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My wife and I are planning to buy our first home in South Bay Area (Sunnyvale, Santa Clara and some parts of San Jose with Cupertino schools). While the inventory is low and many houses are going way over list price with all cash offers, we're still optimistic that something will work out.

We're looking for a 3+B/2+BA house. Our upper limit is 800K, but might be willing to go 850K (lender says easily approved) for something we both absolutely love! Both are employed in Fortune 500 companies and make 100K+ each and have saved enough money for 15% down (with additional emergency funds for about 6 months). We're in our early 30s, credit scores are 780+ each. We prefer single family homes but townhouses are OK too.

We don't have kids yet but planning to have our first in a year or so. We've been looking for houses in good school districts (API 800+) ...not out of immediate need but in terms of resale value and such. Most of the houses here are selling 60K-100K over list and many have been all cash and/or no contingencies offers. Obviously we cannot compete with that.

My questions:
1) If we have a kid in 2014, it'll be 5-6 years or so before he/she needs to attend elementary school. Plan for good school district now or make do with what we get and then plan to move later?
2) If we end up getting a house in a not-so-good school district and when the time comes to move, for some reason, we can't sell this house; how much do private schools cost? For example, if we get a 600K house now and save the difference in mortgage payment for the next 6 years, will it make sense?
3) When something comes up on MLS, most listings don't mention schools and we have to go through this tedious process of finding which school zone the houses belongs to. Is there a website where we can plug-in the address and it gives us the elementary, middle and high school names with API scores? Perhaps someone has compiled a list...
4) Also, how worried should we be about sex offenders in the area. We searched www.meganslaw.ca.gov for some addresses and there were multiple offenders in some places. The website, however, says they might have subsequently moved. There is no sure way to find out I guess. Any thoughts?
5) Should we even consider foreclosures/short sales. Our Realtor said we can look into them but he emphasized more on Active listings. Are there agents who specialize in such properties and should we be contacting them?

EDIT: Now considering All of Santa Clara, Sunnyvale, Campbell and San Jose zip codes: 95117, 95124, 95125, 95128, 95129, 95130, 95133

Member Summary
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Rent or buy in an area with more reasonable prices. Even with a $200k+ HHI, which can really mean $200,001 BEFORE taxes... (more)

RailroadTrack (Apr. 25, 2013 @ 6:23p) |

After reading all responses, we've now adjusted our upper limit to be around 650K...stretching 700K. At this price only ... (more)

iamtheone (Apr. 29, 2013 @ 4:19a) |

Well i guess you learn something new everyday. Why don't they just auction off only the lots?

rufflesinc (Apr. 29, 2013 @ 6:37a) |

What: Homes with 3+B/2+BA in schools districts with API scores of 800+ in South Bay Area

  • @brettdoyle: How much to rent? Similar homes would rent for 2800-3500 depending on location

  • @brettdoyle, @SIS: Isn't it cheaper to rent? Yes, but looking at long term home ownership benefits

  • @niftyone3: Private schools in the bay area are not cheap. Elementary schools are around 8k per year and high schools are around 14k+ per year

  • @neophyte suggested to look at locations where elementary schools are good which would give us 10 years before thinking of relocating

  • On a 800K, 80:10:10 loan, the estimated monthly payment @ assumed 4% interest is 43xx which includes P&I for the loan, hazard insurance and estimated property taxes

  • @brettdoyle, @stanolshefski: Realistic figure is about 5K-5.5K per month including maintenance and repairs

  • @scanchain: Redfin shows the boundary of the school attendance area. Click on the school, then click on "Show Attendance Zone".

  • Also categorized in:

How much can you rent a comparable home for?

brettdoyle said:   How much can you rent a comparable home for?

A comparable home in a good school district would be 2600-3500 per month

For starter, at $800K, you're not going to find too many SFHs (single family homes) that you'll like in the area you're searching; so be prepared to look into TH (townhouses).

Also, you'll get better responses posting your question in forums at Redfin.com (Movoto.com is a good source too though I'm not certain if it has discussion forums).

Typically you should be able to locate school info by typing in an address at each unified school district's website.

For crimes, you might want to check out crimereports.com also!

Good luck!

Your combined income is 100k+ and you buying a 850k home ? somethings not right..

mnsweeps said:   Your combined income is 100k+ and you buying a 850k home ? somethings not right..

It's 100k+, each he said. EDIT: Scratch that, it really is unclear in your OP. I'd like to know too to see what preapproval would be.

