Would you rather buy a home in Fremont with good schools at a premium or buy in Union City and send kids to private?

Asked by Anand, Milpitas, CA Wed Aug 28, 2013

I am sure this has been discussed to death somewhere, but I am asking this again. If there is a prior thread with this topic just let me know.
We are looking at 4bd room single family home with preferably a bed room at bottom floor. We are looking around Ardenwood or even Warwick elementary. But clearly the houses in that area are more expensive than say in Union City. I have an option of buying in Union City and sending my 5 year old to a private school which is reasonably priced (around 850/month). I have done lots of analysis/paralysis about this. But how would you look at this? At what price point does it make sense to buy in Union City. We are looking at staying in that home for at least 10 more years.
Just to take an example, I think I can get a NICE 4 bd room house in Union City for around 730k and send kiddo to that private school till middle school. And these houses are in the neighborhood off of Lowry. So not much different from most Ardenwood homes. Or the option is waiting

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shiu227, Home Buyer, Hayward, CA
Mon Sep 30, 2013
Home prices are close to peak 2007 levels and some sellers are actually listing their homes over peak levels. In 7 to 8 years, your home could be worth $200,000 less if there is a stock market crash or national debt issues come in or Chinese housing bubble finally burst. Don't forget commission will eat up any profits.

Banks still have many foreclosed homes in their holdings. Flippers will gladly sell you their houses for high price now.
1 vote
It is good comment! It is likely to be happened.
Flag Sun Nov 3, 2013
Steven Ornel…, Agent, Fremont, CA
Wed Aug 28, 2013
Hi Anand,

I believe you will find it is more beneficial to pay more for a home in a good school district as opposed to paying for private school.

"I have done lots of analysis/paralysis about this. But how would you look at this?"

You are basically analyzing how to best spend $850/Mo or $10.2k/year!

Some other key observations:
1) Private school tuition is not fixed year over year and can increase.
2) Mortgage interest provides a reducing tax deduction benefit each year.
3) You have a 10-year ownership timeline.
4) There is a correlation between a School's API and housing value.

Now, plain and simple, if I'm going to spend an extra $850 per month it sure seems more beneficial to have a portion of these expended funds provide me with a tax deduction (instead of the possibility tuition increases) over the course of my ownership period.

So, the questions you must answer are:

A) If I add $850 more to my mortgage payment what is the maximum priced home I could buy,
B) What school attendance areas are we now open to by doing so,
C) What are the API's of the Elementary and Middle schools, and
D) What City will likely provide me the best ROI once it comes time to sell?

Quick tip #1:
Regarding B & C above, check out http://www.SchoolAndHousing.com
Based on property address, this site provides attendance area schools (Public, Private and Daycares) along with useful statistics and other information you should appreciate.

Quick tip #2:
One strategy you can employ regarding school selection is "API Trending"; however, it's certainly not a science and has more risk because you are trying to time the "API Market" so to speak (still better odds than the lottery). Basically, you are reviewing the API trend of a school looking for its API Score trajectory to help make a decision on where to buy. Personally, I prefer making decisions based on known quantities. Here’s an example chart: http://tinyurl.com/pwa7rq9

1 vote
Austin Oney, Agent, Fremont, CA
Mon Dec 1, 2014
Great question Anand. Overall, you'll get a lower cost per sq ft in Union City. However, one thing to consider is that Delaine Easton Elementary in Union City is very compare to Warwick Elementary in school performance (896 vs 907 API). Delaine is newer, build post 2000 and has very active PTA.

I have had a number of clients with young children in the same position purchase a home assigned to a great elementary school (and not so great middle and and high school). Then when their child gets to middle school age they take the equity and move up in house. One of my clients recently executed this exact plan and moved to Brookvale in Fremont.

Union City homes in the neighborhood around Cambridge Way would an area you may want to consider. The homes were build around 1997, some have a full bed and bath downstairs, and they are assigned to Delaine Easton Ele.

Unlike in most of Fremont, it's possible to do an inter district transfer in Union City if you want to buy off of Lowry and send your child to Delaine.

Another thing to consider is when you purchase a home in Ardenwood you child is not guaranteed to get into Forest Park, Ardenwood, or Warwick Elementary due to the overcrowding.
0 votes
Anand, , Milpitas, CA
Wed Aug 28, 2013
wow, that is a great answer Steve!! Thanks a lot. Puts things in perspective. What we are trying to avoid is falling in love with a home. All bets go off in that situation :-).
0 votes
Anand, , Milpitas, CA
Wed Aug 28, 2013
Thanks for the answer. Where I am struggling is if I buy a home for say 730k vs say 870k in Fremont, which one has better chance of appreciating in another 7-8 years. With Union City, it looks quite tough that middle school and High school ratings will change even in next 7-8 years. Looking at all the frenzy of this year, the value of 'good school district' seems to be proven yet again. Looks like bidding on houses in Fremont defies logic as parents get into bidding wars. Also houses in Fremont naturally sell faster than Union City. With all that said, I will get a bigger/better home in Union City.
So you see I am confused :-).
So when you say deals to be had in Union City, what do you consider a value buy? At what price point would you say a 4 bd room house with around 2350-2400 sq ft is a value buy?
0 votes
Brian Ripp, Agent, Fremont, CA
Wed Aug 28, 2013
Yes, homes are more expensive in most areas of Fremont. So you get more for your money in other cities such as Newark, Union City, and Hayward.

Union City has several very nice communities / neighborhoods that I'm sure you'd like and feel safe. ie; Meridian Court (gated complex), areas near Mission Blvd. towards the Fremont border, along Union City Blvd. and Lowry - all very nice.

If your child is already in private school, paying more for less might not seem necessary.
You might sit down and look at all your options with your Broker and discuss each area in more detail.

Good luck,
0 votes
Rishab Jain, , Fremont, CA
Wed Aug 28, 2013
Hi Anand,

Union City is a better choice in my opinion as you may find better deals as well growth in your investment by the time you need to switch your child school.

There are great deals out there, let me know if you would like any listings to start with. My contact information is below.

Jain Rishab
RE/MAX Active Realty.
Short Sale And Foreclosure Resource
4056 Decoto Road
Fremont CA-94555
Phone: (510) 676-4770
0 votes
Sunil Sethi, Agent, Fremont, CA
Wed Aug 28, 2013
If you like the private school, go with the Union City home. The homes off Lowry are associated with Pioneer Elementary, which is also a good alternative option, if you change your mind about the private school. Also with the Union City school there is no guessing which school your child will go to. However with the Ardenwood or Warwick house, you have no certainty which school your child will go to.

-Sunil Sethi
Sunil Sethi Real Estate
Web Reference:  http://www.sunilsethi.com
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