sd2oc I believe the two events are independent and may be treated as so.
Let’s start with your home in CV.
What you decide to do with it depends on your outlook for San Diego housing.
– If you believe the market is going to bottom out soon and then appreciate then you may want to wait and hold on to your home and then sell when the market comes back up. (Personally I do not believe this is the case) If you do hold on to your home you can rent it out. Turning the home into a rental is an outstanding way to help shelter some tax expense. Note that once you do NOT live in the home 3 out of the last 5 years, you will lose the capital gains exemption once you do sell the home. Yet to be honest, I would not worry to much about that at this point. The real question is, given your mortgage payment, mello roos (if you pay them) and HOA (if you pay them) and any additional expenses like prop tax and insurance will stack up against rent. More then likely you will have a negative cash flow but how negative is something you would need to calculate.
– If you believe the market is going to go down and continue to go down for the next several years then it would be best to sell now. Personally my opinion for CV is that the market will go down there and it will then be flat for awhile and then start go rise slowly. I think that CV detached homes have held up quite well and the lions share of depreciation is ahead for these homes, not behind. I think that the area is susceptible to problems if we see disruptions in employment and/or interest rate hikes. Yet I don’t think it is something that will happen in the short run. However in the next 2 years it will be interesting to see where CV is at.
6 months from now? Well I don’t think things will be radically different but we will definitely be in a period where seasonally there are fewer buyers.
**************
As far as buying goes my advice, and I cannot stress it enough) would be to rent for awhile if you can. I think the OC is going to get hammered and it is perhaps even more stretched then SD is in the high priced home areas. I also think the OC is a year or two behind SD in the depreciation cycle.
**************
As far as staying home and commuting goes? Well… Does your husband take the train? I know it is kind of a chore but I think it is not nearly as taxing sitting on the train as it is sitting in traffic.
**************
Anyways not sure if I gave any definitive advice. My personal choice would be to sell CV, even if it means a loss, and rent in the OC… pocket cash and in a few years buy a nice big foreclosure or distressed property in Laguna.
