Interesting discussion, but maybe you should start a new thread. Honestly, I think Monica has already made up her mind to buy. Likewise, I think you should buy too.
To simplify things, ask yourself two questions:
1. Do you want to be a renter for the rest of your life? That's a HUGE amount of wasted money.
2. If not, then can you think of a better time to buy than during this downturn? When do you think will be a better time to become a homeowner? 5 years from now? 10 years from now?
I am honestly trying to give you good advice. None of us realtors on this thread have much to gain by adding yet another buyer. Like I suggested below, all of the realtors in this thread probably already have an oversupply of buyers and there is already not enough supply of listings to meet the demand of all our buyers.
I actually got a listing from someone who had the same doubts about home ownership as you. So actually it's the opposite of what you were probably thinking. I'm actually hurting my own chances by letting other people know how great home ownership is. It would actually help me if I told all the homeowners out there that they should sell and become renters again.
However, you should temporarily rent if:
1. You are not sure of your job. Not sure your next job will likely be in the Bay Area.
2. Not sure you want to stay in the Bay Area and if you move, not sure you want to keep the property and become a landlord.
To get more people's input, maybe you should start a new thread for a rent vs buy discussion.
New York Times Rent vs. Buy Calculator can also help with a general analysis.
Thank you for the kind offer, but I am not currently in the buying, selling, or renting markets. The analysis I provided did show buying was preferable to renting after 15 years.
The questions for Monica to help her make a decision:
1) Whether she and her family are going to commit 15 years (at a minimum, based on the assumptions provided) to a house in Sunnyvale?
2) Whether she and her family mind paying half a million dollars premium over the 1995 price in real terms?
3) Whether a house in Sunnyvale is the best investment vehicle for the $200,000 she would be using as a down payment?
The answer to these questions, may all be "yes." They may be "no." There are, of course, other important questions.
If you'd like a rent vs. buy analysis, I'd be happy to meet with you and we can input different assumptions together and see how it affects your decision.
If you are already beyond that point, then we could discuss which school districts to target and what style of Eichler you like. Different parts of Sunnyvale have different styles of Eichlers.
Similar offer to you. Let's meet so you can put your rent vs. buy spreadsheet up on the screen and we can change the assumptions to get a wide range of probable outcomes. I will show you that no matter what assumptions you put, after a certain time period elapses, buying beats renting and the lead for buying increase more and more each year. That's what I mean when I say in the LONG term buying beats renting.
Robert (408) 893-2410
There is never a bad time to buy if you are getting a good deal. But, make sure you are getting a good deal. The example I provided is simply raw data that should go into you decision making process.
I have to disagree with your characterization of "buying" and "renting." You make buying sound like there are no cons and make renting sound like there are no pros. You also imply that buyers are long term thinkers (good connotation) and renters are short term thinkers (bad connotation). Both owning and renting have pros and cons.
In my opinion, a good agent should begin with an analysis of what is best for their principle. That would be helping them determine whether buying or renting is right for them.
As to the market as a whole, I'd say historically low interest rates (allowing people to borrow more, a factor keeping housing prices up), suspension of mark to market accounting rules (allowing banks to keep reposessed assets on their books at higher than market value), and an ever increasing shadow inventory (suppression of supply on the market), are signs of an unhealthy real estate market.
Bottom line is:
1. If you are a long term thinker, then buy and have peace of mind that your payments will stay constant for up to 30yrs, feel happy instead of sad every time you read about home prices skyrocketing, etc.
2. If you are a short term thinker, then rent and hope your landlord doesn't jack up your rent, next year, 2 yrs from now, 3yrs from now, ... force you to move since he's selling, ... tell you that you can't have pets, etc.
A good agent shouldn't try to convince #2 to become #1. Rather just find the #1's and serve them the best we can.
Right now everyone who is financially capable of buying is already in the #1 category. However, everyone who already owns who doesn't need to sell feels that their home value will continue to increase and/or the rent that they charge will continue to go up. In fact, not only are they NOT selling, they are looking to buy MORE homes.
Lots of buyers. Very few sellers.
Now you could rent just about any house in Sunnyvale for $3600/mth and below. So, using a rent vs buy calculator and making some assumptions: house price increases at 2% per year, rental price increase at 3% per year, a 30 year mortgage with 4.5% interest and that you are putting 20% down (approximately $200,000), it would be better to buy this house at this price after 15 years. So, how long do you plan on living in such a home?
This is all public information. Alas, what you get from most real estate persons is "tell me about your budget." Hope you find the information useful. Be wise with your money and play it safe.
You can find Eichlers in several good school neighborhoods of Sunnyvale, e.g. Cumberland Elementary, Stocklmeir Elementary. Currently, there's an Eichler for sale in the Stocklmeir Elementary / Ortega Park neighborhood at 1461 Firebird Way. and one in the Cumberland Elementary neighborhood at 601 West Remington Drive.
Let me know if you want to see either of these.