By Joseph Callaway
Congratulations, your 2,000 square foot 85254 home went up in value by about 70% in 2021 alone. To put all this in perspective without the percentage mumbo jumbo – Your average 2,000 square feet home in the magic 85254 zip code was worth $462,360 four years ago at the beginning of 2018. It went up to $494,160 in January 2019 and it jumped to $569,600 only a year ago. Today your modest Scottsdale mailing address home would sell for a whopping $785,700.
So, when do you cash in? Bear in mind that, unless you rent for a while you are suddenly a buyer at these new higher prices. Does it make sense to sell? Well, it certainly doesn’t make sense to let the higher prices keep you from buying. After all, you just got a lot from the sale of your home. If you are downsizing or moving to another state, you will probably be money ahead and if you are moving up now is better than later as prices will probably continue to rise.
One thing to think about is capital gains tax on your sale. The first $250,000 in gains ($500,000 for a married couple) is excluded from taxation. This makes it a good idea to move every few years as this exclusion applies repeatedly with each house you sell. If this appeals to you, check with your accountant to be sure about what you are doing.
Bottom line: all the old platitudes still apply. Take care of your home and eventually it will take care of you. In the meantime, there is nothing better than home ownership. Those monthly mortgage payments are just like a savings account and, in time, you will have more money than you would ever expect to save up. Plus, you get to make it your own, pick your own paint colors, and dream the American dream.
Joseph Callaway is co-owner of Those Callaways Team, an independent brokerage operating in 85254 for 25 years. For additional information, visit ThoseCallaways.com or call 480-596-5751.