Is it time to buy in Fremont?
5 Replies
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Jane Dang from Fremont, California
posted 3 months agoAnish Tolia Investor from Berkeley, California
replied 3 months agoIts never the wrong time to buy a personal residence in the Bay Area. I have bought at all points of the cycle and over 5+ years always come out way ahead. For investment property it may be ok to try and time the cycle a bit. But you want a place to live NOW and nobody knows where the market goes and when.
Jane Dang from Fremont, California
replied 3 months agoThanks Anish for your response. Indeed I am not needed to buy a place to live. I am currently owning a SFH as my primary residence but in a location where school is not that so great. I try to buy in a location where I can save $16k to pay for school and gain some appreciation from the house. So it is more like investing. I am worry if I buy at a wrong time, when price drops a few hundred thousand like 2010 then this buy is not right buy. I don't know if I should buy now or wait?
Marcy Moyer Realtor from Mountain View, California
replied 3 months agoJane the Fremont market is very overheated right now but the reason is quite different than before the last house crash. It is overheated from too many people who have money and jobs. Homes are bought with cash or high down payments. Before the crash homes were bought with no down payments and adjustable loans so the financing started out shaky. I am not saying there won't be ups and downs in the market, there always are, but the chances of people abandoning homes where they have put so much money into them, as compared to 2009/10 when people abandoned homes with nothing invested in them is low. People have more often just held on till things got better supporting the neighborhood values. So if you are in it for the long run, buying in Fremont now could be a good idea. If you have short term plans it is much riskier.
Jane Dang from Fremont, California
replied 3 months agoThanks Marcy, with your definition, how many years are considered long term and how many years are short term?
Appreciate your input
Jane
Anish Tolia Investor from Berkeley, California
replied 3 months ago@Jane Dang If the only reason you want to move is to save $16K/year for a few years, its probably not a great idea to do it. 16K paid as interest equals a $320K loan. So you can add $320K to your mortgage and have the same payment. But your mortgage will be for 30 years and schooling likely will be much less. So over the life of the loan, you end up paying more. Will appreciation make up for the difference? Well it depends. On a $1.5M home, $320K is 21%. At an average 3% per year it would probably get there in 5-7 years but you may see a down cycle in that time as well. If it were me, I wouldnt move just to save 16K. But if you want to live in a different house and different neighborhood for quality of life reasons, its not a really bad decision either.
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