SAN FRANCISCO—Wouldn't it be convenient if someone had clear, intelligent answers to most of your CRE-related questions? Problem solved. Nina J. Gruen, a.k.a. Ms. Real Estate, a.k.a. the principal sociologist overseeing market research and analysis at Gruen Gruen + Associates, is here to answer readers' questions.

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Dear Ms. Real Estate,

My husband and I are in our late 50s and both of us plan to retire within the next four to six years. We currently live in a 3-bedroom, 2½-bath home in Mountain View, California. As you know, Mountain View is in the heart of Silicon Valley. We purchased our house in 1991, at the nadir of the recession, for slightly over $400,000. We have paid off our mortgage. We have kept up the maintenance so our home is in good condition. Local brokers inform us that its current value is between $1.4 and $1.6 million. Our question is, should we put our home on the market while the market is hot? We would then plan to move to an older, 2-bedroom apartment and invest the money in an Exchange Trade Fund.

—To Sell or Not to Sell

Dear Sell or Not,

While you provided much useful background information in your question, there are still several important unknowns. One thing you may be considering is to stay in your home so that you can pass it on to your children, who, under current California laws, could inherit the property with its Proposition 13 lower assessed property value tax base. But given all the changes that can occur before you both depart, to perhaps a better world, Ms. Real Estate suggests you not consider that option. If you no longer need the space, you could also rent your home. If your home is in good condition due to your ongoing maintenance, you would be likely to generate $5,000 per month rent. But, of course, you should check my estimate with your local brokers. However, the rental option only makes sense if you're reasonably sure you will not need to utilize the equity during the early years of your retirement.

If you select the option of harvesting your equity by selling your home now, you would be hit by capital gains taxes, which at the federal level are 23.8% and in California are 13.3% for any amount over your purchase price, plus the $500,000 deduction for married couples. But as we all know, tax rates can and do change.

While the post-recession years (from 2012 onwards) have seen steep price increases in Silicon Valley and the Bay Area, particularly San Francisco, most economists do not anticipate any decrease in the coming years – though the rate of future increases has already and may continue to decline.

A key question you should answer before evaluating your options is whether you and your husband would consider moving out of the Bay Area to places where the cost of living, particularly housing costs, will place a much smaller strain on your post-retirement budget. For example, if you moved to Nevada or Arizona, you would be able to purchase or rent a lot more – a way lot more – house or apartment for the money.

I am very aware that making such important lifecycle choices is never easy. But Ms. Real Estate recommends putting all of your priorities and choices on the table prior to making a final decision.