With the current status of your daughter in the Cupertino school district, why not look at all possible options there? This way you can enjoy your home with your family, build equity and take benefit of all the first time homebuyer incentives. Four years is a long ways away and who knows what the future holds! Your vision of a dream home could change to something or somewhere entirely different...The world is your oyster!!
First off let me say that Stephanie has given you excellent advice, I believe thats exactly what you should do. If you do it with a team you can have all your questioned answered, have a much clearer idea of the options available to you and you can then move with speed in the direction that best suited to your needs and wants.
I live, and work at Coldwell Banker, Stevens Creek on Mary Ave in Cupertino, my kids go to school here, will be happy to sit down and discuss the full probabilities of each choice, and help you reach the decision that is Best for you and your family.
I also work as a Public Safety Commissioner with the City of Cupertino, and have solid testimonials/references I can provide you with.
Call me 408-7773823, lets talk Real Estate, happy to take exceptional care of you.
When considering buying you have to consider opportunity costs. What else are you doing with your money? Can you benefit from the Interest write off you would get with buying a home as opposed to renting? How does what you are paying in rent compare with what your mortgage would be if you buy? Where do you have your money now, is it going to beat out inflation in the comming years?
Definitely a lot to consider. Buying a home in Cupertino would be a more solid investment than buying in Gilroy right now. In 4 years you have a better chance of making a return on your investment than in Gilroy.
I'd love to hear the details of your dream home in Gilroy! I work and live in the south county area and know first hand that there are amazing homes at very attractive prices. I agree with Erica that buying now with the current real estate prices and interest rates makes sense. Who knows what will happen to prices and interest rates in four years?
Intero Real Estate Services
First off, I would not buy in Gilroy for future use in 4 years. You may never move there.
If your window for staying in Cupertino is 4 years or less, then its a toss up. I'm not sure that the market will rebound and go up enough to substantiate a purchase now. If you bought today at 650K with 20% down, your loan payments would be around $2,872 per month, add in and additional 650 per month in property taxes and your monthly is now $3522 per month. Assuming your tax bracket is 25%, your after tax expense for the condo is $2,640. per month (not including your down payment).
What would it cost you to rent a place within the Monta Vista school boundaries? What lifestyle benefits may you have from owning versus renting (if any)? If you left the area after 4 years would you sell or keep the condo and rent it out? (might make better sense if you held it for a longer time).
I hope my questions make you think a little deeper into your motivation for buying.
I would say that buying a home that you plan to sell in a short time is probably unwise. I did this last year, we bought land for $150,000 in 2006, and then we sold it (the market declined) but we still received $150,000 purchase price (we had excellent realtors). However, took a $33,000 capital loss on the purchase. We are actually very lucky, because very few people bought in 2006 and sold in 2008 and did not lose money. So we're very lucky and still lost all of our down payment on that land ($16K) and the closing costs w/realtor fees (another $17K).
I would buy something you could keep and be happy about keeping. If you are drawn to Gilroy, I like the idea of buying and keeping it but renting it. Buying now with interest rates hitting the 4%s is very tempting. And you can find SO much inventory in Gilroy!!! It is pretty amazing. And sadly, the number of people who cannot afford to keep their home may keep rentals steady. You would have to plan for vacancy months each year though, in your "forecasting" because job scarcity could offset the demand for rentals.