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.