Should you sell your house because of the influx of tech companies and the resulting real estate boom? The San Francisco Peninsula has certainly seen a surge in property values thanks to tech giants offering tax incentives to settle in the area. With the NASDAQ and S&P 500 hitting new highs post-pandemic, it’s clear that there’s a lot of new wealth in the Bay Area.
However, selling now might seem tempting, but it’s generally hard to go against the market’s trend. When everyone is buying, selling might feel premature, especially if the market continues to rise. Conversely, buying in a downturn can seem risky as well. The key is timing and not acting out of fear or greed.
Back in 2012, I considered selling my house for $1.7 million, but I didn’t get any offers, which in hindsight was a blessing. My view is that US property remains one of the most attractive asset classes. With low interest rates and high rental yields, it often makes more sense to buy than sell. San Francisco, despite perceptions, is still a market poised for growth due to ongoing tech investments.
From a personal finance perspective, my home’s equity has grown, and with a loan-to-value ratio of around 60%, my bank is keen on offering refinancing options. I’ve managed to refinance my mortgage to a lower rate, significantly reducing my monthly payments, which enhances my financial freedom.
Real estate gains, after accounting for hefty brokerage fees, might not seem overly impressive. I’ve only seen about a 10% net gain on my property due to these fees, which reinforces my stance that real estate commission structures need serious reform.
If I sold now, I’d enjoy increased liquidity and freedom from property maintenance. Imagine living anywhere, maybe even on a Mediterranean cruise or settling down for a few months in North Africa or Hawaii. However, the thought of leaving behind a home filled with memories makes selling a tough decision. Moreover, rents in San Francisco are skyrocketing, making it less appealing to jump back into renting.
Also, selling now could mean missing out on potential future gains if the market continues to rise. San Francisco’s property market might still have room to grow, especially with ongoing tech expansions.
Ultimately, I’m leaning towards holding onto my property a bit longer, maybe discussing strategies with a realtor to ensure I’m not leaving money on the table. While the temptation to sell is there, the potential for future appreciation and the benefits of keeping my home outweigh the immediate gains from selling.
