"Older" San Ramon vs. "Newer" San Ramon - which is the better investment?

Asked by Nrv, San Ramon, CA Tue Jan 22, 2008

I will be starting a new job in San Ramon and I am interested in living there as well. My price range is 700-850K, and it would be myself, wife and 2 year old son.
In this price range, there is a fairly even split between the older, more established homes in San Ramon (ranch style, 1500-2000 sq. ft, built in the 70's, some having updated interiors, larger yards, lower property tax, and often no HOA) vs, the newer "Windemere/Gale Ranch" homes (often 2 stories, 1700-2500 sq. ft, built in the last 5 years, modern interiors, small yards, higher property tax in Windemere or higher HOA in Gale Ranch, further from highways/shopping). So, both areas have their pros and cons. It seems as if the older homes seem to linger on the market longer than the newer homes, but with all the new development happening in the newer area, my guess is that a newer home will often compete with a brand new home? What is the better investment (appreciation wise) in these two areas and price ranges? Thanks.

Help the community by answering this question:

+ web reference
Web reference:

Answers

25
Jia, Home Buyer, San Ramon, CA
Wed Jan 23, 2008
Dr.primer, there are a few misleading points in your post,
1) Besides Windemere, Shapel is also building lots of new homes in Gale Ranch.
2) While property tax in Gale Ranch is 0.4% lower than Windemere, there is around $130/month HOA fee in most of Gale Ranch homes. No HOA in Windemere.
3) Property tax in Windemere is 1.7% not 1.8%, and 1.7% is on the upper side and different among houses, the tax on the home I am about to purchasing is actually less than 1.7%, somewhere around 1.6%.
4) One chunk of the property tax will be gone after year 2031-2032, then the tax will be back to normal 1.3-1.4% level. It may sound long ahead, but if someone plan to stay for 15-20 years, like I do, the current higher property tax won't affect re-sale much.

I know those facts since I'm also a buyer who is very close to make a deal on a new home in Windemere. I started looking around San Ramon area couple of months ago, which are considered slow months, and here are some real transactions I noticed:
1) A 2004 4-beds 3-baths 2500 sqf on 5500 sqf lot, asking $800K, got three offers, and sold in one week
2) A 2004 5-beds 3-baths 2700 sqf on 6000 sqf shot sale, asking $825K, agent said there are offers very closed to asking price
3) A 1996 5-beds 3-baths 2550 sqf on 4100 sqf lot, asking $830K, sold in one week after open house, we actually bid it for $780K, and they don't counter, 'cause they got offer almost the asking price.
4) A 2004 5-beds 3-baths 2700 sqf on 5000 sqf lot, asking $850K, we want to bid for $815K, the agent said "don't bother"
So I feel buyers are out there if price is right. Many of my friends are actively looking houses in San Ramon, and they all know someone else doing the same thing. Yes, we are in south bay, but in current price, many of us are willing to suffer 1 hour commute to trade for a better house in a top school district. And we are real buyers, not flippers, and all plan to stay there for long time, most of the families have stable double income.
But nobody can tell where the market will go from here, I laugh at "there will be another 10% cut" or "now is best time to buy". You should buy a house based on your needs, and time frame. I will say if you choose to wait, don't just wait for a few months, but rather till the end of the year. Markets are always hotter during summer, and I saw some best deals done during last November and December.

Good luck!
4 votes
Jia, Home Buyer, San Ramon, CA
Wed Jan 23, 2008
Dr.primer, I consulted a few friends who has already moved there, and a coworker who has being there since 1998. Most of us are engineers, have no hard schedules, so can shift our commute time out of rush hour, in that sense, the commute is bearable. For sure for many others, a hour long driving is just too much. But it's all trade offs, if house price drops to certain level, more are willing to take the sacrifice. Even I have pretty much decided now is my time to step in (with two growing kids, and parents or in-laws comes to visit us from time to time, a 2-beds apartment is just too small for us), I don't surprise to see the price to drop another 5% - 10%. But again, no one can really tell what's next.
1 vote
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Tue Jan 22, 2008
I heard the exact same advice from my Agent back 2005, when the house price is at the peak. Since then the price in most area has dropped 5-15%. In San Ramon, one property sold in 2005 for 1.15mil is now listed at 850k and still not buyer. I guess the poor guy who purchased the property at 1.15mil also got the same advise: low interest rate, long term thinking. He must be regret not doing his own research.

I am no RE Agent, make no money whether you buy or no buy. I am also looking for moving to San Ramon. But rather wait 1 more year until the market fall to more reasonable level. Be patient, wait until the price fall back to 2003 level.
1 vote
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Fri Jan 25, 2008
Jia, thanks for your honest opinion. Here is my hotmail address: chyokou@hotmail.com.
0 votes
Jia, Home Buyer, San Ramon, CA
Fri Jan 25, 2008
Just got this new from my friend, conforming loan limits may be increased from current $417,000 to $729,750 by mid-February, http://www.mercurynews.com/ci_8074056?source=most_emailed&am… . Very good for the market!!!
0 votes
Jia, Home Buyer, San Ramon, CA
Fri Jan 25, 2008
Dr.primer, send me an email to thruthefinder at gmail dot com , we can have more discussions off the board.

