To sell or not to sell in San Fran --> buy in AZ (seeking pros)

[Josh Angeles]

I'm new to the BP forum and and I must say.... this is a damn good community.  That said I'd love to hear people thoughts on a transaction I'm having a hard time wrapping my head around.   

Situation: My wife and I purchased a condo in San Francisco (Dogpatch 94107), in 2012. We bought the condo for $519k. Last year we refinanced and pulled our initial down payment. The exact same unit in our building just sold for $930k. There is a real emphasis on development in this area. New hospitals, new restaurants, a few piers are being converted to shopping centers, the Golden State Warriors are planning to move in less than 2 miles away. The area is starting to be the trendy hip area of SF. We are currently renting it out and it covers the mortgage and HOA with a marginal profit. (The condo almost has no/low maintenance)

Some thoughts:

1) Is San Francisco RE unique.  Can valuations keep rising and if there is a correction, will it be minimal in SF?  If there is a correction will rents remain high (the rental market is very competitive). We have friends that have a combined income of $350k and credit score of over 730 and they had a really hard time finding a good rental.  

2) Will the new developments in my neighborhood significantly increase the value of our property over the next 2 years? (Look up Dogpatch SF and you'll know what I mean)  I have a feeling it will be like the Meat Packing district in NYC in the future. 

3) Is now a good time to get into REI in Arizona?

Here are the options we considered:

1) Sell the condo and lock in gains, and wait for a market correction ( it sounds like most guest on the BP podcasts are liquidating or just holding at the current time)

2) Do nothing, cross our fingers and ride the wave. Hoping this condo keeps flying high!

3) Look for REI opportunities and if we find any amazing deals we pull money from our mortgage.

Thanks for any feedback suggestions and connections! Cheers!