I would be happy to discuss more at one on one consultation at no obligation if you like.
Good luck to you,
Since so many people lost their homes in foreclosures and short sales, their credit scores were lowered and they cannot buy another home so they have to rent for a few years till their credit can be built up again. That is the reason the rents have gone up since the rental demand has been so high..
If you can afford to buy a home, you should go ahead and do so. When property values start to rise, they stay in that direction for several years as has been seen in the real estate cycles. Of course no one can guarantee that they will keep going up, but this is not like the stock market that goes up or down everyday.
Look at the quality of life when you own your own home. You don't have to depend on the landlord for paining the interior, changing carpets, updating the kitchen, baths if needed etc. You also don't have to worry about the landlord raising the rent on you or asking you to vacate.
When you look at selling in five years, it does not seem like it will be a problem since this market is only getting better every day.
Five years is a long time to rent. Even if the condo you buy doesn't go up (which is likely it will) you will still have tax advantages and the chance to build equity. And with the high cost of rent, it might even be cheaper to buy.
There is nothing like owning your own home. Coming home and knowing this home is yours. What a relief not having to worry about your rent being raised again. Only you can answer how important this is to you.
At least begin the process by talking to a lender and get preappoved, he will be able to tell you how much you can afford to spend. Talk to you CPA and see what will be more profitable for you in the next five years buying or renting. Taking these steps will help you make an informed decision for your future.
Going forward, there's still plenty of drivers to push prices up further in Fremont for the next 1-2 years, including the higher rent you've mentioned and falling interest rates. With this trend in place, you'll be able to build up a significant equity buffer in 5 years to protect you from any shocks to the local housing market, which handled this last crash rather well in Fremont.
At the same time, you can save $400-600 a month versus rent (which has attracted plenty of my investor clients to Fremont). Put that away over 5 years and you'd have an extra $30-50K in cash, which would also off-set any drop in prices. So, buying today really makes sense. You just have to know how to compete effectively against all the investors who already think that way and want similar units to what you're looking at.
That said, with property values and interest rates at their lowest levels in many years (interest rates are the lowest in 40 plus years), many are drawn back into the real estate market -- not just for buying their personal residence but also for investment purposes.
If you are non-citizens or non-immigrants, there may be some limitations about purchasing real estate property. So perhaps that's one of the first things you should look into besides getting preapproved for a loan (if you're not paying in cash).
If you don't plan to keep the property and re-sell after 5 years, then you should also factor the cost of selling.