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The Big Move: My husband and I bought a retirement home in 2008, and he died two years later. The condo unit is worth $50,000 more than we paid. Should I sell it now or wait?

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Dear MarketWatch,

I have a condo in Palm Desert, Calif., that my husband and I were going to retire to. We also have another primary residence in nearby Riverside.

We bought the condo in 2008 for $363,000 — then the market took a dump, and it was worth about half that. In 2010, my husband died. I managed to pay off the mortgage, and now I am told it is worth about $415,000.

However, taxes are almost $4,000/year and the HOA is $570/month.  While I still have a mortgage on my primary residence, I am wondering if I should sell the condo since it has now recouped the original selling price, or if I should hold on in the hopes it goes up even more?

Although I can lease it, I tried that a couple times and always had terrible tenants, which gave me such stress. I don’t know if I should sell it to relieve myself of the taxes, HOA fees and stress, or try again to lease it hopefully trying to screen my tenants better?  I am 72 years old, so I am too old to go back to work. 

Sincerely,

Skeptical about selling

The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.

Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Jacob Passy at TheBigMove@marketwatch.com.

Dear Skeptical,

I’m so sorry for your loss, and I want to commend you on managing a difficult financial situation in the wake of your husband’s death. That is no small feat, so I hope you are able to praise yourself on what you were able to achieve.

From your letter, it’s clear to me that this choice is an emotional one for you. You bought this condo envisioning a long, peaceful retirement with the love of your life. And then that future was robbed from you. I imagine you never moved into the condo, even after retiring, because it was too bittersweet. At the same time, I’m sure it’s difficult to part with something you and your husband purchased together. Doing that would be another acknowledgement that he’s gone.

You may have already realized that, but if you haven’t, you may want to consider talking to a therapist or confidant about your loss and grief before you make any concrete decisions on what to do with the condo. If your emotions are what’s holding you back, it will serve you well to address them.

That all said, I do want to answer your question, which boils down to whether you should sell now or wait. As Rick Brooks, co-owner of Blankinship & Foster, a wealth advisory firm in Solana Beach, Calif., told me last year, “Timing the housing market is almost as difficult as timing the stock market.” And as he pointed out, the cost of buying or selling a home are much higher than the cost of buying or selling a stock.

Right now, we’re in a seller’s market, and we have been for quite some time. There’s a shortage of housing nationwide, affecting both home buyers and sellers. That shortage isn’t going anywhere, and most economists expect it will continue to prop up home prices even as mortgage rates increase.

“‘Timing the housing market is almost as difficult as timing the stock market.’”

— Rick Brooks, co-owner of Blankinship & Foster, a wealth advisory firm

But rising interest rates could cut into home-buying demand, because higher rates drive up the cost of buying a home for families across the country. Most economists expect the bump up in mortgage rates will temper home-price growth in the months to come. That’s not to say that home prices will fall, but they will simply grow more slowly, according to most projections.

Given that the risk of home prices falling still seems low, you have time to mull your options. As you consider whether to sell now or wait, you should ask yourself what you would do with the money you earn from selling the home.

If the proceeds of the sale could pay off your mortgage on the home you live in, you’ll be freeing up a major chunk of your monthly income by eliminating the monthly loan payments and HOA fees in one fell swoop. Maybe you’ll even have some money left over that you could invest to offset other costs such as long-term medical care down the road — or put toward vacations and hobbies.

If you do decide to sell, I hope you can commit to looking forward. Playing the game of regret and repeating the should-haves and could-haves doesn’t do anyone any good. I’m not saying to take the money and run, but I’m sure your late husband wouldn’t want you to be plagued with doubt over something that was meant to be a gift to both of you from yourselves.

So whenever that day comes, be grateful for the opportunities it may open up to you — and avoiding checking the property’s latest value on Zillow afterward. Best of luck with your decision.

I’m 41, and my partner is 50. We have $800,000 in retirement savings and make $250,000. We want to retire ASAP but know our money won’t last. What can we do?

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