Time for release from the bother
Question: First, thanks for your interesting programs. They offer variety and useful information. My question is whether I should sell a house I own in the Phoenix area now or wait. I bought it in the 90’s when I lived there and it’s managed by a local company there. I’ve got some reasonable equity but also 10 years of depreciation (i.e. taxes on any gain). Of course, there are also selling costs. The house recently became vacant. I’m sure the value will remain fairly flat for years but I’m in my early 60’s. I don’t need the money but also not the bother. What do you suggest? Thanks. Ed, Tulsa, OK
Answer: I may be reading too much into your question, but it seems to me you already know the answer: You want to get rid of it of it. So, I would.
However, that may be easier said than done. Home prices are still trending down in most major metropolitan areas, including Phoenix.
For instance, from December 2007 to December 2008 average Phoenix-area home prices dropped 33 percent. They dropped another 13 percent over the same period the following year. The price declines are moderating. According to the most recent S&P/Case-Shiller Home Price indices, prices in Phoenix are down 1.7% from November 2009 to November 2010.
“However, with the economy gradually recovering, employment improving, and the foreclosure problem apparently past its peak, odds are good 2011 will be a transition year in the Phoenix-area housing market,” predicts real estate professor Karl L. Guntermann at the Arizona State University W.P. Carey School of Business You can read his report here:
Perhaps this is also a year of transition for you? Get the house in order, work with your accountant to come up with a tax savvy price, develop a relationship with an agent and test the market. You still have equity in the place so maybe a reasonable deal can be made.
Of course, I imagine if you held on for another couple of years you would do even better at sale, assuming real estate begins a slow climb off bottom. Then again, the market might stay down far longer than conventional wisdom suggests.
So, rather than base your exit strategy on a forecast I would pay attention to your desire to eliminate the bother.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?