should i sale or hold?

Asked by 1st Street, California Tue Apr 23, 2013

really hard to understand the current market.
If i can think of the price my neighbor sale at , i would not rent out my house.
Now my question is, should i break my rental contract, to put my house in the market, or I should continue watching?
These few day's news indicating that the house price my stop going up, instead going down sharply, due to higher mortgage rate, less oversea investment, and more house built etc. what do you think?

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Helen Kwong, Agent, Berkeley, CA
Wed Apr 24, 2013
Home prices have been steadily climbing the last couple of years and it becomes the seller's market since around mid of last year in the Bay Area. As the other realtor have mentioned. It is not easy to predict how long this seller market is going to last. If you feel more comfortable observing the real estate market for a bit before making any decision on continue renting your house out or put it on the market. Please feel free and go to my website - and click on the - Market Snapshot (tab) to sign up. You will be able to interact with the REAL TIME (meaning most updated information) market report that is send to you. It will show you all the sold houses that are close to your house with locations and prices, as well as the houses that are currently on the market for sale, their price and no. of days on the market and much more....etc. Then you can weigh out the pros and cons and make wise decision for yourself.
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Steven Ornel…, Agent, Fremont, CA
Wed Apr 24, 2013
Hi 1st Street:

I certainly agree with what has been written below.

We are unable to predict the future -- the fact is while we have snippets of market / economic information, even the professional economists get it wrong sometimes because the economies of the world are intertwined more than ever before, which makes it even more difficult for one to be correct with an "educated guess". So, in short, you have to make decisions based on what you absolutely know to be true now and what you believe will happen and why you believe it to be so.

Right now, most of the Bay Area is experiencing a "Seller's Market".
Here are a few Fremont metrics for Detached Residential property Q1-2010 to Q1-2013:

Median price of for sale properties is up 14% at $690K
Median price of sold properties is up 9% at $650K
The number of expired properties is down 70% at 40
The number of for sale properties is down 48% at 395
The number of sold properties is down 10% at 236
The average days on market is down 40% to 18 days

Personally, I believe we are in a "mini-bubble" primarily driven by a reduction in distressed property supply via the bulk "Non Performing Note / REO Portfolio program" which allows Wall St. hedge fund companies to buy $100M+ residential properties.

My understanding is the homes purchased under the program must be rented for at least five years before being sold. I believe we can generally expect Supply will continue to be constrained as these properties are purchased and rented out until the 5-year sales moratorium is met; after which, one would logically assume the overall Supply of homes to increase relative to when the Portfolios were first purchased. Of course, much can change of the course of a single year let alone five years.

From my perspective, the current demand for housing is not based on a true economic rebound of sorts, but rather, simply limited supply and favorable interest rates.

Above, you have proposed a particular action; however, I too would highly recommend speaking with your CPA/Financial Planner to understand the various options you may have and identify which of those options best match what you want to accomplish on some investment timeline. Did you have a certain goal in mind and an investment strategy/plan when you bought the property? If not, perhaps it's time identify what you want to accomplish and how you will get there.

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John Juarez, Agent, Fremont, CA
Wed Apr 24, 2013
Trying to time the market buy guessing at future market conditions is a recipe for failure. For everyone who says the market will decline in the future there is someone who says it will not. Interest rates will go up at some time but we don’t know when and how much of an effect that will have on the market. More inventory will come on the market also, but we do not know how much and how soon. We also do not know whether that will simply cause a slowing of the current run-up in prices, al leveling off prices or a dip.

If you have good reason to sell, this is a great sellers’ market. If you have a tenant occupied, leased property it is likely that you can sell it “as is” with the tenant in place.

Selling because you are nervous about the future may cause you future regrets that you did not hold the property.

You should meet with a Realtor and have a conversation about your plans, fears, goals, the market and what you plan to do if you do sell.
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Brian Ripp, Agent, Fremont, CA
Wed Apr 24, 2013
Keep in mind that if you keep it as a rental for over three years all your profit could be subject to capital gains tax when you sell. You should review the answers and then speak to a Broker and an accountant.
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Dawn Rivera, Agent, Fremont, CA
Wed Apr 24, 2013
Hi In my opinion, real estate is always a good investment. I always recommend to keep it, if it has a positive income or if it is not a burden. It will eventually become a monthly income. When you retire you will like the extra cash flow. But as Jerry said if you need a large chunk of cash or just don't want to deal with renters then now is a good time to sell as it is definitely a sellers market. Also as Joe said you should talk to legal counsel to check into trying to break any contract with a renter.
Good luck, hope this was helpful....Dawn
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Joe Patel, Agent, San Ramon, CA
Wed Apr 24, 2013
Here is my 2 cents about real estate market.Right now is the seller market due to shortage of homes inventory in market.This may be golden opportunity to sell.You may want to get legal counsel about rental terms and money you will receive after sale of this home.Good Luck!!!!
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Jerry Straks, Agent, Fremont, CA
Tue Apr 23, 2013
That depends on your personal situation, needs and goals. Do you need a large chunk of cash right now or ongoing cash flow? Are you planning on selling anyway in the next 12 months or are you likely to hold it another 5-10 years for the income? Did you buy it for its appreciation or for the income? What else would you do with the money that would provide a better or safer return? A good financial advisor can help you with this decision.
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