OP, I'm in the BA too and what I have found is you won't find a place that has great schools all the way up from K-12. We're looking for the best Elementary schools to get a good foundation going.

lotusgardener said:   OP, I'm in the BA too and what I have found is you won't find a place that has great schools all the way up from K-12.That's rather strange, why is that?

Seems like it would be much cheaper to rent... the monthly payment would probably be over 4k with the mortgage payment, taxes, insurance, and maintenance. You don't need a school district to be good since you don't have kids and since your renting you can just relocate when need be.

It's never a good idea to buy when everyone is rushing in, competing, and offering prices above listing. These people are preferring to buy rather than rent because they are housing speculators assuming the properties will go up in value. There are also a lot of hedge funds overpaying for properties to rent them out using variable rate debt. My guess is they'll get wiped out when interest rates rise and buyers won't be able to afford the inflated prices.

What happens if the wife decides to be a stay at home mom or gets laid off and you lose that second income?

In My area, the elementary and middle schools have great "grades" while high school only 7/10. That is a rather interesting phenomenon. Think about it this way, a score of 7 means there are some student pulling the score higher and lower, hope that your child is pulling the score higher.

Private schools in the bay area are not cheap. Elementary schools are around 8k per year, and high schools are around 14k+ per year.

If you use zillow.com and scroll down on houses in the area, it will show a rating and recommended school for the area.

iamtheone said:   brettdoyle said:   How much can you rent a comparable home for?

A comparable home in a good school district would be 2600-3500 per month

Renting is far cheaper then .

You'd be nuts to pay $860k for these shacks my parents looked at for $6000 when they were built new in the 1960s

Op, what would your mortgage payment be for let's say 850k house factoring in taxes and pmi.

mnsweeps said:   Your combined income is 100k+ and you buying a 850k home ? somethings not right..
Our income is 100K+ each. I edited the OP to reflect this.


brettdoyle said:   What happens if the wife decides to be a stay at home mom or gets laid off and you lose that second income?
Well, we're both highly skilled workers and though the likelihood of getting laid off is there, I'm confident we'll find jobs again! Also, wife is not planning to be stay-at-home mom anytime soon


Niftyone3 said:   Private schools in the bay area are not cheap. Elementary schools are around 8k per year, and high schools are around 14k+ per year.
If you use zillow.com and scroll down on houses in the area, it will show a rating and recommended school for the area.

The problem with sites like zillow/redfin is that they show multiple schools "assigned" to a particular home and we still have to narrow down using school district websites...

SUCKISSTAPLES said:   iamtheone said:   brettdoyle said:   How much can you rent a comparable home for?

A comparable home in a good school district would be 2600-3500 per month

Renting is far cheaper then .

You'd be nuts to pay $860k for these shacks my parents looked at for $6000 when they were built new in the 1960s


Yes, renting might be cheaper, but aren't there long term benefits of home ownership?

SIS, we're talking Cupertino, it's a bubble of all bubbles, but I'm hesitant to call it's burst for the two reasons:
  • It's a heart of Silicon Valley, a lot of new money coming in
  • Demographics - Indian and Chinese families cling to it almost religiously, bidding is merciless and insane


RE here had never really experiences any correction during the last 20 year, just paused at the best.

OP should look for a single family home in the radius of 10-15 miles for 50% of Cupertino's price with a good elementary schools - that would give him about 10 years before thinking of middle school...

BTW - I gave the same advise (in vane) to the multiple people in person, but I look like a fool as prices just keep climbing

In Southern California there are a lot of school districts that participate in what's called "District of Choice", including good ones like Walnut Valley and Oak Park. Check with the districts in your area to see if they participate. This allows anyone to interdistrict transfer in without providing a reason. Child care and employment can also be used for interdistrict transfer, although that is subject to capacity constraints.

You mentioned a Realtor. Isn't sorting out the schools and helping you find the good schools something your Realtor ought to be helping you with??

07pilot4me said:   Op, what would your mortgage payment be for let's say 850k house factoring in taxes and pmi.

When the lender ran the numbers for 800K with a 80:10:10 loan (Piggyback loan without PMI), the monthly payment was $43xx.

jerosen said:   You mentioned a Realtor. Isn't sorting out the schools and helping you find the good schools something your Realtor ought to be helping you with??

I've heard one realtor say they can't talk about things like crime and good schools (that could be a state/local reg. thing). So, you need to give them a list of good schools you want to be in, and know how to check the crime stuff yourself.

iamtheone said:   07pilot4me said:   Op, what would your mortgage payment be for let's say 850k house factoring in taxes and pmi.

When the lender ran the numbers for 800K with a 80:10:10 loan (Piggyback loan without PMI), the monthly payment was $43xx.


