If you sell now, you are subject to ordinary income tax consequences...IF you're making a profit.
I really don't understand. You have incurred expenses in the transaction, and have yet to realize any real value in purchasing the home...unless you bought it in order to flip it? The answer really lies with your original objective when you bought the home. THAT is the time that you should have been considering your exit strategy.
The pros and cons that you ask for are really dependent on your original objectives. I do believe prices will be decreasing when we start paying real mortgage rates rather then these unbelievably low (and manipulated) interest rates. I also believe that you buy rental properties for the cashflow, not the projected appreciation if you are doing a 'buy and hold' strategy for real estate. Rents are good. Home prices will appreciate over time. They are appreciating now based on the simple logic of supply and demand and will continue to do so based on two factors- real jobs starting to show up so that people can buy, and the FED continues to print money. As soon as foreign investors start taking money out of our economy, or jobs don't materialize, we will see sluggish appreciation or probably a decrease in pricing. Either way, you have time.
If it were me, I'd rent it out for at least a year or more before deciding whether to take your 'profit'.