Hold or sell in CA--

[docstudent]

I purchased my studio condo in LA, for 235G in '09. Fast forward to '13, the unit is valued at 289G. I owe 219G on the unit, and I'm contemplating selling the unit. At the moment, I'm not behind on payments or anything, and I have a stable job. Though, I don't know if the market is going to plunge or not. The flip side is I'm not certain if I will be able to afford to purchase in the area if I sell. Moreover, should I hold or make a profit.

Stats:
Take home: 3750 after deductions

Pre tax: 400 to 403b
Disability insurance: 176
Vacation account: 150
Saving:10G
403b #1: 30G
403b #2: 15G
Retirement account: 75G
Mortgage: 1450/ 30 yr@ 3.75
HOA: 349
Car: 399
Insurance: 144
Phone: 89, Internet 56, Electricity 20.
Gas 65, Groceries 185, Gym 150.
Credit card: 5200/ 185
Credit card: 3200/ 185
Upcoming student loan, 725, 3/14

[MonkeyMama]

I am not sure I understand why you want to sell.

Questions to ask:

--Are you willing to rent and is it financially feasible (cheaper?). I wouldn't sell without a solid plan.
--How will you feel if you stay and home prices fall?
--How will you feel if you sell and home prices skyrocket?

I think you just need to think through the consequences and the risks. But, I think you also need to start with the "What are your alternatives?" Where are you going to live?

What was your long-term plan when you bought the condo? I ask this to get a sense of your overall plan without market fluctuations.

[disneysteve]

You're spending 48% of your take home pay on the condo between the mortgage, taxes, insurance, and HOA. And your student loan payments haven't hit yet. That will take nearly 20% more. Plus over 10% on a car payment and another 10% on credit card payments. So that's 88% of income going to debt payments. That's insane. I think you need to clean up the mess.

Selling the condo is one option but then where would you live? What options are available for more affordable housing - keeping housing costs under 28% of income ideally?

[docstudent]

I can rent or relocate to a more feasible part of the country. I've enjoyed my time in CA, but I'm open to move. If I sell, I should be able to net about 57G. I could pay off my CC debt, plus add 21G to my emergency account. The student loan is a problem, but I can decrease my 403b, and vacation account..that will add $550 more to my take home. I should have the CC debt paid off by June of '14. As a result, I will have an additional $360 or so a month. I just saw the net profit, and thought about taking advantage of the opportunity. I truly enjoy LA, and my neighborhood, but a net profit of over 50G...something to consider. On the other hand, the growth potential is unlimited....I believe it can increase by 100G, its that type of neighborhood...

[MonkeyMama]

Okay, your clarification makes more sense.

I am sure the profit potential is more than 100G (living in California, it's been absurd at times), but the thing is you never know what the market is going to do. Cashing out at a time that will put you in a good financial position, makes sense.

[LivingAlmostLarge]

How much is renting? Where in LA? LA even a 1 bd can run at least $1k maybe more. Depends on whether you are able to rent for less.

Also when are you relocating? For sure or just hopes?

[docstudent]

Selling....

After I thought about it, it became a no-brainer. The unit was put on the market on Thur, and we received an offer for 279G. Today, we countered at 289G. I'm waiting.....If the counter offer is accepted, then I will accept.

[WISEWOMAN]

Congratulations. I think it's a wise move for a single unit. The cost of housing in L.A. is outrageous however, you should be able to find comparable housing (a single) for the amount you pay on your mortgage.

I hope to sell and relocate within the next five years. If I were to sell today (and rent) I would pay double for the same square footage.

[LivingAlmostLarge]

Congrats! Where are you going to rent? And how much?

[docstudent]

I'm still waiting to hear back. I decided to rent a room, and reside in LA till Dec. I plan to put 30G down on a condo in the Midwest, which will leave me with a 35G mortgage, YES. I found a unit for 65G, 2br/2bath...there are many on the market within that range. I will have approximately 30G in my emergency fund, plus I'm not too worried about finding employment. I could even take a pay cut, until I find something that I really want to do. I'm hopeful to land a job, in the 70G range. I should hear back really soon...many people told me not to but the unit, but I'm glad that I followed my own intuition....I will net over 50G in just 4 1/2 years...it kinda worked out...no more credit debt, plus 50% down on a condo, cha-Ching!!

[docstudent]

Offer accepted

I was able to get the full price of 289G- YES. I'm going to transition and stay at a friend's house till Dec. After that I will relocate back to the Midwest or some other low cost area. I'm still doing my research, but I def want to buy a place before I get there. The average condo in the region is listed around 50G to 75G. My goal is put down 35G, and finance the rest. I'm not too worried about work, I will def be able to find something-to hold me over. I can take a paycut (momentarily) bc of my decreased expenses. The other option is to stay in LA till June, and save up more money. My friend is very generous, and she doesn't use the house...she purchased it as a place to retire. Though, I will most likely give her $450 a month. I ended up with a total net of 58G. I plan to payoff my credit card debt, 35G down on a new condo, 10G to be put in my emergency account. I would have a total mortgage between 35G or less.