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Am I stupid to consider selling our Palo Alto home to buy a new home in Irvine or other O.C. city?

We own a home in the best part of Palo Alto. We love our neighborhood and our schools, my kids have only known this place, and we obviously have all of our closest friends here.  BUT the cost of living is very high, and salary is stagnant. With a job offer in hand, we are considering moving to Irvine or nearby Orange County city. We are hesitant about selling our P.A. house, since over the past 7 years, it has proven to be our best investment. Yet leasing it and renting down south does not make sense financially, especially in the long run.

I would like to hear opinions about Palo Alto long-term house appreciation versus Irvine or other O.C. city with comparable (=top) schools.
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June 14 2010 - Duveneck - St. Francis
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Answers (3)

If you can afford both homes, you can purchase a second home while the taxes will be assessed at today's level and then sale when the values are higher in Palo Alto in the following 5-8 years.

Then if you change your mind about living in the Irvine area you still have your home and can always not renew the lease and then move back in.

There are many good management companies that can assist you in finding the perfect tenant. Go with one that specializes in Leases (runs unlawful detainer searches, recognizes scams), not an agent that does it as a side job.

Selling now, you are actually taking a loss since homes will appreaciate in the coming 5-8 years, if you can afford to take on a second home. If you can not afford two homes, moving straight across will save you money through taxes. Your home is down and so are the homes in Irvine. So this may be a great opportunity to get into a home while the assessment will be low, rather than buying and selling later when assessments will be high.

Good luck.
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June 16 2010
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"long term" anything will do fine. 25 years from now, you'll see these homes double at least once if not twice over
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June 15 2010
Badmukh;

We were both born and raised here in Palo Alto, and have been selling real estate here for quite a while. I think what you need to consider is, will this be permanent. If you're sure it will be, it would probably be the best course of action. Your home has appreciated well over the seven years, and it is not easy being an absentee landlord. You're right about the quality of you investment. You have the chance to take $500k of tax free appreciation while you can, and we don't know how much longer that will be an option. 

Best of Luck,

Derk
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June 14 2010
 
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Am I stupid to consider selling our Palo Alto home to buy a new home in Irvine or other O.C. city?
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