Historically, our down cycles have NEVER surpassed the % appreciation of an up cycle, so depending on your end game, you should always make money if you hold the property long enough.

Even after reading it a billion times it made me understand nothing can surpass experience. 

I can't do math atm but I think you would just surpass the S&P 500 had you so little in it because the appreciation grew faster than your initial investment making your returns slightly higher I think.

These taxes can surpass some HOA fees!  

General rule of thumb (personal opinion) As you near a 2% deal or surpass, your risk with increase, and your "location" will tend decline.

Lastly, are you pricing it at a point that surpasses the 2006 purchase price, or are you truly pricing it at the market price?

I know our neighbor to the North has seen their dollar surpass ours, yet 8 years ago I was RVing through Canada and playing spectacular golf course for exchage in the $.60 range per our dollar.

In banking, the only exceptions I've seen is after a company surpasses a certain level of gross sales (typically $10M/yr). 

The reason I am considering it is that debt savings would surpass the penalty in less than 2 years and increase my cashflow by $1800 per month. 

If you took the rest of the difference between the premiums on the policies and invested it, over time your investments will be larger than what your life insurance needs were and somewhere in there you can decide if you need life insurance or if your investment values will be sufficient that you no longer need the life policies.We have conservative investments that have life time rates of return since 1934 of more that 10-12%, so that said, if you are consistently funding your investments and have held them long enough they can and will surpass most peoples need on life insurance.