Home Buying in Marin County>Question Details

Woz_fam, Home Buyer in Portland, OR

Buy vs. Rent in Marin County?

Asked by Woz_fam, Portland, OR Thu Nov 15, 2012

We are relocating to San Francisco next year and are just beginning to learn about the real estate market in the area. We are a family with young children so Marin county is appealing for the school districts. My husband will need to commute to San Francisco daily, so we don't want to be too far north. We could afford a mortgage of about 750K or a rental budget of $4000/month. Within those constraints, could we afford more house for the money if we buy or rent?

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5
Dear Woz_fam

All the previous answers are telling you to buy and that might be right assuming the market continues to move upward and interest rates start to move up too. But let's consider another option with the assumption that interest rate are most likely going to stay low through 2013 as reported, and the reality that housing inventory is currently super low. Low inventory means you will likely need to pay more due to the numerous multiple offer situations driving up prices recently.

So, now the big question is... Are you throwing money away in rent? If you are not familiar with the different neighborhoods, schools, traffic patterns, weather and other desired conveniences ... it just might be worth renting for a few months to explore different areas. It's an investment that will reap rewards when you go about your purchase. You'll have a better idea what you're looking for and where you want to be.

So, consider renting for a few months and get your bearing before committing to a house, a neighborhood or city. If you rent for 6 months now, you'll be looking during the spring to buy. Spring has historically been the time when more sellers put their houses on the market and interest rates should still be low. With more inventory on the market, a successful negotiation on your purchase is more likely. Short-term renting could be money well spent as it affords you location planning while in Marin (or San Francisco) and again, moves you to a better purchasing season.

Go to http://www.MarinViewHomes.com & look up the following rentals as of today (11/15/12) all under $4k in Mill Valley.
MLS#'s
21224195
21225015
21222370

I grew up in San Francisco and spent the last 25 years in Marin. I know both sides of the bridge really well and would be happy to discuss the benefits of being on either side of the Bay. You can email, text or call me if you have any additional questions.

Best to you,
Dan

dan.nebenzahl@cbnorcal.com
415.497.8864
0 votes Thank Flag Link Fri Nov 16, 2012
Hi Woz_fam,

There’s a lot that can happen in the year before you plan on moving to the SF Bay Area; however, let’s just assume for the sake of argument that:

1) The economic conditions will be the same next year when you arrive.
2) You plan on being in the area for at least 3-5 years

At today's rates your $4K a month "rental budget" supports around a $900K purchase loan with deductible interest and future equity! Besides this, the fact of the matter is that rental rates are still increasing in many areas (due to displaced homeowners) and will likely increase as the economy recovers and jobs numbers re-inflate.

In this case, I would look to buy; however, do not do this until you get fully Pre-Approved as defined here: http://www.Steven-Anthony.com/GettingStarted In regards to where I would suggest you obtain your "True Pre-Approval": While there are occasional exceptions in service level, I would recommend avoiding the Retail banks (Wells, BofA, Chase, etc.) for your True Pre-Approval.

Here's why: "Retail Banks vs. Mortgage Broker/Bankers" http://tinyurl.com/6qln6nd
If you would like a referral for a professional Mortgage Broker/Banker feel free to contact me via email.

By the way, a significant industry job change can set you back if you are not careful - I would suggest you start talking with a Mortgage professional now so you avoid roadblocks in the future.

Now, if you don't plan staying in the area the 3-5 years you might just consider a two-year lease.

-Steve
0 votes Thank Flag Link Thu Nov 15, 2012
@ Dino
Yes, I was assuming 20% down.

@Woz_fam
You're quite welcome. As far local SF Bay Area rental rates into the future I would defer to distinguished and SF local Colleagues. The only comment I would make in this regard is a quote from Peter Drucker: "Nobody can predict the future. The idea is to have a good grasp of the present."
Flag Fri Nov 16, 2012
Thank you for the thorough replies Steve and Dino. We can afford about 150K downpayment, which at 20% is how I came up with our purchase price of 750K. Maybe with creative financing we can afford a bit more. We plan to stay a minimum of 4 years however I want to be sure that if we were forced to move again that we could rent the home for more than the mortgage payment... which gets to the heart of my question: Will the homes we can purchase in the 750K (maybe up to 850K) range be significantly better, worse, or similar to homes that would rent for about $4000/month?
Flag Thu Nov 15, 2012
Steve if the $4000 is the rental amount, the numbers you present as purchase price assume that they have 20% down... Unless I missed something in that math..
Flag Thu Nov 15, 2012
Dear Woz Family,

I aggree with Dino, now would be a good time to buy. The area that would most fit your husband's commute would be Mill Valley, Larkspur, Greenbrae and Corte Madera.

The rental market right now is pretty hot, I think $4000 a month would get you into a decent home but not as great as you might think! Check out Craigslist for rentals and I think you will aggree. Also, finding a rental in Southern Marin can take as much work as buying a home. It is extremely competitive with so few homes to rent. Lastly, in The City and Marin, the market is trending up due multiple offers; so why not buy now before it goes up even further?

Good Luck with your decision!
Liz (415) 260-3750
0 votes Thank Flag Link Thu Nov 15, 2012
Hi,
I was born and raised in San Francisco and know the City very well. I currently live in Marin and have young children in the school system. Feel free to contact me to discuss the various cities and price points in Marin as well as neighborhoods in the City. I can also provide you with market date on both area.
0 votes Thank Flag Link Thu Nov 15, 2012
Hello Woz Family,

With the interest rates at 3% - 4% , if you have the money to put 10-20% down, I would say buy a house now! For the price range that you have indicated, many parts of marin can offer you great homes, with excellent schools. We are seeing prices moving up a little each quarter.
It would seem like the banks cannot keep rates this low forever. If you would like some examples of homes in areas that would be good for you and your children, let me know I would be happy to send some current listings.
Paying $4000 for rent is a lot of money to give away with no real benefits.
Dino Wilson, dwilson@apr.com
Alain Pinel Realtors
415-215-2614
0 votes Thank Flag Link Thu Nov 15, 2012
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