If you can afford to hang on to it, I would expect that when the market turns around again, you will be in good shape.

Ann;
Nobody knows your finances as well as you do. In most areas since the market is down the days on market are longer than maybe what you are used to. What is your motivation? Are you willing to list your home below what your competition is in order to sell it? Active listings means not sold yet due to PRICE,location or other factors. Make your home stand out from the others! If renting is the quickest solution even if you have to feed it monthly then that might be the way to go. Income properties come with some risk. Renters can move out on short notice, they can destroy your property etc. If you are moving out of the area get a good Rental Property Managment Company to look after your investment. Good luck in your decision

Ann - you've had a couple good answers here. The best reponse I've seen it the fact you need to sit down with your CPA. This is a good starting point. You many have the ability to rent this house out and exchange (1031) it down the road for an investment closer to where you live once you know you're staying where you're going. You CPA many tell you to sell now. There are many things that go into the decision process. If you don't have a good CPA, let me know. I work with a true professional who will respond to my question promptly even during the tax season crunch. Now that's a good CPA :-).

Ann, I moved out of California in 2003 sold my house (thinking I would never move back) and moved back in 2007 . I wish I never sold my house. But with that said the advice of the other agents is all good, gather your information and talk with your financial advisor.

It sounds as if you recently bought the home or had it refinanced. I tend to recommend to clients to keep their home. However, having to cover $1,600. per month in carrying costs is pretty steep. I would talk to a few realtors to get their opinion of value and a net sheet that will show you how much you can expect to pocket (if anything) when the home sells. Then I would take this information to a financial planner. Even though values in your neighborhood historically haven't gone down, there have been times in the recent past where they really haven't gone up either. Even if you have Moreland schools, my gut feel is that unless you have a very good income (to carry the expenses) and plan on moving back to the same house in a few years, you should sell it.
A good way to look at it is if you sold the home, what would you net out of it (don't forget to include your taxes (if any) on the sale). What is the sum of the sales proceeds plus the carrying costs of 1600 a month? What is your opportunity cost of this money? To put it another way, if you had this money, what could you invest it in and what would be the return on that investment. I think that given our current real estate market, you'll find a better investment elsewhere.

Ann -

Many parts of West San Jose have been very minimally affected by this changing market. If you can't cover the mortgage with rent, it is worth looking closer at what potential net is from a sale. The best way to do this is to get a market analysis on the home. No obligation, from any agent in the area.

To me the question is bigger than do you rent or sell... it is more about your lifestyle, your investments, plans for the future, etc.. Holding on to a home in California may or may not be the right thing to do but deciding that will take a little bit more knowledge about your big picture.

I would sit down with an agent or two and maybe a financial planner to talk about your long term goals and whether or not this home decision fits into that picture. At minimum have a Realtor“ create market analysis on the property as well as a estimated seller's proceeds. These questions always bring to life different options.

CJ

Ann
My wife and I became accidental real estate investors in the same sort of scenario.
If God gives you lemons, make lemonade...of course, I would recommend asking a CPA about the tax impllications...it worked out well for us.

Given the market in San Jose, I would not sell it. No way. If have more questions post or contact me. This could be opportunity knocking.`