Should I sell now or wait?

[jhyang23]

Hi all,

I bought a brand new property in Vaughan ON for my PR (principal residence) from a builder, which will close in March 2011.
My original goal was to list my current PR close to the end of this year and sell for a higher price than the current value so that additional capital I need to put into the new property is lowered.
However, with the higher interest rate, HST, and tighter mortgage rule, it looks like there is a higher chance that the current PR`s value may drop.

I`m considering an option of selling my current PR now, move to a rental for a few months, and move again into the new property in March 2011.
This will protect me from possible drop in the current PR`s value.
However, there is hassle of one additional move and I will lose the current mortgage rate, which is 3.5% fixed for next 4 yrs.
I`ll probably go with variable rate when I close the new property and hopefully it won`t be much higher than 3.5% for the same term.

Do you guys think it`s better to sell now or just wait till end of this year?
Is there any other option that could work?

BTW, my current PR is a 3BR townhouse and similar properties in the area get listed for around $430k.

Any opinion would be greatly appreciated.

Thanks!

 

[invst4profit]

How much do you expect the price to drop by the end of the year?
If you can accurately answer that question then the decision simply boils down to math and an additional move.

If anyone can answer that question then you may get an answer that is of some value to you. Unfortunately I can`t. Sorry.

 

[Thomas Beyer]

Exact market timing works neither in real estate nor in the stock market !

If in doubt .. go with your gut .. and only 2-5 year later will you know if you were right or not !

Can you afford both houses, .. both emotionally and financially .. assuming you rent the current PR for maybe $1200 to $1500 (or whatever the market rent is) ?

 

[jhyang23]

QUOTE (ThomasBeyer @ Apr 30 2010, 12:23 AM) Exact market timing works neither in real estate nor in the stock market !

If in doubt .. go with your gut .. and only 2-5 year later will you know if you were right or not !

Can you afford both houses, .. both emotionally and financially .. assuming you rent the current PR for maybe $1200 to $1500 (or whatever the market rent is) ?
I thought about turning the current PR into a rental unit too, but it can`t sustain itself. It`s just too expensive and I can`t charge enough in rent to make it sustain itself.
Plus, I really don`t think there is much more room for growth in value...At least for next little while...
So, I want to sell it. It`s just matter of timing.

I totally agree that I can`t time the market.
But I just wanted to see what others think about where the housing market is heading.

 

[EdRenkema]

Instead of the factors you listed driving down the value of your PR in the near future it could actually increase in value. Make your decision based on the desirability of your property and the inmigration into the area. If the economic recovery gathers traction and continues on its trend you may be sorry you set yourself up for all that hassle.
If it were me I would concentrate on paying down the mortgage as aggressively as possible to increase your equity position. That period of renting will truly be money and time wasted.
Remember you never really make money on your own home if you are staying in the area.

 

[housedoc]

QUOTE (jhyang23 @ Apr 30 2010, 12:49 AM) I thought about turning the current PR into a rental unit too, but it can`t sustain itself. It`s just too expensive and I can`t charge enough in rent to make it sustain itself.
Plus, I really don`t think there is much more room for growth in value...At least for next little while...
So, I want to sell it. It`s just matter of timing.

I totally agree that I can`t time the market.
But I just wanted to see what others think about where the housing market is heading.

430k for a 3 br th where?
You know the answer.
Sell everything or put it in storage and live with a friend, or in your car and save every cent you can until your palace is finished.

 

[housingrental]

Actually $430K isn`t expensive for a 3bd townhouse in most newer area`s in Vaughn.
If it were I wouldn`t sell.
There are costs, and the hasstle of renting.
Your not psycic and dont know if value will increase or decrease in near term.
On average housing prices tend to increase more often than fall.
QUOTE (housedoc @ Apr 30 2010, 08:30 AM) 430k for a 3 br th where?
You know the answer.
Sell everything or put it in storage and live with a friend, or in your car and save every cent you can until your palace is finished.