It was just like yesterday that we bid farewell to our beautiful house in a neat surbuban community in the Greater Seattle area, and handed over the keys to the new homeowner, but by now it has already been a year since the sale. Yes, in October 2005, we sold our house for $420,000 after commission before we embarked on this journey back to Asia, and today is surely a good time to review the gains and losses from our first home sale in life.
Of course, given the flood of news stories like declining prices, lower sales volume and higher inventory, we will make exactly the same choice if we are facing the sell-or-rent-out question today.
On the other hand, price levels in the Greater Seattle area keeps creeping up in the last 12 months, and our house is likely worth over $470,000 after commission cut.
So do I have some buyer's remorse? Hardly any.
First, in retrospect, either sale or leasing out is a financial neutral decision (so far). In the last twelve months, we made approximately $55,000 in our investments, and in after-tax terms, these investment gains will be even much higher than the tax-free gain of the $50,000 in home price appreciation minus the upkeep of mortgage interest, property tax and insurance (amounts to $15,000 a year) -- admittedly, all $55,000 is not produced solely from our home sale proceeds and I could have lease out the house for some more money, but likely the financial consequences of either choices are within a few grand of each other.
Second, an important decision factor in our home sale is the peace of mind. If we still keep the house, I can imagine we will have at least a few more sleepless nights (when we leave it as an empty house or occuied by a renter). Our (financial) life is already too complicated and keeping an overseas property would not help.
Finally, it is getting less relevant in our household finance to decide over the difference of a few grand a year. Now that we are likely to break $600,000 in net worth by the end of the year, more certainty in financial results certainly overweight possibility of more speculative gains (and losses).
Status Update: We currently rent a downtown furnished apartment in Shanghai -- the city's real estate price is also quite high: a three-bedroom condo in downtown sells for more than a four bedroom single-family house in our original neighborhood. Truth be told, we are still missing the feeling of homeownership in the sense that we have much less control over the interior design right now, but we certainly don't miss the financial part of it.
(P.S. Now all I am praying is the real estate cycle will play to its nadir when (and if) we decide to move back.)