Am I Friggen Crazy? Should I Move to San Ramon?

[mkregel]

Wifey and I are considering a move from suburban, diverse middle class Fremont to suburban, not as diverse upper middle class San Ramon. Why? Just had a kid and we want top schools (what parent doesn't?), younger families (the home I live in now was built in the 1970's and all my neighbors are retired and their kids are my age.) and a newer home.

The home we're considering is GORGEOUS! Big arse kitchen with an island (always wanted one of those) - but the morgtage is $700K (!?!?!?) Our current home is appraised at around $500K but the morgtage on it is only $300K. (For those of you not in California -0 these are actually typical prices.)

But (financially) we will hurt a little if we choose the brand new home. It would be more payments per month - we could handle it but we would have less disposable income.

And I do like living in a VERY blue area. I mean, Pete Stark is our rep - you can't get much bluer that THAT! San Ramon is soccermomland, and I'm not sure who the rep is - but I would venture to say it's not as enlightened there as it is in Fremont.

One more thing - selling our home would have to wait a little while as the home itself isn't built until December - and selling a home in September or October is tougher.

But the schools...the schools...Baby Nate needs a good education.

Any thoughts - opinions - comments to help us make our decision?

[junker]

1. Real estate market including the mortgage industry is in early melt down

stage. So be advised. Deflation is hitting, markets are starting to pop. Recent investigations into the GSE freddy Mac will seriously impact mortgages. This will progress to the point that rates rise fast. Problem is, you don't want to lock in to new arrangements now as this is the top of the bubble. In just a couple of years that 500k house will be 200 if that. Japan has lost 86.7 per cent of property values since the top of their market. They took 12 years. We will do it in 3 or less as our debt loads are huge. Just advice from an observer of human kind and their follies with monetary policy and fiat currency.

[mkregel]

8. Well as it is we bought the home pre-bubble

so if I buy the $600K home and the market melts, at leaast I'll have a nice house out of it and I can always reasses the property value and pay less tax.

Although...that's why the schools are good. If the prices drop, the schools drop too and the Right Wing dream of good schooling only for the rich will come to fruition.

[Capn Sunshine]

10. That's some pretty scary shit there

Not suportedby any historical evidence, unlessyou think we are Japan, in which case , I have some Tokyo Real Estate too sell you.

The question about values is a legitimate one; I do a lot of my debt underwriting in CA. Same with Freddy. But your 700 k home will decline maybe 5% from the high if there's a downdraft (the market says this isn't likely) and in 5 years will be worth what it is today.

UNLESS Junker is right, then all bets are off.What is being refrred to would trigger WW3. Seriously. We would never allow things to deteriorate to that extent UNLESS we were trying to destroy the middle class. But I have no plans to stop writing mortgages in CA. Demand is still there. There are always what ifs that you have to acknowlege. But the scenario Junker is laying out is comparable to an asteroid stiking us, and slighly more likely, though not by much. It is interesting to examine the attitudes of money, the monetary system, and realize how much of it IS built on faith or preception. We don't want to go there though, its dark and scary,it's got bees and spiders. You'll poke your eye out! Take it from me.

[inthecorneroverhere]

13. I think you may be correct

The California RE market is seriously overdue for a major correction to bring it in line with the rest of the country.

Welcome to DU!!!

[cally]

2. What will the commute be like?

Your kid needs time with both of you much more than a fancy house and neighborhood. Also, I'd be very scared to take on that kind of mortgage in this job climate and with the chance of a housing burst.

Before everyone flames you, houses are absurdly expensive in the SF Bay Area. These prices are not unheard of here. You can drive through what look like working class neighborhoods and the houses cost $500 to $600 thousand. It's absurd.

[mkregel]

6. It'll be a little longer

by about 20 min - but I work 11-8 so I won't be fighting traffic.

[SEAburb]

3. I lived in Union City in 84-85

I thought it was nice place to live. Good access to get around the Bay area.

