Should we sell out now?

I keep reading that the housing market has dropped significantly again in the past 3 months, with 2008 looking even worse. I am worried about the economy as we are just squeaking by. Right now we are about even, we owe what the house is worth, almost exactly. Should we get out now for more affordable housing by putting on the market and hope it sells? Or risk foreclosure if the economy tumbles even more?

sell it now be for foreclosure

You need to consider Realtor fees and Closing costs when selling a home. You are probably looking between 5-10% of the homes value. I would stay in the home as long as you can. The market will rebound it is just going to take time. In most locations it is taking people on the average of 9 months to sell their homes.

If you are comfortable making your payments now, then don't sell. Don't focus on what your house is worth right now, unless you need to sell.

Here are some other things to consider:
1- Even if what you owe is exactly what you think you can sell it for, you are still going to need to come up with money at the time of the transfer for transfer taxes, title insurance, and realtors fees.
2- If you do sell, where will you live? If you think you could rent for much less than what you pay on your mortgage now, then it might be worth considering. If you want to buy again, keep in mind that you will need down payment and closing costs.

Buying and selling is not cheap. Unless you are really struggling to make the payments now, stay where you are. There's no reason to think that you will go into foreclosure if the "economy tumbles even more" unless you think you will lose your source of income and have a hard time replacing it. If that's the case, you're going to have a hard time paying for housing no matter where you live.

Best advice: don't do anything unless you have to. Ride out this wave of activity, in a few years time it will all have settled down and everyone's houses will start appreciating again.

I have been in real estate for almost 30 years. No one can foretell the future.

I remember 20 years ago Texas was having a terrible time because of a depressed oil market and our banks seemed to all be going broke. We had a few people that really liked their homes and could afford the payments but panicked that things would get even worse so they sold at rock bottom prices. You don't want to panic.

Is your mortgage about to adjust to a higher rate? Can you make the payments for the foreseeable future? Do you have any plans to move for any other reason?

If your location is a place you intend to stay and you don't think you will lose your house to foreclosure, I think it would be better to sell when prices have improved rather than sell now.

If you will be moving sometime within the next year or so anyway or you might not be able to keep making your house payment, then I would sell now.

The market is still going down and the average home takes 10 months to sell. Despite what people think, your home is not an investment, its a place to live. Keep your house for 30 years until its paid off and it will be worth more than what you paid for it.