Nrv, as I said no one can really predict the future, but historical data show, in healthy market, summer always has a price spike, then it cools down during winter time. Just from my first hand information, at current price level, some of my friends are making offers, and a few others start looking seriously, i.e., going there every weekend, but a few who is not in hurry are still sidelined, thinking price may go down a bit by end of the year. The biggest uncertainty right now, IMHO, is how much impact current economic crisis will hit on bay area. So far, we haven't seen any massive lay off, maybe because the wave hasn't rippled through yet, or maybe because companies have being controlling expense pretty tight in recent years, and there aren't much extra work force to cut. But if we are in the wake of "the biggest recession since WWII" as some economists predicted, then house price probably will be the last thing for me to concern about.

Good luck!!
0 votes
Johnny Huang,…, Agent, Walnut Creek, CA
Fri Jan 25, 2008
Again, speculation and forecasting what the real estate market will become should be looked as such. With interest rates dropping and (from what I heard, may drop again) to stimulate the economy, it may bring out more buyers thus raising creating demand. Who really knows? Maybe if Hillary wins the election the economy will be better? or If Romney gets elected, then we are all doomed?

There will always be someone that needs to sell and there will always be someone that needs to buy. Keep in mind, in the market we are at the moment, the buyers have more of a bargaining power due to high inventory. It's a beauty contest and the seller with the best house for the best price will be picked.
0 votes
Nrv, Home Buyer, San Ramon, CA
Fri Jan 25, 2008
It seems like the answers to this question have gotten a bit off track. From the replies thus far, there seem to be equal amounts of pros and cons to property appreciation in older San Ramon vs. newer San Ramon.

So, in my situation, I have up to 1 year to purchase a home in San Ramon. All the signs (at least in my opinion) seem to show that prices will continue to drop by about another 5% this year. Does anyone objectively think that there will be a turnaround this summer, or at least a flat-lining on prices this year in San Ramon, in the 700-850K price range?
0 votes
Julz, , East Bay, Provo, UT
Thu Jan 24, 2008
Hey guys I wouldn't live in Dublin either, working there is enough.
0 votes
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Wed Jan 23, 2008
Jia, will you mind to share some detail about your purchase. Price, builder, sf, lot etc.
0 votes
Jia, Home Buyer, San Ramon, CA
Wed Jan 23, 2008
Julz, I now understand why you got so emotional, you are trying to sell your house. But sorry, reality is reality, market doesn't care if we bash or not. Good luck on your home selling!
0 votes
Jia, Home Buyer, San Ramon, CA
Wed Jan 23, 2008
Dr.primer, the first one you mentioned is actually the first one on my list. I believe it's sold on an foreclosure auction, and bought back by the bank. Then it's put back on market, listed for $793000, and sold in a week. I was so attempted to bid on it, while I was thinking, it went inactive. In couple of weeks, we should know how much it's sold. As for the second one, my family actually went to see the house ourself last weekend, zero upgrade is done, and backyard is a mess. We don't like it at all, even the price looks attractive. For other people, it may be a good deal.

Julz, bashing San Ramon??? what are you talking about!! We are going to sign the contract this Saturday for the new home, that's how people get welcome in that area??!! Luckily Dublin is the place we will never think about moving to.
0 votes
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Wed Jan 23, 2008
Bashing? What is that. We both planning move in to San Ramon as long as the price is reasonable. We had some slight different idea about what is reasonable price.
0 votes
Julz, , East Bay, Provo, UT
Wed Jan 23, 2008
What is a conversation with Dr Primer and Jia? You are both bashing San Ramon and neither of you are accurate. New always sells for more than old even if there is a commute. Stay in the South Bay as we do not want bashers or unhappy people here.
0 votes
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Wed Jan 23, 2008
How about this sold and this for sale property? Aren't they are better deal than those listed by Jia? Around 2500sf well below 800k.

http://www.trulia.com/homes/California/San_Ramon/sold/206605…
http://www.trulia.com/property/1051720095-8401-Tiger-Lily-Dr…
0 votes
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Wed Jan 23, 2008
Hope you can nail down your deal and finally move out of 2 bed apartment into your shiny new house soon. With your growing family crying from more rooms, this shall be your best move. I will probably make the same decision if I were in your situation. Hope your enjoy your new home. If you do no mind, please take a few minutes to types here some feedback after you settle down.

I personally believe the tele-commute will eventually caught on fire. Spending 2 days working from home avoiding the most congested Monday and Friday, it can alleviate a lot of pains.

