Anyway, a little about myself:I'm 32, married, with a 1 year old daughter at home. 

The best investments will marry these two.Typically when you check the location factor Cali is a leader in that regard. 15% of the US lives in Cali.

You have an exclusion of 250 as a single and 500 as married.

One I got recently, imagine 2 idiots married to each other...Her: Sorry for the late message but I think the front door is now gone.

That's up to $250k if single, $500k if married in tax free gain that would have been.  

What I'm unclear about is what if a married couple wanted to move in.

Marrying the wrong person/people can lead to a very, very long 3-5 year holding period.

I serve with a guy that was married to a Panamanian and he intended to retire down there.

And if you get married and are then audited you might have some splaining to do. 

Major players and funds that have 8-10 figures to play with such as GNR (aka Philadelphia Lotus) have poured countless dollars acquiring inventory, likely banking on the continued appreciation married with an impressive S8 portfolio.