So you're basically looking at like $5000 to $5500 a month with insurance, property tax, and maintenance.

And if you ever decide to sell the house, it will cost you $50k in commission assuming it will even sell.

Renting is a much better deal... Sounds like the only buyer in that situation would be a speculator.

Interest rates have been falling down for 30+ years and have created a lot of long held beliefs about unsustainable real estate appreciation.

stanolshefski said:   jerosen said:   You mentioned a Realtor. Isn't sorting out the schools and helping you find the good schools something your Realtor ought to be helping you with??

I've heard one realtor say they can't talk about things like crime and good schools (that could be a state/local reg. thing). So, you need to give them a list of good schools you want to be in, and know how to check the crime stuff yourself.


Our realtor is checking all this stuff too. When the house first comes up on MLS, we get an automated email and it's easier to check the schools ourselves instead of asking him every time. We also go look at open houses first before involving him. Many houses look good in pictures but not so much in person. Once we express interest, he finds out whatever there is to find out.

About crimes and offenders, the realtor says that it depends on the buyer. Some people are bothered by it, some are not. He can find the info we ask but will not comment on what we should do...which is fair i think. My wife and I have established a system where we check schools first and if everything is OK, then check offender list and if no one is there within 1/2 mile, then we go for the open house.

brettdoyle said:   iamtheone said:   07pilot4me said:   Op, what would your mortgage payment be for let's say 850k house factoring in taxes and pmi.

When the lender ran the numbers for 800K with a 80:10:10 loan (Piggyback loan without PMI), the monthly payment was $43xx.

So you're basically looking at like $5000 to $5500 a month with insurance, property tax, and maintenance.
And if you ever decide to sell the house, it will cost you $50k in commission assuming it will even sell.
Renting is a much better deal... Sounds like the only buyer in that situation would be a speculator.
Interest rates have been falling down for 30+ years and have created a lot of long held beliefs about unsustainable real estate appreciation.


Actually, the estimate of 43xx includes P&I with loans (80:10) + hazard insurance + property tax

iamtheone said:   brettdoyle said:   iamtheone said:   07pilot4me said:   Op, what would your mortgage payment be for let's say 850k house factoring in taxes and pmi.

When the lender ran the numbers for 800K with a 80:10:10 loan (Piggyback loan without PMI), the monthly payment was $43xx.

So you're basically looking at like $5000 to $5500 a month with insurance, property tax, and maintenance.
And if you ever decide to sell the house, it will cost you $50k in commission assuming it will even sell.
Renting is a much better deal... Sounds like the only buyer in that situation would be a speculator.
Interest rates have been falling down for 30+ years and have created a lot of long held beliefs about unsustainable real estate appreciation.


Actually, the estimate of 43xx includes P&I with loans (80:10) + hazard insurance + property tax

$5k-$5.5K is still a pretty realistic range when you factor in maintenance and repairs.

2.6-3.5k to rent vs 4.3k monthly payment, not factoring in "tax savings" of course. Sounds like you could "rent" your way to a better school district. Tough to disuage someone from buying Though (I imagine "security" is one of the reasons).

The numbers are there to compare, ultimately your decision though

Edit: greatschools.org or school district website might have the school info you are looking for.

iamtheone said:   SUCKISSTAPLES said:   iamtheone said:   brettdoyle said:   How much can you rent a comparable home for?

A comparable home in a good school district would be 2600-3500 per month

Renting is far cheaper then .

You'd be nuts to pay $860k for these shacks my parents looked at for $6000 when they were built new in the 1960s


Yes, renting might be cheaper, but aren't there long term benefits of home ownership?

Yes and that's why I own more than a dozen rentals in other areas of CA.

The property you are considering makes no sense as an investment unless you are banking on appreciation , which is pure speculation . If you tried renting it out you'd take a loss of thousands each month

As far as a place to live, you'd save thousands each month by renting . Wouldn't it be more prudent to save that money each month for your kids college fund ? You'd save over $100-150k over a 10. Year period

Owning had many more expenses than PITI. You will spend much more on furnishings and upgrading than if you were renting - probably $50-100k over a 10 year period .

So you better be banking on $150-250k appreciation over the next 10 years to compensate

You'd be pretty hard pressed to find any decent SFH in those areas for your price ranges.

There are plenty of locations that are much cheaper than the areas you have listed with 800+ API scores. The easiest way to see them is to go here: http://api.cde.ca.gov/Acnt2012/2012GrthAPICo.aspx?cYear=2011-12&... which lists all of the schools in Santa Clara County with their scores. From the real estate standpoint 800 elementary school in the Bay Area is considered average, only things that are 900+ are considered good. From my experience the best bang for your buck in terms of prices vs. school scores are the more southern areas like Almaden, Cambrian Park, and Cambrian.

