Cash Out or Stay Put

With real estate prices skyrocketing in Silicon Valley, some of my friends are deciding to cash in on their homes, grab the extra bucks and take a hike out of town or out of state and live the good life somewhere else with lots of money to spare.


It's a conversation we seem to be having at every social gathering. Asking prices are just the opening bid. Homes are selling for hundreds of thousands more above the listing.

It's a crazy, crazy time and place here in the San Francisco Bay Area. Those of us who have lived through the boom, downturn and boom again know it can never last. Which is why many are taking advantage of the latest boom to sell out and high tail it to less expensive, but beautiful, climes elsewhere.

For some, the decision on where to move is easy....go closer to family who live out of state, finally get to the warmer, dryer deserts further south or join one of the ex-pat American colonies outside of the United States.

Anywhere less expensive.

While the decision seems to be easy for some, it's not so easy for me. Oh, I have no doubt I can make new friends, but I still like the old ones. They've stuck around still knowing all about me and my own pathologies. Guess I can the say about them. There is comfort in that.

I've moved around a lot in my life. Attended several different high schools, lived up and down California as well as back east in Rhode Island and Washington D.C.

New England is beautiful for the seasons and of course the colorful, blazing leaves of fall. Washington D.C. is exciting for the International-ness of it all.

Folks on the east are curious about ex-Californians. I still remember the questions I would get when living on the east coast, "You left California because......?"

I can hear it now all over again. "You got a job back in California and you left a second time. You moved out of the Bay Area because....?"

Yet, I understand the draw of making a big killing in this mad real estate market. I just don't know where I would go to live permanently.

I've lived for a while in the Sierra, Pollock Pines to be exact. The small Gold Rush town is located off of Highway 50 directly east from Sacramento to Lake Tahoe. It was majestic. That's a thought. If I don't mind digging out of the snow several months year, it could work.

Then there is family as a draw. I have family back east, in Southern California and here. Los Angeles is out. Too big, too congested and too hot. Back east is too humid and scorching in the summer, then there is that snow thing again. Rather deal with snow here than there.

I have several friends that are buying "retirement" homes in Palm Springs and Palm Desert. They see these homes as investments for later. Frankly, the idea of living in a location where the temperature reaches triple digits a good part of the year doesn't appeal.

It's becoming clear I'm a weather snob.

Finally there is a cost to selling. It really isn't all cash up front. I learned I'd have to spend a lot to sell, costs I never considered. Kind of took the thrill out of it all. Such dry stuff as:

• Real estate agent commissions.
• Closing costs and credits to the buyer.
• Transfer taxes.
• Capital gains tax. From Nolo Press, "If you earn less than $250,000 on your home sale (or $500,000 if you're married and filing jointly), don't worry -- you won't owe a thing in the way of capital gains taxes. But if you earn more than that, you'll want to look further into the matter. Once you've subtracted things like the costs of preparing the property for sale from the supposed gains, you may not owe the tax."
• Moving costs
• Home improvements to get the house spruced up for selling.

All these fees and costs can eat a big bite into whatever windfall I think I will gain from the big sale.
After reading my own reasons for not selling, I guess the answer is clear.

I don't really want to move even if I could stash a fair amount of cash. I just don't know where I'd go? Not to mention I'd have to retrain a whole new group of friends.