We are trying to figure out if we should move once before we retire, or just wait until we retire. Our house is large for two people, and we would like less property. But the kids have friends here they like to visit on breaks, and stating the obvious, it costs a lot to move. We dont count the house in our retirement assets, but we do assume little or no mortgage expense.
Regarding insurance and health, it scares me sometimes to go off hiking by ourselves now. That doesn’t mean we don’t do it, but I do think about it. Proximity of stellar medical care will be an important part of where we wind up in retirement, and neither of us has any noteworthy medical issues. Airports is another big consideration. We want to be near people and have people come visit (but we do like our privacy also).
We are deferring the decision, but lean toward staying… The taxes are reasonable, and the mortgage is low (and will be gone in 6 years). We have one kid an hour away and another that enjoys vacations in this area. (His skis will probably stay here). The question for us is how much to spend on the much needed kitchen/bathroom/etc updates in our 22 year old house.
Our house is too large for us now, and frankly was even when everyone was home. Perhaps we should have sold some time ago, but we did not want to sell twice, and I had thought that my wife would retire by now. I estimate that it costs 6% - 10% to sell a home when you factor in everything; it’s not a price I want to pay more than once.
Our home is probably 15-20% of our assets, depending on what you count in assets (for example, does deferred comp count?). We do not count it in our retirement assets, as we might split time between two homes that cost half as much as our current home, but in any case, you have to live somewhere.
For us it was mandatory to sell the house. Our house in NJ had appreciated to the point where I could not afford to buy it, and could only afford to live in it if I was working because taxes were so high. I was very uncomfortable having so much equity (and so much of my net worth) tied up in the house, and this was back in 2007 and I was very worried about the housing market. So with no job, we sold the house, paid off the small mortgage, moved to NC, bought an almost as-big house with no mortgage and still had plenty left over to live on.
We have a lot of equity. But we also have a $10K/year tax bill on our house, and a total of 8 mortgages. If we sold it could buy a smaller place to live for cash and have enough left to pay off 4 or 5 of those mortgages.
Freeing up that much cash flow would let me retire immediately. But I like my house and don’t want to move.
It’s a dilemma. 
@NJres , I’d like to be you! 
As a matter of fact, NC is in my sights for extended visits, mainly because D is headed there for college.
Our house is too big (5600 square feet) and taxes and other carrying costs are fairly significant and I feel bad consuming utilities for this enormous space. There is no skiing or recreation nearby, @colorado_mom. Just a pool and it’s not likely to be used as much without D home. H swims laps at his fitness club.
@notrichenough , you must really like your mother-ship house! I like our house, too, and I’m going to enjoy it as much as I can now, knowing that as soon as H decides to stop working, he’ll want to move. Trick is to keep him from updating too much of it in the meantime!
For most of you, you are probably still enjoying appreciation. Where we are in TX, I consider the house a sunk cost.
Our house is 1900 sq ft; 3 bedrooms, 3 bathrooms, and very energy efficient. Market value now 400K, taxes about $8k a year, which is too much if you ask me! I don’t know how to figure its value in relation to our defined benfit pensions- I guess about 20%? We love our house, and to get the equity out of it, we would have to move to a much lower cost of living state or town. That’s not something we would choose to do unless we were retired, and that is still at least 7 years away. (And we OWN IT!!! Yeah!!! Paid it off a few months ago!)
@anxiousmom, there aren’t many feelings better than paying off a mortgage. Congratulations.
I guess we should count our blessings about our modest real property taxes. You get hit with higher rates when you place is $1,000,000 or more, I believe. That includes A LOT of houses on our island & also quite a few condos and townhouses. Real estate in our state is still VERY expensive, no matter how modest the home.
People have big house in Texas. One guy in my office sold a house here and bought a 5000 sqft house in Texas.
