I own a condo in Palm Desert, CA, where my husband and I were retiring. We also have another primary residence near Riverside.
We bought the apartment in 2008 for $ 363,000 – then the market crashed and it was about half worth it. In 2010, my husband died. I managed to pay off the mortgage and now I’m told it’s worth about $ 415,000.
However, the taxes are almost $ 4,000 / year and the HOA is $ 570 / month. While I still have a mortgage on my primary home, am I wondering if I should sell the apartment as it has now got the original sale price back, or should I wait and hope it rises even more?
Even though I could rent it, I tried several times and always had terrible tenants, which caused me so much stress. I do not know if I should sell it to relieve myself of taxes, HOA fees and stress, or try to rent it again in hopes of better screening my tenants? I’m 72, so I’m too old to go back to work.
Skeptical about sales
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I’m really sorry for your loss and would like to congratulate you on dealing with a difficult financial situation after your husband’s death. It’s not a small achievement, so I hope you can congratulate yourself on what you have been able to accomplish.
From your letter, it is clear to me that this choice is emotional for you. You bought this apartment and imagined a long and peaceful retirement with the love of your life. And then that future was stolen from you. Think you never moved into the apartment even after you retired because it was too bittersweet. At the same time, I’m sure it’s hard to get rid of something you and your husband have bought together. To do so would be another acknowledgment that he is gone.
You may have already realized this, but if you have not done so, you may want to consider talking to a therapist or confidant about your loss and grief before making any specific decisions about what to do with the apartment. If your emotions are what are holding you back, it will be helpful to address them.
That said, I would like to answer your question, which is whether you should sell now or wait. As Rick Brooks, co-owner of Blankinship & Foster, a wealth management consulting firm in Solana Beach, California, told me last year: “That timing of the housing market is almost as difficult as timing the stock market. And as he pointed out, the cost of buying or selling is a house much higher than the cost of buying or selling a stock.
Right now we are in a seller’s market and have been for some time. There is a housing shortage across the country, which affects both home buyers and sellers. This shortfall comes nowhere, and most economists expect it to continue to support house prices even as mortgage rates rise.
““Timing the housing market is almost as difficult as timing the stock market. »”
But rising interest rates can reduce the demand for home buying, as higher interest rates increase the cost of buying a home for families across the country. Most economists expect rising mortgage rates to dampen house price growth in the coming months. This does not mean that house prices will fall, but they will simply rise more slowly according to most projections.
Since the risk of falling house prices still seems low, you have time to think about your options. When you are considering selling now or waiting, you need to ask yourself what you would do with the money you make from selling the house.
If the proceeds from the sale can pay off on your mortgage in the home you live in, you will free up a large portion of your monthly income by eliminating monthly loan payments and HOA fees at once. You may even have some money left over that you can invest to compensate for other costs, such as long-term medical care or for vacations and hobbies.
If you decide to sell, you can hopefully commit to looking ahead. Playing the regret game and repeating what you should and what you could have does no one any good. I’m not saying take the money and run away, but I’m sure your deceased husband does not want you to fall victim to doubt about something that was meant as a gift from yourselves to both of you …
So every time that day comes, be grateful for the opportunities it can open up for you – and avoid checking the latest property value on Zillow afterwards. Good luck with your decision.