Coming late to reply to your question. My personal suggestion is to buy rather than rent; especially since you have the relocating company who will cover all your purchase and selling costs.
I noticed that you mentioned selling cost. Do you have to sell your house somewhere else before you can buy? If so, where is the house located and how is the market there? This might be a factor in determining what you want and can do.
Also, what buying cost? Will they pay points to buy down the rate? We did exactly the same 10 years ago and bought in Marin. Moving from Indiana at the time, the price here in Marin seemed astronomical; but my husbandâ€™s company paid for closing costs and a couple points to buy down the rate. We also did not have to sell our house, so we got to bump another buyer who had a contingent release clause. It was the best investment we had made.
You asked which area might be a nice are to buy, and I have to ask you to consider Marin; where pretty much the whole county is great for families and kids and the housing price will hold.
With a price range of $800K to $1.1M, you should be able to get some nice houses here. We are rated by Forbes as having the best schools for the money http://www.sylviasellsmarin.com/Forbes+Rates+Marin+Schools+B We have great schools, communities, outdoors, parks and recreations, wonderful weather, and all in all, a winning situation for your family.
On top of all, Marin is also a place where the value of your house will hold and have pretty much held. The main reason, other than all the benefits above, is that there is a scarce in land (a lot of protected open space, national shorelines, and such) and because of the proximity to the city (which attracts buyers from the city to here - There is an influx of young families with good incomes that move form the city to here) Supply and Demand dictates that the price will hold or go up.
If you go further north in Marin, the price will be less than Southern Marin and the weather sunnier. So, keep this in mind... Let me know if you need more details.
On the loan, a mortgage broker suggested that people might want to look into splititng the loan to two parts, one first, conforming loan, and the 2nd, a 7 year fix, in her example. Knowing that you might move after 3 years, this could be a good option. With no prepayment penalty, and sounds like you are very dicipline and conservative in your borrowing practice; you will probably use the interesting saving to pay additional against he principal payment, which is also great.
Since you have three children, looking at this strictly from an economical point of view might not be realistic. You want to be in a great school district and you want a nice house. While landlords may not tell you that they are not renting their nice house to a family with 3 kids, I would venture to say that finding a rental that will meet your needs might pose some challenges. I hope you do not take offense to that. I am just pointing out what I think may be an obstacle. If I were you, I'd buy knowing that you may not get all your money back.
Walnut Creek, Lafayette, Orinda have easy access to the freeways, great schools and very popular in terms of resales. With the relocating company covering your actual costs to purchase and sell I think you will do fine.
Lafayette, Moraga, Orinda, and then Walnut Creek are your best bets for schools for your children. The even better part is that all four of those locations are a straight shot from Hwy 24/680 north to Hwy 4. Aside from the brief delays from the Benecia Bridge traffic, you are pretty much going in the opposite direction of all other major traffic. And most importantly property values in these areas hold...
I have served a great number of relo families into brentwood this summer. There are huge homes at great deals. Knowing the market and fellow agents here and walnut creek. This is the time to buy in my opinion with a 3 year return on investment will look quite nice. (the home in just the right neighborhood).
These same goals are on my clients minds who plan to move back to their hometowns!
The relo company will pay a point on the loan, all costs associated with mortgage insurance, taxes, fees etc. They pay all the selling costs here.
Our loan philosophy is take the lowest interest rate (on any type of loan, so far that has been 5 year arms), pay it down at a 15 year rate. Our next move will most likely be to a lower cost of living area and we have the best chance of owning the home outright then.
It looks like Marin may be too far commuting for the job in Concord or Oakland Airport. We have gotten used to being relatively close to work. Hour commutes are not very attractive. What would that be like from Marin?
I sell homes in this area and I can't imagine it plummeting. There are great deals on the market right now, including short sales and foreclosures.
If your relo company is paying purchase and selling costs, I'd go for it.
Also, we will not buy unless we have a 15 year mortgage. We have a life goal that won't be changed due to a relocation. We would buy less house, of superior quality to meet this goal.
I appreciate the input on buying in the right areas. We have both benefited and been burned on this approach. What areas are suggested as "good" areas? I have researched the months of inventory and judge that lower inventory areas are safer areas for a purchase. We are looking at Walnut Creek, Pleasant Hills, Clayton, Lafayette, Alamo, Danville and Martinez. Job is in northern Concord near Hwy 4. Which areas are best? Which areas are we missing? We do have 3 children and always buy in the best school districts for resale value.
Again, the input has been very helpful so far! Keep it coming!
Based on your additional info, I would recommend buying, but limit your potential purchases to motivated sellers in prime areas only.
You got some great and helpful answers. Make sure that you spend time with your tax adviser and real estate/financial investment planner. The analysis of your tax situation and your future plans plus replies you have already received might give you answers you are looking for. It is not just what market will do (of course it is important as well), but what you want to do and where you want to be financially 5, 10 or 20 years from now. Make sure that adviser you are using is not just a financial planner, but someone with background in both, real estate and financial planning. Good luck.
I have found a number of rentals that are over 3000sf, in the 3k-4k/month that would meet our needs.
Our history of relocations (this would be #6) has put us in place for about 2 years. I really think 3 would be a stretch.
Thanks for the input so far!