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Author: CCSand Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127815  
Subject: Move Now or Later? Date: 3/22/2004 1:59 AM
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In two years my hubby will be 55.

If we move now, we pay about $4-5K more in property taxes.

If we wait two years, we likely get more for our house, but also pay more for the next house, but keep our property taxes level.

???

CCSand

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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 67724 of 127815
Subject: Re: Move Now or Later? Date: 3/22/2004 11:34 AM
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Hi CCSand,

If we move now, we pay about $4-5K more in property taxes.
If we wait two years, we likely get more for our house, but also pay more for the next house, but keep our property taxes level.


Is there anything currently making it worth an extra $5,000 premium to move immediately?

Tha's the $5,000 question!

Luck!
Dave Donhoff
National Mortgage Broker/Banker

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Author: millerpim Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 67729 of 127815
Subject: Re: Move Now or Later? Date: 3/22/2004 12:20 PM
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I take it you live in CA, hence the Prop 60 reference about age 55. Did you know you are also eligible if one of you is disabled?

I'd run the numbers. How long are you planning on being in your next house? Through retirement? If so, run out a 10- or 20-year scenario on the increased taxes over that time period and compare it to your area's appreciation, which will pull up the price of the property you want to buy.

For instance, in Sacramento, the appreciation rate right now is 3% per month, which means if it continues, houses will jump, on average 36% by next year. On a $300,000 house, that's more than $100,000. If your taxes are reassesed, that property would bring taxes of approximately $4,000 a year. You'd have to live in the property for 25 years to break even, notwithstanding the offset of your initial tax base on your present property.

But you need to apply your own numbers.

elizabeth

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Author: CCSand Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 67745 of 127815
Subject: Re: Move Now or Later? Date: 3/22/2004 2:40 PM
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millerpm wrote:

I take it you live in CA, hence the Prop 60 reference about age 55. Did you know you are also eligible if one of you is disabled?

Yes, but neither of us are disabled.

I'd run the numbers. How long are you planning on being in your next house? Through retirement? If so, run out a 10- or 20-year scenario on the increased taxes over that time period and compare it to your area's appreciation, which will pull up the price of the property you want to buy.

I would like to be in our next home through retirement, but it also has to be a home in which we can raise our son, and possibly another child if we choose to adopt another. The increased property taxes if we move now amount to about $200K over 30 years.

Here's where the math gets sticky:

If we are buying and selling in the same market, our current home price will rise, but so will the home we purchase. We'll get more equity out of our home by selling later, assuming the market goes up which our real estate agent thinks will happen. So is this a wash?

If we're not buying and selling in the same market, it's more clear. It would make more sense to buy now because the home will probably appreciate more than the $200K and it would also give us the opportunity to buy a home and have no mortgage at all.

CCSand

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Author: millerpim Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 67748 of 127815
Subject: Re: Move Now or Later? Date: 3/22/2004 3:08 PM
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It would make more sense to buy now because the home will probably appreciate more than the $200K and it would also give us the opportunity to buy a home and have no mortgage at all.


Then that's probably what you should do. Remember that your new home's appreciation over the years, however, does not mean extra cash in your pocket; it's just equity.

And whether prices will continue to rise year after year, who knows. My educated guess says there will always be valleys and mountains in the market, that appreciation will continue for a while, but for how long? I dunno. In CA, I've seen prices dip, but they always come right back up.

elizabeth

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