Rent or buy in San Ramon?

[NoMoreSnowForMe]

I think you need specifics on why they say two years is too short.

If the reason is the cost of paying a realtor when you sell, that's not an issue. If the reason is because of mortgage points or some other cost that you pay out and won't recoup in two years, and that wouldn't cover what you will spend in rent over the next two years, then that's worth looking at.

How much would your mortgage be? How much would your rent be? Would you come out ahead by buying and getting back some money? Is losing a little worth it to you so you can have a home where no landlords will be coming in to inspect, or where you can't have the pets you want?

Do your own math, is what I'm saying.

[Ultrarunner]

My military friends moved every 2 to 3 years and always bought... they were lucky or timed it just right as far as their short term buys... did really well... always better than renting... often they sold to another Navy family.

Their luck stopped when they bought their forever home in early 2007.... nice home that lost 50% of it's value... now 7 years later they have regained most of it.

Lucky for them the last home is one they never intend to sell... had the crash happened earlier, it would have been devastating.

[NoMoreSnowForMe]

That is sad. I feel for people who lost money during the crash. But, you aren't saying the OP should expect a crash now, are you?

If a person rents, they definitely will never see that money again. If they buy, there's a chance they may not see the money again, but to my way of thinking, the odds are better that they will at least get their rent money back.

And even if it's just a wash one way or the other, at least you were the king of your castle instead of at the mercy of a landlord.

Let's do some math.

The OP needs to be in a good school district in or around San Ramon. Let's go with San Ramon/Danville. The OP used "kids" plural. So, assume 3 bedrooms.

Rent in San Ramon/Danville for 3 bedrooms appears to be from $2700 - $3500+ for apts and townhomes. Single family homes would be even more.

So, let's take $3,000/month which again, is if the OP doesn't want to live in a SFH. 24 months = $72,000.

If the OP rents a SFH, rents are from $3,000 - $6,000. So, let's go for the middle rent of $4500 x 24 months = $108,000.

I just can't believe the OP wouldn't come out ahead by buying. Especially since the realtor selling fee will be paid for by the employer.

So, those of you who disagree with me, give me some figures that help me understand what I'm not seeing. I'm just really trying to figure out why it makes more sense to rent in this picture. Especially given the fact that that area is a desirable, in-demand area.

[Ultrarunner]

I tend to be overly cautious when it comes to timelines and their unpredictability...

Also the stress of selling when coupled with a long distance move should not be discounted.

The third major factor doesn't should like it is a factor in this case and that is the mortgage.

Inventory has ticked up... according the my tri-valley Realtor friends... in large part because home prices are up/recovered to the level that was thought to be unsustainable just 7 years ago.

30 months ago, I was a very active buyer... it was a sweet spot or buy opportunity because homes in desirable areas of the Bay were selling for below the cost of replacement and rates were rock bottom... which is about where they are now.

Homes I had in contract... unfortunately always in second position... 24 to 30 months ago have appreciated a solid, verifiable 50%... at today's prices I am no longer a buyer.

One of the great equalizers in Real Estate tends to be time... even a not so good buy, will overtime turn around.

Unfortunately, the buyers most likely will not have the option of waiting it out due to the anticipated timeline.

Again... I'm cautious and even more so when it comes to other people's money...

Another consideration is the buyers price range... median priced homes appeal to more buyers... higher end, which the valley also has a lot of have a smaller pool of buyers and often exceed conventional lending limits...

Plenty of million dollar homes in Danville... my brother has sold several this year and the last 2 years have been a sellers market.

[NoMoreSnowForMe]

So, you're saying that you think it's likely that the OP would lose more than $72,000 - $100,000 in two years? So that it would have been cheaper to rent?

I realize the OP may not make oodles of money. I'm just thinking he/she would at least get some of the rent money back that would otherwise simply be out the window. And as far as stress, that's a lot of money. I think I could deal with the stress involved in keeping it. But, that's me.

Even if the prices are tapped out, I don't see a major crash happening. But, that's me.

And what if the OP ends up staying past two years? I haven't even taken into account the possibility of the rent going up substantially in year 2, which the landlord would have the right to do.

Anyway, I see you all are advising caution, having experienced the real estate crash. I just disagree that it will happen again soon. But, that's me.

[Ultrarunner]

I've gone through 3 Bay Area market downturns in my short adult life...

If the OP is looking for a fixed housing expense for two years... renting offers the best chance to make this reality.

If the OP is willing and able to be flexible and roll with the punches... buying is the way to go... I've only rented once and that was enough.

My friends parents are/were moving out of State... they were very optimistic selling in an up market and the prices estimates were amazing... then came the Napa earthquake... they have a red tagged home... are in limbo as to when and how to pay for repairs and even in a best case scenario, it will be a minimum of one year out of their lives and great expense...

If they were renting... they would be settled by now in their new State.

The one thing the OP has... if I understand correctly, is she/he will be reimbursed for brokerage costs on selling... no small thing which depending on the sales price could be anywhere from 30 to 60k... which does make the case strong for buying.

Typical expedited purchase is 30 to 45 days... part of that time is needed for inspections and/or remediation... many relocation purchases on City-Data have fallen into the trap of being rushed to quickly close and things get overlooked.

Owning is not without costs... Insurance, Taxes, possibly all utilities, repairs, maintenance, etc... plus doing all of the above as someone new to the area.

At least the OP is thinking ahead which bodes well in either scenario...

[Westbound2014]

Thanks for the feedback on my dilemma. I'll be looking for a four bedroom SFH. From what I can tell on Zillow, a rental is about 4K in the school zones I'm looking at. The mortgage and taxes for an equivalent house (assuming down payment and equivalent 4BR SFH) is approaching 5K per month. Now when you factor in the tax deductions, I'm looking at about an about an equivalent out of pocket as renting. Understand I'm building some equity as well, but it will be nominal in the early years.

The big wildcard is the duration of my stay. It could be two years, but if we like it and there is an opportunity, it could be much longer. The relocation benefit of brokerage fees on the sale side seems to be an important factor in this analysis.

[Westbound2014]

Thanks for the feedback on my dilemma. I'll be looking for a four bedroom SFH. From what I can tell on Zillow, a rental is about 4K in the school zones I'm looking at. The mortgage and taxes for an equivalent house (assuming down payment and equivalent 4BR SFH) is approaching 5K per month. Now when you factor in the tax deductions, I'm looking at about an about an equivalent out of pocket as renting. Understand I'm building some equity as well, but it will be nominal in the early years.

The big wildcard is the duration of my stay. It could be two years, but if we like it and there is an opportunity, it could be much longer. The relocation benefit of brokerage fees on the sale side seems to be an important factor in this analysis.