[mkregel]

7. Don't get me wrong

I love Fremont. It's perfectly positioned in the middle so that a commute to the Tech belt (Sunnyvale, San Jose, Mtn View) is not far, the city is only 30 min away and Berkeley is close by too.

But my house is really small - and the kitchen is like most people's closets. Also, the schools aren't that good past Jr. High and the neigborhood is all retired folks. Nothing wrong with Retired types but I'd love Lil' Baby Nate to have some friends his age to play with nearby.

[Waistdeep]

4. Are the schools really better in San Ramon?

Mission San Jose High School in Fremont is one of the very best in the Bay Area, although if I could choose any school district it would probably be Palo Alto with either Gunn High School or Palo Alto High.

[mkregel]

5. They are

Mission School District is limited to Mission area residents - and we live in the Brookvale area (which would mean American High School.)

Homes in Mission SJ go for $800-$1M (so we're priced out.)

I am worried about the real estate bubble bursting. I've heard speculation that it will stay static for a while, to a slow leak to a full out crash.

Again - I am sick of thinking of my home as an investment. It should be a place to live, period! I could jump on my soap box and rant about how I feel every aspect of the human experience has become capitalized, marketed and repackaged for individual use - but I'll spare you all ;)

[Bossy Monkey]

9. Nate will do fine in whatever school district you live in

'cause you and your wife are intelligent and will take part in his education. Some of my teachers were sub-literate; I wound up in the Ivy League. Don't go to soccermomland. If you can find another diverse neighborhood with better schools than Fremont's, move there. Otherwise, stay put and stay comfortable. (PS, our neighborhood was full of retirees, too. Not to be indelicate, but people die, and new people with kids move in. I think Nate will grow up happier where you're happier, and I don't think having an island in the kitchen will make up for what you're giving up.)

[LibDemAlways]

11. I live in a Southern California

suburb known for its "award winning" schools and astronomical home prices.
A 25 year-old tract house up the street from me just sold for over $730K. When
interest rates begin their inevitable rise, that place will again be worth $400-$500K,
and the guy who got snookered into the inflated price is going to be stuck owing
more than the place is worth. I know the situation is even more out of control up
north, but ultimately what you can afford and what's best for your family should
determine what you do.

As for "top" schools, the area I 'm in is very highly over-rated. The principal is
obsessed with test scores and the teachers basically "teach the test." The kids
are high achievers because their parents are high achievers - not necessarily because
of anything the school is or isn't doing. If you taken an active interest in your child's
education, he'll be fine.

[inthecorneroverhere]

12. $700K mortgage?!?

Pardon me asking, but are there 2 MD's or lawyers or other high incomes in the family? Perhaps a CEO + corporate attorney?

If the family has an income that is not at least 2.5 to 3 times the average U.S. income, that $700K mortgage is extremely expensive.

Cheez, what about staying where you are and finding a good quality parochial or Montessori school? Not all private schools are run by fundies....the Episcopalians run some very superb schools, for a price which someone contemplating a $700K mortgage can probably afford.

The rest of us...well, my family stayed in the same town all while I was growing up and I went to a ca. 45%ile ranked public school. I begged to go to another school.

[mkregel]

14. Hehehehe...welcome to the bay area, California

$700 is acutally not outrageous for a 4br 3ba 2K sq ft home in a new development. Lenders have adjusted their PITI Ratios in California because of the huge home prices to around 38%.

Lemme put it this way - I live in a charming middle class community on a cul-de-sac in a 1.7K sq ft 3br 2ba home built in the early 70's. I paid $318 for it in 1999. It's market value is $490 and 6 months ago it's market value was $520. This is not uncommon. A lot of it is location (Fremont is perhaps the closest thing you can get to a "center of the bay area" without being in a boat.) but alot of it is tulipmania.

I do worry, however, that in a while no one will want tulips.

[inthecorneroverhere]

15. yes it is

2,000 square feet? $700K is outrageous.

I guess cardboard shacks (100 square feet) cost $150K....

[REP]

16. Where I Am

in Mtn Vw, little 2 BR bungalows start at $750,000.