My future house location criteria

I still remember when my agent first asked me where is my home target location when I just started searching for a house to buy a couple months ago. My answer was anywhere as long as it is within my price range of 750K to 950K. At that time, I thought as a single person I shouldn’t have to worry about school district. All of my worries were the price and the quality of the house. But after a lot of times spent on searching/researching and visiting open houses, I finally realized that buying house is not just buying a roof over my head to stay instead it is one of the most important investment in my life. House price and quality should not be my only concern.

Below are the main criteria that determined my house searching locations:
(1) Good school district. Good school district and good neighborhood almost always by default go hand in hand. To me, high school will have higher weight than middle and elementary school.
(2) Within 30 minutes of driving distance to my work (Santa Clara). I would like to enjoy my life with less time driving on the road.

After determined my search criteria, I narrowed down to the few areas below:
(1) Cupertino 95014
- One of the top school district in bay area.
- Houses in this area are either in the high side or over my price target range.
(2) South Sunnyvale 94087
- Preferable in area that goes to Homestead High School.
(3) West San Jose 95129 with Cupertino school district
(4) Santa Clara 95051 with Cupertino school district

There are a few other areas that are good however they are either out of my price range or are too far away from my work such as Los Altos, Saratoga, Fremont Mission, Palo Alto.

Old small house in good areas or New big house in not-so-good areas?

After a couple months of research, I finally narrow down the target location of my future home down to a few areas. Location, location and location are all advices I got from seniors and current home owners.

I have gone thru the dilemma time where I was debating with myself whether I should get a new 2500 sq ft single family home in those not-so-good areas or should I get an old 1300 sq ft single family home in those good areas. I believe all home buyers have gone thru this process.

I have decided to buy/invest in those houses that are hard to get in (houses that will get multiple offers and yes it still happens at this time) than buy those houses that easy to get in (houses that stay on markets for months). Those houses that hard to get in are usually those houses that you can sell quick and easy for a better price whenever you need to.

What is actually driving the housing market down? Foreclosure! But it will be rare to find a foreclosure home in those good areas such as Cupertino, Los Altos, or Saratoga. The prices for those good areas are pretty stable so far. And when the housing market is picking up, my prediction is that those houses in good areas will be going up at a faster pace.

What does “good location” mean to me? Good school district, good neighborhood and environment, and also not so far from my work (<30 mins driving).

Visited a few open house this weekend but nothing too excited, maybe next weekend!

Is it good time to buy house now in California bay area?

I have been looking to purchase my first home for months. And I always ask myself that if this is a good time to buy now since the housing market is falling and also the foreclosures rate is climbing. But if you are looking for a house in those area with good school district such as Cupertino, Palo Alto, South Sunnyvale, West San Jose, West Oakwood Santa Clara, the housing market is pretty stable and some area are even climbing. And it will be rare to find a foreclosure homes in good area.

Here are the reasons that I believe it is a good time to buy now:
(1) Inflation
With the high inflation rate happening right now in United States, all the cost of materials to build a house is also actually rising sharply. After the market digested the foreclosure homes, any new construction will have to increase the selling price to compensate the higher cost.

(2) Interest Rate
It is pretty rare to have both low housing price and low interest rate happened at the same time. Recently market is expecting the Federal Reserve to raise interest rate to ease the risk of high inflation. There are a few possibilities for the future:
(a) Both housing price and interest rate drop
- Interest rate is very unlikely to drop further due to inflation.
(b) Housing price drop while interest rate go flat
- Possible. If it happens, it will be bad to buy now.
(c) Housing price drop and interest rate rise
- Possible. If it happens, buying now doesn’t hurt.
(d) Housing price go flat while interest rate rise
- Possible. If it happens, it is a good time to buy now.
(e) Both housing price and interest rate rise
- Possible. If it happens, it is a good time to buy now.

(3) Supply and Demand
To me, California is the best place to live in term of weather, cultural and also job opportunities. There are always more people moving into this area than moving out from this area. The land in bay area especially those areas with good school district are so limited. There is no supply but always with strong demand.

(4) US Currency and Globalization
With the weak US currency, more and more people from other countries will be able to afford a home in California bay area. China boom will also allow more and more Chinese to be able to afford US properties for their US life dream. California bay area is also one of their main choices.

(5) High Tech Jobs Opportunity
There are so many fortune 500 and startup companies in this area. I have been hearing that it will be easier to find a new job on the same street of your current company in bay area than find a new job in the same city in other cities. No matter how bad the job market is, bay area always offer better job opportunities.

No one can really time the market perfectly. To me, it seems to be a right time and I will go for it when I find one that I like. Wish me luck!