If you don't want to lose more value, price the property well below the market - precede the bottom, if you will - and get out. This is traditionally the slowest time but well-priced, well-prepared properties still will sell.
At this stage, that appraisal carries almost no weight I'm sorry to say.
Best of luck to you, whatever you decide to do.
Please let me know if you need a resource for that. I am glad to help in any way!
Century 21 All Star
Funny, so many realtors said, "hold on, it won't drop that much, prices will come back up soon, etc" is this the new, "prices never go down"????
Read my phoenix real estate blog, my mathematical predictions for the market have not missed yet, and it will continue to drop the rest of this year for sure.
Your gain is substantial, whether you sell or not. If you have a renter that's covering your costs at the very least, perhaps holding it will be your best long-term decision.
Our friend Hi in Virginia seems to have all the answers. However, when one steps back and looks objectively at your situation you have to consider certain variables. Do you really NEED to sell now? Since this is not a primary residence of yours I would advise holding out for a while. The market will return. If you need or really want to sell now price it properly so that you will be attractive to buyers/investors. If you do not owe more than the $195k purchase price you noted above you will still make out well.
get your money now
"a bird in the hand is worth 2 in the bush"
and the price isn't going up anytime soon
you probably will not get 390K for it today
but get rid of it, make some profit
390 - 195 = 195
how long at your job does it take to make 195K
You bought at a great price in a great location. Pricing throughout Scottsdale is trending down and will continue for probably another year. I watch market statistics in the area and do the numbers almost weekly. Just as you have seen your appraisal drop 40k in the last year and a half, the trend may continue til at least '08 given supply and demand. Would you hold on to a stock when you know it's trending down and will not change for at least over a year. It may be a good time to take some profit on this asset by selling, perform a 1031 tax deferred exchange on something you're buying at 75% of market or lower and then dig in for the future 5 years. The best investors always make their money when they buy, because they buy right and cover the majority of the risk. If you re-positioned the money to a multi-family dwelling like a 4 plex in that same basic area, you might even come up cash positive on a month to month basis.
Personally, the only reason I would advise selling today, due to the market conditions, is because you have identified a better investment that you consider "cheap" at these prices, and so you want to move your money to that other investment. Think of it like selling Intel to buy Apple. You still plan to be invested, but you think there's a different investment that you like better.
If you plan to sell and then sit on the sidelines, there's a reasonbly good chance that when you decide to re-enter the market, prices won't be any better then, than they are today. You see, to know we've hit the bottom, we'll have to be able to see that bottom in the rearview mirror, which means prices will have been going up for a while.
And all the while you are sitting on the sidelines, you lose many of the other advantages that being a property owner have. Tax advantages come immediately to mind.
One final thing to strongly consider, with regard to selling real estate, is that selling is not cheap. With commissions and escrow fees, it's going to cost more than a $7 trade at Scottrade. And then when you buy again, you'll pay escrow and mortgage fees. Will this new bottom really be that much lower to offset those additional costs?
So my advice would be, if you plan to stay invested, then sell if you want to buy something different/better, but hold if you were thinking of sitting on the sidelines.
What were your plans for the property in general? If you were not considering selling the condo to cash out, were you planning to keep it for the next 10 years? If cashing out was your motivation all along and this was a short term investment for you, perhaps now is a good time to do so. If you thought of this as more of a long term investment, and you do not have to sell, perhaps you should keep it. Real estate appreciates over time despite periods of decline. Real estate is one of the most popular investments is because of its consistent appreciation coupled with the some fantastic tax incentives.