Home Buying in San Ramon>Question Details

Windy, Home Buyer in San Ramon, CA

Is this a good time to buy in San Ramon ( if I am buying in an excellent school district)...or wait for

Asked by Windy, San Ramon, CA Tue Sep 16, 2008

prices to drop...considering all the news from Lehman and other financial giants falling out?

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15
Wait another year, save another 20%. You may not realize the implications of the Wall Street news, but it willl affect you. I don't think it is a good time to buy. Good Luck
1 vote Thank Flag Link Wed Sep 17, 2008
Windy

I recently sold my home in Mission Fremont area. I initiated the sales since my wife fell in love with Santorini plan #3 in Windemere.

While preparing to sell the house, I found out the real situation with real estate market (all over the US and the world). How the cheap money create this mess? Thus, I convinced my wife and we are now renting in Fremont(close to the old house). We are going to wait.
This was before wall street implosion. Now, there are more uncertainties. When you see a largest insurance company go bankrupt in matter of one week, you do not want to make a major money decision. You want to play safe. I am betting that the house will go back to 2000(before dot com bust).

My recommendation is you rent Windemere house and purchase a bank owned home when economy is stable. The rent in Windemere is between 2-4K. That seems a lot but compare to price reduction of 10%+ in next two years, it is cheap. This is not my predicton, it is from Schiller Case prediction.

Too many unknowns:
1. How many banks are going under. Washington Mutual tops that list.
2. How the largest insurance corporation, AIG, work under the government shadow? Must unload many
companies at fire sale(no different than banks trying to unload REOs).
3. How many weak insurance companies go under due to having AGI bond or stock in their portfolio?
4. Too weird investment environment. No fund is safe. Russia, emerging market, India, China, Oil, Commodity, the U.S all down. I recently moved my money from emerging to bond fund on my 401K. Still lost 5% in matter of month. Amazing.
5. New players in government in four(4) months. Unproven team.
6. The new lending criteria has removed more than 50% of buyers. That means that demand is reduced a significantly.

I will most likely buy a house in 2010 and I am hoping most of distressed sales are completed and the house price will be back to normal pattern(hopefully up).

I hope you make a decision wisely. Many realtors are trying to state this is the best time. See their responses in 2006 and 2007. That is their job and I do not blame them. Do the research on your own and make your decision. Good luck to you.
Now, I am renting and
1 vote Thank Flag Link Tue Sep 16, 2008
Nothing is "holding it's price" right now. Everything is falling, just at varying rates. I mean seriously, banks are falling by the day, unemployment is ratcheting upwards, and the real estate agents are trying scare you into thinking that if you don't buy now, you'll never own a home. Don't believe them, if you want the best prices keep on waiting, real estate bottoms for months to years before it picks up again.

And no historically based on pure returns, the stock market clobbers real estate as an investment. RE historically appreciates about 1-2% above inflation when you discount the bubble that's currently busting, the market returns 6-8%, and you dont have to pay huge amounts of maintenance and taxes on stocks.
1 vote Thank Flag Link Tue Sep 16, 2008
What I am finding is that many people, irrespective of the financial markets, are looking at the entire picture when deciding to buy. If you are only looking at the investment aspect of buying alone it still may be a good time in some areas (i.e. Brentwood, Discovery Bay, etc..) where you can rent the properties and be close to cash neutral until the homes begin appreciating. It is debatable whether you should consider your residence an investment. Yes, in California homes appreciate to a point where you can get caught up in the value of the home and start mentally "spending" the money while you are still living in the home, but in reality it is where you live. I would encourage you to read "Rich Dad Poor Dad" by Robert Kyosaki. He explains very clearly the difference between the home you live in and the real estate you buy for investment purposes.
Most people that we help are thrilled about finding the place where they will raise their families, or retire, or whatever they choose to do in the home and do not worry to much about the value of the home over the next few years.
So my bottom line is when you find your dream home you should buy and enjoy.
Web Reference: http://eastbaymlsaccess.com
0 votes Thank Flag Link Wed Sep 17, 2008
Addie

I totally understand your point of view. If owning a house that you love was only criteria, the time to buy is anytime including 2005 and 2006 when the price is 20% higher than the current price.

I thought Windy was asking about the timing of purchase of house(considering all news from Lehman....), not about owning a house.

Thanks for advise on diversifying the portfolio.
0 votes Thank Flag Link Wed Sep 17, 2008
George,

I understand all your worries and actually agree with some of your concerns. But for me, I've resigned to the fact that purchasing a home nowadays is a LIFESTYLE CHOICE. I needed a lovely home in a lovely neighborhood so I bought. Will the home value go down next year? Well, such is life but I love the home I bought. The layout and everything works for me and my family. I'd rather live in the home I love now and make it feel like a home instead of constantly worrying that the price will go down. And if you work out the numbers, based on our annual salary, if we rented a similar home, the tax savings we get for at least the next few years, we more than break even if say our home value goes down by a 100k or so. And our current mortgage balance is more than enough to sustain a temporary decline in home value.

Let's put it this way. Everything is so expensive nowadays. So some people will not eat out anymore or cut back on their dining and entertainment expenses. So if you see some people dining in a fancy schmanzy restaurant do you say they shouldn't have done that since they are over paying for food and drinks? It's just cheaper to stay home. Ditto with going on vacation out-of-state or overseas. Those are lifestyle choices. Just as long as people are responsible enough that they earn more than they spend then I feel it is okay for people to make those choices. So for certain people like me, yes it is a great time to buy that house you fall in love with.

