Hi All,

Looking to get some advice on what I should take as my next steps.

My wife and I purchased a new construction town home in the Bay Area 2 years ago for $1.15M, plus the builder allowed us to pay for upgrades in cash which ultimately kept our property taxes a bit lower. Mortgage is at 3.375% fixed for 30 years, $775k left.

We still love our home but long term as we grow our family, we want to be in a SFH with a yard. Over the past two years the area has really appreciated rapidly and now I estimate I can sell my home for $1.6-$1.7 (our neighbor sold for $1.8, but the market has softened over the past 3 months).

My question is- should I start looking to move now, while there is this momentary drop in interest rates and slight drop in market pricing? This would in theory get me out right around the $500k appreciation limit, correct?

My concern is that I really want to keep my monthly payment similar to what they are now, but any new home I purchase would be north of $1.8M. I could put another $150k in, but I think the increased property taxes on a $1.8M house makes it unaffordable, as well as the potentially higher interest rate.

If I worked with a smaller custom builder here, could I pay for the finishes out of pocket to reduce the overall purchase price of the house and thus keep my property taxes more manageable? I know there still needs to be an appraisal, but not sure where the limit is in terms of paying for things out of pocket vs. directly being reflected in the purchase price of the home.

Thanks for the advice!