We bought a home in Positano in May. For us, there will never be a right time pricing wise to buy a home, but to buy a right home that meets our requirement and we can afford. We did a lot of research about east dublin before we pulled the trigger. There might be thousands of new homes planned and built in the upcoming 10 years, but those won't happen all at once, so in any given period of time, the supply will be limited. And for us, the location of Positano/ Dublin Ranch area is perfect, we really liked the area.
From the demand perspective, I can tell you we moved from South Bay to Dublin, our future neighbors moved from San Ramon Windemere, pleasanton, Fremont, San Jose, even Cupertino to Dublin for different reasons. So you see, the demand comes from outside Dublin, and even outside Tri-Valley. We don't see this trend will change any time soon as every family would like to live in a newer home, good school district without spending a fortune. Also, my relative from another country wants to buy a property in the bay area to diversify their fortune, after they visited different places, old and new homes, they liked Calarosa the most. Unfortunately, every phase of Calarosa has been sold out and my relative couldn't get money to the U.S. quickly enough to get to the priority list......so you see, there is a potential demand from oversea for the homes in bay area incl. Dublin as well.
3rd, the $650-$750k range is most popular because that's most family have enough downpayment and can qualify for loan to afford. So builders have seen the demand and there was no reason for them not to take the advantage of it. But at end of the day, it is the market price now for new homes.
If you are not in urgent need of a home, probably you could wait for a while and see if the market will cool down a bit. For us, we desperately needed a home, we were so tired of living in an apartment and the never ending increase on rent, when we saw the lot we wanted was released, we pulled the trigger and have been very happy and excited for our new home.
I have a couple of questions for you.
(1) Are you buying a home or an investment?
They are two totally different things and need to be treated differently as well. A home is a roof over your head â€“ you should buy it based on your specific criteria for living: do you like the neighborhood? Schools? Commute? Amenities? Etc. If you choose a home that fits your criteria and you maintain it well, you can be assured that, when itâ€™s time to sell, others with the same criteria will buy it. If the market has increased during that time you own it, then you will be able to sell for more than your purchase price. It will be a moot point, because you will turn and use the proceeds to purchase a replacement home. In reality, there will be no profit because the home you will be buying will have increased in value as well.
In contrast, when you buy an investment, you are buying with a specific ROI in mind. If you are applying investment criteria to buying a home, that type of thinking is what got us into our current mess. Iâ€™ve seen SO many make poor choices when buying a home because they are consumed with ROI (Return on Investment) instead of ROH (Roof Over Your Head).
In reality, in any given market, all the boats rise and fall the same. The overall percentage is the same, but the actual dollar amounts vary because of the different price points.
(2) Have you considered resale?
You will normally get more home for your dollar when buying resale. If ROI is going to be your primary criteria, then buy resale, not new.
I just spent 16 years on the Dublin School board. We have invested over $100M in upgrading our high school to world class standards, another $84M for the rest of the schools and have open 5 new schools in the last 8 years. The A/P and engineering programs are flourishing, and the API scores are shooting up. It also has the highest graduation standards around, and we've stolen teachers and prinicipals from districts like Ohlone and Palo Alto.. Try it, you'll like it.
Based on what you're saying I think the question you're asking is if I buy a home for my family in Dublin, will it hold its value? That's the sense I get from your question.
The answer is yes and here's why. I know the area very well and am a local agent in Dublin and San Ramon. As San Ramon is winding down with new homes being built, Dublin is ramping up.
With a half of a dozen builders slated to build several thousand homes the demand to buy new for reasonable prices (for the Bay Area) far exceeds supply, thus the increase in prices you're witnessing are real. In addition, the city of Dublin school rankings are on the rise. The pressure to meet families demands for outstanding educations for their children has put pressure on the city to continue to take measures to reinvest into their school system.
In addition, the tri-valley area in general is attracting more corporations to open shop in the area. PG&E is moving their corporate headquarters here and GE is moving 450 engineers to the area for their new software center. You also have the 200 store Paragon Development going in with over 200 stores and restaurants.
I can site many more reasons for the desireability to live in Dublin and the Tri-Valley area and why it has become the "hot bed" for the east bay. I would like to mention however if the economy tanks, we all go down, some areas more than others. If you're buying a home for your family to enjoy for the long term.....you should be less concerned about the investment formula and focus on if the area meets the needs of your family and offers you the standard of living you're looking for.
I hope you find this information helpful.
Two good reasons for this
Ever so low interest rates.- The 30yrs rates are about 0.50%- 0.75% lower today than what they were early part of this year.
If you do the math on the interest payments over 30yrs for the price bucket you are in (680k-720k), you will see a savings of over 80k in interest payments over 30yrs for a 720K house as compared to a 680k house. So comparatively the 720K house looks cheaper today than a 680k House in monthly payments.
Increase in rents.- If you are currently renting or shopping for a good home to rent, you would have experience increased rents for the same houses as compared to last year. Due to these low interest rates, if you compare the current rents vs the mortgage payments for the similar house, buying a house today seems a much smarter choice even at a little higher price than a few months ago.
Hope that helps
Rohit Mohan, CMPS
Sr. Mortgage Planner
Cal Coast Financial Corp
Good investment? The Tri Valley is a growing area with great schools and near one of the strongest job bases in the entire Nation.
If you have more questions on particular neighborhoods or builders, please let us know.
Thus, it is not surprising to see that the prices at new housing developments are going up based on the lack of supply and "waiting list" demand.
No one can predict where rates and prices will be in a couple of years. However, at this moment interest rates are great and there is a large demand for homes. I don't see this trend changing in the immediate future. The main risk for you is that you wait to buy and then demand stays strong, prices continue to go up and eventually interest rates rise. This may result in pricing you out of the market.
I hope this helps.
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