Good luck, inventory is extermely low in areas with good schools, and I'm seeing places that couldn't sell 1-2 years ago be relisted, bidded up, and selling for 100K over asking (bubble 2.0).

iamtheone said:   Yes, renting might be cheaper, but aren't there long term benefits of home ownership?

Sure and there are cons of owning. You'll be out 2 grand a month plus your down payment that could be invested. You'll spend a lot of time and money doing yardwork, renovations, and maintenance. You can't easily move like you can renting... you have to find a buyer first and hope the economy is good enough to get the price you need. If you decide to sell you'll pay at least 50K in commissions and fees. And of course it is riskier... if housing prices fall or you have a job loss you could very well end up in foreclosure.

Renting is better option than buying in Cupertino...No doubt about it...

Just for reference , using the 1% rule of thumb , a $800k property should be commanding rents of $8000/month to be considered a good investment

Adding "SF" to title might be more descriptive. (Believe it or not, there are other "Bay Areas" in the country)

Setting aside the rent vs. buy question for the moment.

1) I say just buy right and get it over with. You can't predict the market cycle for real estate. If you are in a good school district you will at least have more downside protection to wait out the storm that will come eventually. (Look at Cupertino and Palo Alto through the last cycle)
2) The private schools we looked at were more like $20k. If they aren't $20k now, they probably will be in about 5 - 6 years. And what if you have multiple kids? It adds up fast.
3) Do your own research. For every house you are interested in, look up their elementary / middle / high school. After maybe 10 - 20 houses, you will start to get a feel on the school district boundaries. By the way your realtor's excuse on not looking up school districts for you sounds like bs. But it's better if you do the work yourself anyways.
4) Meah... these people move too. One can move in next door after you buy. It is a factor but personally it's not a big issue to me, as in I won't pass up a good deal if there is someone registered on say the same block.
5) Nah. First time home buyer it the bay area with only 15% down? If you can buy a foreclosure, it's likely scraps that everybody passed over.

Back to buy vs. rent:

In the peninsula and south bay I have yet to see buy come out ahead of rent. Maybe a couple years ago in the less desirable areas of San Jose you can find something, but I think even that market has moved to rent over buy. On a pure unemotional level, rent is probably better than buy.

The advantage to buy is that you have stability. Once you have kids and they start making friends, you have much less flexibility to be mobile. Are you wiling to put up with the possibility of moving every year, taking into consideration of your kid's circle of friends? The new circle of friends that you will develop?

You can also possibly look at real estate as an inflation hedge. I personally look at my mortgage as shorting the US treasury bonds. With no end in sight for QE (at least until the economy improves) my purchasing power is constantly being eroded. All that fiat money is going to lead to massive inflation. We have already seen it silently in many everyday goods, but partly in real estate prices as well. I personally think real estate is a good hedge to preserve my purchasing power.

Assuming that you want to buy, then buy in a good school district that will take you at least K-8, if not K-12. Good school districts are worth their big premiums. Say you have two kids and you can save $20k per kid in private school tuition per year. That's like $500k in present value (rough math, assume private school tuition inflation as the discount rate). All of a sudden that huge premium in Cupertino / Palo Alto vs. a neighboring town doesn't look that bad anymore. If I have the means to afford the school premium (in your situation, read that as extending leverage to buy beyond $800 - $850k to get into a good school district), I would not hesitate to pay that premium since I am confident that the premium can be recaptured when I eventually sell. You should also take into consideration of the growth trajectory in your incomes.

I personally own in a town with great K-8 scores (950+ api), and respectable 9-12 scores. I figure by high school my kids will be developed to the point where I can evaluate whether the private school tuition is worth it. If they turn out to be top of the class, I will send the to private school. If they are average, then the local high school in the high 800s is fine. It's not monte vista, but it's good enough.

Good luck. You will need it.

Redfin shows the boundary of the school attendance area. Click on the school, then click on "Show Attendance Zone".

Two areas I know of that have good elementary/middle/high schools and with more reasonable housing prices are the San Jose Evergreen and San Jose Almaden areas.

OP, buy as if you have only one income. You don't know when one of you will get laid off (I certainly hope not). Also, factor in expenses for kid/kids. What if you end up having more than one kid and your wife decides to stay home? There're other cities in the area that have great schools. Don't limit yourself to Cupertino. You most likely will end up paying at least 1MM for an SFH in Cupertino. A TH/condo would certainly be cheaper, but HOA could be steep (and it's not deductible).

