[quote=AN]I’m a little late to the party but I personally would sell, keep the free cap gain and buy two $550k house in San Diego. The tax free $400k is too good to pass up. My gut is also telling me that 2 $550k houses would probably cash flow better than the $1.1m house.[/quote]

+1
Great suggestion AN

If you got no choice and your going anyway and you really really want to insure you come back, except I would modify it a little and pick up two rentals (condo probably) below 200K, and one decent place in the 6-700K range that you would not mind moving back to or retiring in later.

Heck if you got that much equity this strategy would not be a bad Idea even if you are not moving.