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Own Sweet Home Blog

Is DOT-COM Boom Driving Prices in Good School Districts?

March 18th, 2007 9:46 PM

Remember the days of the dotcom? Number of foreign workers coming to the bay area for the prospects of better jobs and lifestyle. Well, as you may find out they may just be fueling the home prices in good school disctricts. Well, you heard it here first!

The young, early to late twenties H1B inflow during the days of dotcom is settling down as their green cards are arriving and they feel confident about purchasing their first home. Most of their kids are of school going age and we are seeing better schools as the primary requirement for home purchase. Even though bay area saw surge of home inventories in past 6-9 months, the inventories in the areas like Cupertino, Fremont Mission District, Warm Springs, Parkmont and Ardenwood-Forest park are have been low. Not only the sales in these area are strong but we are witnessing upward trend in prices of homes in this area. Many of the first time home buyers are also focusing in on the San Ramon area where the schools have achieved outstanding results.

One of the major questions first time home buyers focusing on good schools have is: Should we send our kids to Private Schools or Public Schools? Assuming the output in top-most public schools is comparable to the private schools, it always makes sense to pay a premium for the homes in the good public school areas. The tution money paid towards the private schools can be used towards the homes near good public schools and one can participate in future appreciation of real estate with that extra investment. Well, that said, all you have to pray for is redistricting of school boundaries does not affect your home location. But then again, wouldn't you make investment based on what you know today? Also, remember, teh private schools primarily focus on elementary education and you will still move again for middle and high school.

Call us get free copies of detailed school reports for the neighborhood od your choice.

Posted by Amit Inamdar on March 18th, 2007 9:46 PMPost a Comment (0)

What is so special about Bay Area?

March 15th, 2007 7:53 AM

Bay area real estate has doubled in value historically every 10 yrs. Is it our weather or our population and just the supply of land? It is all that and some more. California is the 7th largest economy in the world (the ranking keeps changing, however we are ranked in the single digit). Majority of the GDP driven by the bay are with population of about 8 million people.

We saw last year, all the news media trying to apply the US housing trends to the bay area, scaring the buyers and sellers alike. What really happened? Many buyers stayed on the sideline and did not buy, many sellers came on the market and waited for the buyers.. This standoff was finally over as the 2007 began. Sideline buyers came out in fears of rising interest rates or the lure of lowered interest rates from June 2006 by almost a full percentage. This translated into multiple offers.. but wait, not necessarily above asking. Properties closed at prices very close to asking or at asking. Good properties went above asking and the bay area came back to life.

So when is the best time to buy? NOW. I say that because you can only make decisions based on what you know today. Tomorrow rates may go up, and a half point increase may reduce your qualification by 10% of the properties you are so picky to choose. Imagine liking something then below your original search price. If the rates drop, just refinance if it makes sense. Just to recap the last two years, when the rates went down, more affordability caused the prices to jump with increased demand. When rates went up from 4.5% to 6.5%, that is approx 40% jump in the rates.. your loan qualification affected by almost the same amount downward..and the home prices did not even move downward by 10%.. So make your decisions today based on what you know today. Its all about your cash flow and price of the home by few perccentage may get washed in the long run. Open doors as the opportunity knocks.

Posted by Amit Inamdar on March 15th, 2007 7:53 AMPost a Comment (1)