BTW, when it comes to investments, you know the rule diversify, diversify, diversify. I hope that emerging market funds you invested in was just a small percentage of your portfolio. If it wasn't, then if you have at least 10 yrs before retirement you shouldn't have xchanged it all in bond funds. You should have let it ride out in the market.

Cheers!
0 votes Thank Flag Link Wed Sep 17, 2008
Yes Slewfoot, but the stock market does not provide you with somewhere to live. If you factor that in, real estate is the better long term investment.

Bernard Gibbons

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Bernard Gibbons, Realtor, e-PRO Certified Internet Specialist
J. Rockcliff Realtors, 15 Railroad Avenue, Danville, CA 94526
Phone (925) 997-1585
bernard@bernardgibbons.com
0 votes Thank Flag Link Tue Sep 16, 2008
Windy,

In Real Estate it’s all about location, location, location. When it comes to San Ramon, California, you are in the right location. Demand for any thing sets the standard for just about any thing you buy. The demand for homes in San Ramon is high in this market, as we are getting multiple offers on homes right now.

There are areas that are still going down in price, but they don’t have the Great Schools that San Ramon has. That’s why the demand is still high in the San Ramon Valley.

None of us have Crystal Balls, but I’ve been in Real Estate Full Time, since 1975, here in Contra Costa County, and believe me, the market always goes back up, and even higher. Just like the stock market. The Bumps in the road, always smooth out, sooner or later.

So if your looking to buy, you couldn’t ask for a better time. Prices are down, the interest rates are Great, and now all you need is your Home.

I’m here to assist you now, if your ready to buy. Lets go house Hunting.

Jerry Flynn
Old West Realty Inc.
Danville, Ca.
925-820-6550
oldwestinc@yahoo.com
http://housebiz.ca
0 votes Thank Flag Link Tue Sep 16, 2008
There is no doubt that the lack of effective crystal balls is a problem.

However ...

I really think that it is more important to have a good lifestyle and live in the home you want in an area you want to live in than to just look at a house as an investment.

Historically, real estate has been a great investment. It will continue to be so. It is just not a short-term investment. Over a period of time, your equity will increase although like the stock market, there will be ups and downs.

Unlike the stock market, real estate provides you with a roof over your head.

Bernard Gibbons

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Bernard Gibbons, Realtor, e-PRO Certified Internet Specialist
J. Rockcliff Realtors, 15 Railroad Avenue, Danville, CA 94526
Phone (925) 997-1585
bernard@bernardgibbons.com
0 votes Thank Flag Link Tue Sep 16, 2008
Windy,

Welcome to San Ramon, today or next year. I live here and my children went to school here. As you say, the schools are awesome!

We don't know what the future holds in terms of home prices. That being said, is this an investment purchase or a lifestyle purchase? Why wait if your children can attend the area's better schools now? Over time, for the last 80 years or so real estate has outperformed the stock market.

If you want to watch the month to month city sales and average prices, may I recommend http://www.besttrivalleyhomes.com/Median_Home_Prices/page_19… (center column) or sign up for the monthly real estate market update by reading this blog http://vickiesellshomes.com/san-ramon-ca-real-estate-%e2%80%… and clicking on the embedded link to receive monthly updates.

Like you, I am a "need to know person". I like data to analyze. Unfortunately there is no crystal ball to look forward into the future. The banking issues continue to unravel. 117 banks are on the watch list. Yet, most certainly, people keep wanting to move to San Ramon for the lifestyle, location and great schools. This demand provides some sort of market support for the price.

If I can be of any further assistance, my cell is (925) 407-7987.

Kindest Regards,
Vickie Nagy
Empire Realty Associates
Licensed in the State of CA
0 votes Thank Flag Link Tue Sep 16, 2008
Windy, we are currently in somewhat uncharted terrirtory when it comes to the housing market. Sure we have had ups and downs, a collapse here and there but never to this extent. Agents will continue to say 1 more year becasue its a very safe answer.

Is it a good time to buy? Yes.. its one of the best times ever in recorded history to buy.
0 votes Thank Flag Link Tue Sep 16, 2008
Well, sellers need to sell, interest rates are low, and the conforming "agency" jumbo of low interest rates on loans up to $729,XXX is ending at the end of the year (your purchase must be closed and recorded by Dec 30). I think it is a good time to buy, especially if you are planning on staying in the house for several years. There are a lot of homes to choose from in San Ramon, and you can't ever time the market. By the time you know, or the media reports that we've hit bottom, we are already 2 months into the recovery and you will have missed it. Get a good agent, (like me!) negotiate for the lowest possible price (easier now because you can honestly find another house if your first choice won't negotiate) and live happily ever after.
0 votes Thank Flag Link Tue Sep 16, 2008
Thanks for your replies :

david : I want to buy because I both need and want. Don't you think that prices in an excellent school dist like windemere and evergreen in San Jose will hold their ground? Or they will not either?

Slewfoot : One more year to see the bottom? They told us that last year... what exactly is the bottom?
0 votes Thank Flag Link Tue Sep 16, 2008
If you need to buy today and have the ability, you should do it. However, it is out of NEED or WANT?

If there is no need, expect more of the same next year...
0 votes Thank Flag Link Tue Sep 16, 2008
Depends on what you want. If you want to buy a house at a small discount from the peak buy now. If you want to buy closer to the bottom, wait a year or so.
0 votes Thank Flag Link Tue Sep 16, 2008
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