I've linked to a dynamite rent vs buy calculator for you to check out when comparing the options.
While prices have softened quite a bit recently, if you look at the two year trend, values in San Jose as a whole are up.
Inventory of homes available has gone up significantly so there are plenty to choose from. It is a cool buyer's market in San Jose right now.
Aaron Wheeler, President, Oakville Properties
Leave the short sales alone. Buy the bank owned homes. They are in liquidation mode right now due to the shortage of money to lend.
You will be amazed at the prices you can get for these homes. Incredible!
If nothing else... buy land... they aren't making it anymore.
1) with every house that is built, is land becoming more scare?
2) are the building costs of home (and labor) continuing to rise?
3) will you have some equity in a home in two years?
4) if you don't buy, is there a chance your rent will go up?
5) can you refinance a loan rate, but not a purchase price?
Do you wish you bought two years ago, would you have some equity, or are you satisfied with a shoebox full of rent receipts?
Good luck. Yes, the bay area is different, not because of the great amount of traffic, crowdedness, but it is just a great place to live, hence, a lot of people want to live here. They come from all over the world just to live here because of the weather and opportunities, further putting a demand on the housing market.
Well, that all depends on what your 5 year plan is. If you know for sure that you will be moving away in 2 years, depends on where and if you need to sell fast to go. Get my point?
In this market, it tends to take a bit longer to sell. Now 2 years from now, who really can know. But it is always financially more sound to own a residence and put that equity in your account, not someone elses.
I know you said Stanford, but how far south can you move? There are so many great options. Price range?
My hubby works in San Carlos and from Morgan Hill it is a good hr of driving. If you need help let me know.
Take Care and lots of luck.
Why does everybody in the real estate industry keep saying that? It's neither relevant nor true.
Building tall condo towers is equivalent to making more land; San Francisco is small, yet there are 15,000 new housing units planned to be coming on the market in the next 5 years. And in the Bay Area alone, big chunks of land were manufactured in the 20th century (the Marina in San Francisco, built out of the 1906 earthquake rubble; and a huge section of Alameda was created with landfill). I live on land that didn't exist just a few decades ago.
I'm with Norman on this one--now is the time to RENT. Wait out the current crash--if you think prices are incredible now, wait till you see prices in July, 2008, after the slow Winter season finally obliterates this year's sales numbers, a big wave of ARM resets (and forced sales) hits in March of next year, a likely new interest rate drop gets announced by the Fed, and foreclosures turn into REOs.
Furthermore, the 180K (assuming a 20% down) needed to purchase can earn at least 4% per year in tax free municipal bonds, which will earn an additional $14,400 This gives renting a roughly $22,000 advantage over a two year period. As I stated earlier, the real problem is the 2 year time horizon. Sometime in year three we reach break even and the buyer should come out ahead by year four.