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It only becomes remotely intelligible if you include these extra constraints: - Assume all other houses in the area also appreciated the same amount as the pos
by graedus 9y ago
It only becomes remotely intelligible if you include these extra constraints:
- Assume all other houses in the area also appreciated the same amount as the poster's house (say 2x).
- Assume the poster will only consider a move within the same area.
Now if they want to make a "lateral" move, they are looking at $2m houses, not $1m houses, since all other houses they would consider - local to their area - also increased in value.
I feel like they should just get a $1m house (yes, a "downgrade") if that's the case and have fun with their near-$1m profits, but what do I know.
- secabeen 9y agoI don't think there are $1m houses in their area. My guess is that the value of a $2m house in that area is land $1.5m, structure $500k. Even if they downsize the house cost by half, and buy in a smaller lot, the minimum house cost is still $1.5m. I think the one element that the OP is missing is that after the transaction, he is better off by about $130k in tax due to the increase in basis of his home. If he eventually sells and doesn't buy another home in that area, he will realize an additional $130k in profits on the second home that would be lost to tax if he had not sold the first house.