell.

Sell pros: Don’t have to manage a rental property from 3k miles away, get SOME equity out of the deal, have no mortgage debt to count against us if we want to buy over there.

Sell cons: Lock in the “loss”, lose out on any re-appreciation of the market since it seems like we’re selling into the absolute worst market in my lifetime.

February 9, 2009 at 1:18 PM #343730

sc_alum
Participant

Not a forced relo, but a very desirable one that we’re excited about. Executive level position in a major global company.

I ran the numbers, and could certainly make the argument to myself that we basically “rented” for 6 years, plus a tax write off benefit… that takes out some of the sting. And got to live in a house that we loved and that we had fun in, etc etc.

But now that it’s time to make the financial decision, I’m stuck as to whether to rent or to sell.

Sell pros: Don’t have to manage a rental property from 3k miles away, get SOME equity out of the deal, have no mortgage debt to count against us if we want to buy over there.

Sell cons: Lock in the “loss”, lose out on any re-appreciation of the market since it seems like we’re selling into the absolute worst market in my lifetime.
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