Long term or short term? What's a good strategy for today's market?

Asked by Joon, 95132 Sat Aug 25, 2007

I'm looking for homes in North San Jose, and I'm trying to figure out if I should look for a short term home (five to seven years) or a long term home (twelve to fifteen years). Short term would mean I find a place for convenience (close to shops and freeways) then move to an area with good schools when the kids hit elementary age. Long term means I would sacrifice a bit of convenience to settle in an area with better schools (like Berryessa). With the housing market being what it is today, I've found it difficult to decide which direction to go. I feel the long term strategy to be "safer" in case I can't afford a new place in seven years, but I'm not sure if that concern is warranted. Any thoughts?

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Denise Stuart, Agent, San Jose, CA
Thu Aug 30, 2007
This is right up my alley :-)
I am a Realtor in Berryessa, I have 4 kid in the district here and was PTA President for the distinguished school and have also been Girl scout Troop Leader in Berryessa. This community is a wonderful place to raise kids, lots of new development coming up also. I think at this point I would look long term on buying a property, but I never advise my clients to buy unless it is just that perfect home, and the slow down of the Real estate market has given all my clients the chance to slow down and choose the house they want with multiple great home out there at once, that didn't happen before. When the market was hot it was more like the train that didn't slow down at the train station :-) (Jump on or lose out)
Good Luck
Hope this helps
Denise Stuart
Coldwell Banker
The Real Estate People
1 vote
Mario Pinedo,…, Agent, Cupertino, CA
Wed Aug 29, 2007
Property taxes (Prop 13) are another important factor to consider. Over 10 years houses in North Valley may double in price. If you buy Berryessa now, you will be paying half in property taxes as if you traded up to buy there in a decade. Then you can have a nice smile on your face as you greet your new neighbors just moving into the neighborhood!
1 vote
Bruce Lynn, Agent, Coppell, TX
Sun Aug 26, 2007
What are your employment outlooks? Will you be in the same place in 5-10 years? Will your income change at all? Also do the schools change at all? If you are for example a teacher and expect to remain in the same school system all those years, I'd purchase for the long term. While your salary may go up it will be more likely a steady progression tied to inflation. If you are a junior manager and expect in 5 years to move up the pay scale to senior position with perhaps double the income you may want to purchase for the short term. Any chance for your work to go away or change significantly?
1 vote
Ruth and Per…, Agent, Los Gatos, CA
Thu Jan 13, 2011
Hi Joon

You should consider Long term as all Interest Rates, Property Prices and Property
Taxes rise.

North San Jose is a great place, great time to buy, there are some excellent
Buys out there.

The valley has always found a new way to reinvent itself out of every recession, bigger and stronger.
Also companies in silicon valley are doing just fine, look at the stock on the companies with
Buildings close to North San Jose, they are all on the up.

Good luck.
Web Reference:  http://www.ruthandperry.com
0 votes
Michael C. A…, Agent, Santa Clara, CA
Wed Jan 12, 2011
It all depends on your family situation - I assume you have children in school that is why you mention status of school. You also need to consider our economy, we are still struggling in regards to unemployment and hopefully we are gearing up for improvement. Housing trend is a cycle, that is what we know but to predict if we will see another housing boom in the near future, that will be impossible.

I suggest you buy the property that you really want. The property that you can afford, buy the property that will benefit you and your family in the long run. We don't know what will happen, 3 yrs, 5yrs or 10yrs from now, but what we know now is that you are buying a home at lower price and with a lower interest rate.. so go ahead and decide and don't think twice, coz if you do you might have missed another opportunity and might affect your long term and short term goal... good luck on home searching!!!
0 votes
#1, , San Francisco Bay Area
Wed Aug 29, 2007
You really need to expand your mind and thoughts a little bit. A little out of the box thinking. The US is not the only place to look for investments. Europe has some areas that are on fire right now. Poland, Estonia, Latvia, Ireland. http://www.viviun.com is a good place to start. Email me if you need more info on Europe real estate. My retirement is there now.
0 votes
Sylvia Barry,…, Agent, Marin, CA
Sat Aug 25, 2007
Hi Joan:

From your two scenarios, I will definitely go with the long term plan you have there. Your short term plan limits your purchase to a place for convenience only, but does not sound like it will afford you a good location with good schools.

For appreciation purposes, of course, you always hear location, location, location, and that's where I will buy; especially since you said you will sacrifice 'a bit of' convenience;; so you are not talking about a big sacrifice for 5-7 years, but some.

Maybe what you want to do and if you don't mind doing it is to buy a house with good bones, nice floor plan, probably needs some updating, which maybe you can do because it sounds like you are young and may have the energy and time to do so, and go from there. Maybe even a house with potential of expansion.

Then in 7 years, you may have a house that's been updated to your liking or you will have good appreciation on your house, which will allow you to move up.

0 votes
Michelle Car…, Agent, Coppertino, AL
Sat Aug 25, 2007
RE is a long-term investment, although many have made lots of money in the short term. *Safest* strategy is to buy where other people want to buy: if you pay for great schools now, guess what, people will likely still be paying for them 7-10 years from now and YOU will have gotten that extra appreciation on your investment. An agent who specializes in the areas you're looking in can help you compare appreciation rates over the terms you mentioned, altho keep in mind MLS data over 10 years is not accessible.
0 votes
realpayam.com, , Los Altos, CA
Sat Aug 25, 2007
Most of my clients prefer buying wherever they believe is the best location and where they would like to live long term. Because of such factors as appreciation of the property or a raise at work, clients decide to move. So even if your situation changes, buying in what you believe to be the best area is a good idea.
Web Reference:  http://www.realpayam.com
0 votes
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