Home Buying in Dublin>Question Details

Vayu, Home Buyer in Fremont, CA

Is it good time to buy home in Dublin,CA?

Asked by Vayu, Fremont, CA Wed Sep 19, 2012

I'm looking around Dublin,San Ramon and Danville to buy a home. My budget is 600k to 700k. We went to Positano area and many new homes are coming up and each builder (Brookefield homes Windwood and Calarosa) are saying they've waiting list and every time they are anouncing a new phase price is at least increased by 10k. A home which was sold for 680k 3months back is now selling for 720k. Are they really appreciating so fast? 40k within 3months in this market is a very good return. It's known that San Ramon and Danville schools are great but Dublin schools are good but not great. I'm surprised to see the home prices going up very fast. Is buying a home in that community a good investment?

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13
Enjoylife’s answer
Hey there,

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.
0 votes Thank Flag Link Mon Oct 1, 2012
BEST ANSWER
Reality is, the market is pounding upwards. Some builders had their product priced a bit under the market to sell in the declining market – now that the market has turned around, sellers are recouping their losses. According to a report on KCBS a couple of days ago, Bay Area prices have increased, on average, 11% in the past 12 months. An increase from $680,000 to $720,000 is an increase of 5.88% - not out of character with what is happening in the market as a whole.

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 – 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 it’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. I’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.
1 vote Thank Flag Link Wed Sep 19, 2012
Hi Vayu, if you are looking for an investment property, as Carl also suggests, I would stay away from a new Builder home you will be paying a premium for. Furthermore, I believe a 2-3 year timeline for holding the property is WAY too short for a 40-50% ROI. In addition, if you are set on a new home purchase I would recommend you review "Why You Do Need a Realtor® When Buying From a Builder" http://docs.Steven-Anthony.com/BuilderRealtorAgent.pdf
-Steve
Flag Fri Sep 21, 2012
I'm mainly looking as an investment want to sell that in another 2 to 3 years and expecting ROI 40 to 50% not sure if that's unrealistic. But having seen Bay area prices, that's not unreal. I also have a 3 year old kid who'll be going to school in 2014, elementary school in Dublin anyways is good. Reason I'm not considering existing home the floor plans and ROI. New home floor plans are awesome and also considering huge land available in Dublin, and more homes coming down the road does anyone consider 10 or 15 year old home?
Flag Wed Sep 19, 2012
I have sold two homes this month. One, a single family dwelling at $30K above market. Another, a townhome, at $24K above market.
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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.

John Ledahl
Alain Pinel
0 votes Thank Flag Link Thu Sep 27, 2012
Also take into consideration that Dublin High is 5 miles from East Dublin and you are more than likely taking Dublin blvd which doesn't sync the traffic signals like Pleasanton.
0 votes Thank Flag Link Mon Sep 24, 2012
Hi Vayu,

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.

Best Regards,

Mona
925-831-9615
0 votes Thank Flag Link Mon Sep 24, 2012
All I know is there is a lot of building in the pipeline.
0 votes Thank Flag Link Fri Sep 21, 2012
Brett Anderson:

Does this mean you can buy later may be after 2 years in Dublin for the same price as now?

Does this mean home may not appreciate in another 2years?
0 votes Thank Flag Link Thu Sep 20, 2012
Those home builders are trying to raise prices like they did back in the boom. Truth is there are going to be a flood of new homes in East Dublin in the next ten years.
0 votes Thank Flag Link Wed Sep 19, 2012
Hi Vayu,

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
Cell: 510-579-5211
Web Reference: http://www.loantab.com
0 votes Thank Flag Link Wed Sep 19, 2012
In Dublin most of the builders are selling out fast and they are able to increase pricing because for the last few years, not a lot of homes were being built and demand was low. With rates staying low and more people feeling comfortable with the economy here in the Tri Valley, people who were waiting for the past few years are coming back to buy and adding more pressure than normal on housing. In the past the demand was low and the pricing dropped, now that the economy is turning we are seeing the demand rise, but the inventory remains low because the demand has just really started for about the past year.
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.

Thanks,
Moxley Team
MoxleyTeam.com
Web Reference: http://www.moxleyteam.com
0 votes Thank Flag Link Wed Sep 19, 2012
The supply of resale homes and new housing is limited in the Tri-Valley area. This has been a consistent trend for the last year. The price trend at Positano and other new housing builders is based on this supply and demand situation. The builders are simply in much greater control of how and when they build and release inventory.

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.
0 votes Thank Flag Link Wed Sep 19, 2012
The market has definitely improved And I disagree with Jim, I think the rates are great right now and wouldn't wait too much longer. It's an investment as well as a home.
0 votes Thank Flag Link Wed Sep 19, 2012
I would wait awhile, at least until interest rates go back to normal. Doing it now would only save about $750,000 over 30 years.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Wed Sep 19, 2012
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