I do agree with the points Perry made about interest and HOA cost. For the overpayment of property tax, the post was incorrect. If your home depreciates you can always go to the assessor and get it reassessed so you will not pay more in property taxes then the neighbor who lives next to you and bought at a lower price.
Additionally, I would suggest that if you are going to resell your home, that you really sit down and crunch the numbers. Don’t confine that number crunching to the cost of just selling your home either. Let me explain. Many people who post here do so before buying a home. They ask, should I buy the home. As you expect the standard answer from most everyone here is, no you should wait. Many posts have been made comparing renting to buying and lots of viewpoints are made with somewhat varying conclusions. Among the biggest point of conversation is, the cost of renting verses buying. The big topics there are of course the write off you get when you own AS WELL AS, the opportunity of investing the downpayment you would have made on the home you are considering buying.
So your case is unique. Not only have you put a downpayment into the home already, but you now have additional money you will be needing to spend to get OUT of the house.
There is no doubt that the market will continue to depreciate and it very much could hit the numbers that Perry used. It also may appreciate faster or slower after it bottoms out. Also yes if you look at the money you will pay in interest, and HOAs it adds up to potentially hundreds of thousands of dollars.
Yet here is my point. You guys made one move without REALLY thinking it out. Don’t make another one without REALLY thinking it out. I am going to type this out slowly… Go…talk…to…your…accountant…Run out a few different scenarios of what the future may hold. Compare holding onto the house verses bailing out and selling. You have numbers that you can use for estimating the cost of the sale so you know that value. Also use a few different scenarios for the depreciation cycle as well as the appreciation values in the other direction. Get information on the cost of renting so you can know what your rent will be. Your accountant can help you figure out what your tax savings or non savings will be.
I think you will find that yes, if you sell now and time your purchase correctly, that the best thing would be to indeed suck it up and bail out now. Many people cannot get over the admission of a mistake and if you did sit tight for many years and could afford the payments then you would be okay. You would be overpaying, of that there can be no doubt. Yet don’t do anything without really really knowing what the implications are.