@AttorneyMother, we’ve only (!) got 2500 sq ft, so it’s not overly large. Got 3 empty BRs while DD is at school, and a dining room that gets used once a year. So we could go a little smaller. A lot of the housing stock around here is really old, and we don’t really want another project house. We did enough of that on this house!
We are very lucky - we bought at the bottom in '92, and have ridden a big appreciation wave the last 20+years, even considering the Great Housing Collapse of Aught-Eight. There is very little inventory right now, and a lot of it is is often old, tired, and with a ton of deferred maintenance. Bidding wars are common. It will be tough to buy something smaller for a decent price.
@anxiousmom , Congratulations!
I can’t recall, but I thought I read you are in Austin on the real estate thread and it’s a very healthy market. We were just there for SXSW.
The only thing we could have done to make our house more energy efficient would have been to go geothermal when we built it, but the builder said the lot wouldn’t accommodate it too well. As it is, we use a wind power utility so as to minimize our CO2 footprint. H may still get his wish and put up solar panels if we decide to stay. So, to my thinking, it’s a largely economic decision.
We have a perfect southern exposure for solar panels, but I’d have to cut down all the trees in my front yard, and I can’t bring myself to do it. Or pay for it. 
@DrGoogle , there are many Californians who have the same wide-eyed look. H just hired 3 of them in the past couple of years. One of them is building a 7000 sq. ft. house (crazy, I know).
@notrichenough , with a few exceptions, inventory is not short. The builders go further and further out and some people do not mind the commute if they can get more house. I would prefer smaller, myself, with everything in the right place.
Don’t cut down the trees!
We have got slightly less than 2400 sq ft, but we think it is too large for us. The house is leased out because we currently live in another state.
I heard that we need to move back and live there for 5 years as our primary residence before we can sell it, otherwise there will be taxes due to the capital gain (i.e., appreciation of the house.)
I always thought anxiousmom lives closer to Rice University. I guess my recall is incorrect.
I wish the SXSW could someday “draw” DS back to this state. I am not optimistic though.
Live there 3 years as primary residence out of last 5 years to exclude it from capital gains or do a 1031like-kind exchange for another rental property of equal or greater value and defer taxable gain.
…
According to this article there is wiggle room on the capital gains.
http://www.bankrate.com/finance/money-guides/computing-capital-gains-on-home-sale-1.aspx
@mcat you will be happy to read it.
Live there 2 yrs out of last 5 and doesn’t have to be sequential and you don’t have to be living in it. Also some good stuff on rentals.
Rats! There is a catch if you sold a house prior to 1997 and rolled the profit into buying your current house. Darn. As usual our timing was off by 6 mo.
We have one retirement foot in North Carolina and will surely be there at some time. We bought the house next door to my 88-year-old father in NC, who is doing great (and doing or overseeing most of our yard work there). DH and I have talked about the timing of a sale of this house. There is so much work to be done to get the house ready, but he is just not mentally ready to do that, so we have agreed that when he is no longer working, we will get the house ready, put it on the market and move to NC. Similar to other posters, the house has a market value of about 20% of our assets, but we are not counting it as “retirement” until we actually sell.
Our property taxes will go down by 85% when we do this move.
http://www.irs.gov/uac/Publication-523,-Selling-Your-Home-1
See IRS Publication 523 for home sale rules.
I think you might have misunderstood. Even if you had profit you rolled into your current house under the pre-1997 rules, if you sell it now and meet the “live there” requirements you can exclude all the gain up to $500K if married. You have to lower your basis to account for the rolled-in profits, though. If that pushes you over the $500K mark… bummer. But at least you’d be getting $500K tax-free.
Rentals are trickier - you can no longer move back into a rental for a few years, and then sell it and exclude all the gain. That loophole was closed back in 2008 or so I think. Now you have to pro-rate it based on the percentage of time you lived there vs. owned it. There’s some corner cases based on when you bought it and if you lived there before you rented it, IIRC, but I don’t remember the gory details. And regardless, you have to recapture the depreciation.