I appreciate your input, it is much more helpful than others.
0 votes
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Wed Jan 23, 2008
Jia, thx for your input.

If you can get that 2700sf house by 815k, that is really a great deal. I do not believe San Ramon's house will fall much lower than that.

I basically agree what you say. The actual transactions you listed is exactly I have expected. The San Ramon house price shall eventually settle down to:
2000sf -> 700k
2500sf -> 800k
3000sf -> 900k
4000sf -> 1mil

These prices shall apply to most common houses in the area, not just for some good deals. We start to see the some deals coming at my predicted price, but still a lot of over priced listings. I would rather wait until most sellers become more realistic and most listings price fall into this range.

I know a lot of south bayers looking in San Ramon. Yes, this is a nice town, house is new, big and relatively cheap, school is great. The problem is commute. Maybe you do not care, I also think it is still commutable, however, many others do care. That will limit the number of potential buyers. This has to be taken into account. There are buyers out there willing make offer if the price is right. But there are too few listing at right price and buyers are still too few and too leisure. Otherwise you shall not see a listing got 3 offer close to asking price but not over.
0 votes
Johnny Huang,…, Agent, Walnut Creek, CA
Wed Jan 23, 2008
I can give you a list of sold versus listed price in San Ramon, based on your parameters, if you shoot me an email.
0 votes
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Wed Jan 23, 2008
You are right, Nrv. Your assessment may be a little conservative. The price may drop another 10% by end of 2008. Since you are not in a hurry to buy, keep researching and wait.

I use this site to track new property listing and price changes, every day I keep receiving notice e-mail about some property lowering prices.

http://bankownedspecialists.com

Be aware about Windermere properties. This is the area most new homes are built and sold. It carries a much higher property tax: 1.8% vs. 1.2%. That translates to at least 100k more in home price in terms of monthly payment. The properties in that area will not appreciate well comparing with other lower tax bracket areas. If your do like Windermere, make sure you pay 100k less than similar property in other area.
0 votes
Nrv, Home Buyer, San Ramon, CA
Wed Jan 23, 2008
Thanks to all of you who provided answers to my question. I will be starting the job in San Ramon in early March, but I will have up to 1 year to purchase a home through my new company's relocation program. I think it might be best to wait for a few months to see if prices continue to drop.

Basically, I get the impression that in San Ramon prices will probably drop another 5% or so by the end of 2008, with the bottom hitting mid 2009 or so. Do you think that is a fair assessment of the San Ramon housing market?

To Johnny H. - Are the builders/resellers really considering offers 10% below asking price at this time, or is that just an educated guess on your part?
0 votes
Johnny Huang,…, Agent, Walnut Creek, CA
Wed Jan 23, 2008
Dr.Primer-The link you provided goes to a listing service and shows a house listed for $749,950. Is this correct because it did not support your statement.

To NRV:Question is how soon do you start your new job and need to move? How long do you plan on staying in the area for work? The market value is dictated by the buyers. We, as real estate agents, can only supply supporting documents and information on listing at a certain price and give advice on how to market the property. It's what the market can bear.

Right now, in this buyers market, buyers are calling the shots. Back in 2005, sellers still had more bargaining power, but it was changing.

Definately, keep researching. Ask questions in this forum.
0 votes
Matt Irvin, Agent, Walnut Creek, CA
Wed Jan 23, 2008
I think you kinda answered your own question. Who wants stairs, an HOA , small lot. and a commute just to get on the freeway. I think you'll have a broader resale market with a one level rancher in an established subdivision closer to shopping and a shorter commute.
Web Reference:  http://www.mattirvin.com
0 votes
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Wed Jan 23, 2008
How about this one: http://clients.listingalert.net/clientorganizer/organizer/li…

It was listed at 699k 3 mons ago. The pull out of list and put back at 50k less recently. If you can get it at 799k, it will be a OK deal.
0 votes
Johnny Huang,…, Agent, Walnut Creek, CA
Tue Jan 22, 2008
Honestly, if i had a crystal ball, I can tell you the future. However since you need/want to move to San Ramon why not just make an offer on a 4500sqft home at a 10-15% discount? Pros and cons, you will get results in long term thinking versus short term speculation of what's to come.

Get a realtor in the local area, do your homework, find that deal that is a win for you. Besides, interest rates are so low, you can't lose in the long run.
0 votes
Rouriel Noub…, Both Buyer And Seller, San Ramon, CA
Tue Jan 22, 2008
You can get a 3000sf by paying 850K. You better wait another 1 year to make a purchase. The price in San Ramon shall at least drop 10% by year end. It further drops another 10-15% in next 2 more years. By then, you can buy 2500sf to 4000sf.
0 votes
Search Advice
Search
Ask our community a question
Foreclosure in San Ramon Zip Codes

Email me when…

Learn more