Consider Mt. View? Farther out--Milpitas, Fremont.


frenchylarue said:   Consider Mt. View? Farther out--Milpitas, Fremont.

Or further east, like San Ramon or Dublin. Better schools out here. Most in the 9-10 range.

For Sunnyvale, a realtor told me no matter what part, 2 of the 3 (elementary, middle, and high) will be good but 1 will be bad. So, if you require 800+ API, not sure it will fit your criteria.

If you are okay with 2 out of 3 schools being good, you can also consider west San Jose near Saratoga border which is bit cheaper than areas you are currently considering. For example, Baker Elementary (904 API), Moreland Middle (850 API), but bad high school Prospect High (775 API). Prospect High is still comparable to Fremont High (766 API) in Sunnyvale which is lumped with the Cupertino high schools. You would have longer time frame to decide if you want to move for better high school for your kids.

Santa Clara/San Jose in Cupertino school area - "more affordable" since don't have Cupertino in address. I think these go to Cupertino High (901 API) which is in the middle of API scores for Fremont Union school district.

Mountain View is more expensive than Sunnyvale.

For Milpitas, there is smell during summer driving thru 880. I think there is a dump near by. Not sure I want to live with that.

Fremont, better school district is Mission, very expensive too. Not familiar with other parts. Realtor told me they redrew school maps several years ago. She preferred Cupertino for more stable school district maps. Longer commute if your job is in south bay.

Cities further out, your commute gets long. Traffic on some roads get really bad. You will have to decide if that is worth it or not.

As for rent vs buy, buy only if you think long term. When I originally bought, mortgage greater than rent. With fixed rate mortgage and refi to lower rates and rents going up, at some point, mortgage same as rent, then at some later point rent was higher than my mortgage. Make sure you have cash flow and emergency cash to weather short term problems.

crazycow said:   For Sunnyvale, a realtor told me no matter what part, 2 of the 3 (elementary, middle, and high) will be good but 1 will be bad. So, if you require 800+ API, not sure it will fit your criteria.

This isn't correct, that realtor needs to look at the school district maps again. An 800+ API is obtainable for all three if you live in the right part of southwest Sunnyvale that includes Homestead and the right elementary/middle from either Sunnvyale or Cupertino school districts. You will pay through the nose for a house in this area though...

Sunnyvale School District
Cherry Chase (955) / Cumberland (947)
Sunnyvale Middle (853)

Cupertino Union School District
Nimitz (866) / West Valley (958)
Cupertino Middle (935)

Galun000 said:   Setting aside the rent vs. buy question for the moment.

1) I say just buy right and get it over with. You can't predict the market cycle for real estate. If you are in a good school district you will at least have more downside protection to wait out the storm that will come eventually. (Look at Cupertino and Palo Alto through the last cycle)
2) The private schools we looked at were more like $20k. If they aren't $20k now, they probably will be in about 5 - 6 years. And what if you have multiple kids? It adds up fast.
3) Do your own research. For every house you are interested in, look up their elementary / middle / high school. After maybe 10 - 20 houses, you will start to get a feel on the school district boundaries. By the way your realtor's excuse on not looking up school districts for you sounds like bs. But it's better if you do the work yourself anyways.
4) Meah... these people move too. One can move in next door after you buy. It is a factor but personally it's not a big issue to me, as in I won't pass up a good deal if there is someone registered on say the same block.
5) Nah. First time home buyer it the bay area with only 15% down? If you can buy a foreclosure, it's likely scraps that everybody passed over.

Back to buy vs. rent:

In the peninsula and south bay I have yet to see buy come out ahead of rent. Maybe a couple years ago in the less desirable areas of San Jose you can find something, but I think even that market has moved to rent over buy. On a pure unemotional level, rent is probably better than buy.

The advantage to buy is that you have stability. Once you have kids and they start making friends, you have much less flexibility to be mobile. Are you wiling to put up with the possibility of moving every year, taking into consideration of your kid's circle of friends? The new circle of friends that you will develop?

You can also possibly look at real estate as an inflation hedge. I personally look at my mortgage as shorting the US treasury bonds. With no end in sight for QE (at least until the economy improves) my purchasing power is constantly being eroded. All that fiat money is going to lead to massive inflation. We have already seen it silently in many everyday goods, but partly in real estate prices as well. I personally think real estate is a good hedge to preserve my purchasing power.

Assuming that you want to buy, then buy in a good school district that will take you at least K-8, if not K-12. Good school districts are worth their big premiums. Say you have two kids and you can save $20k per kid in private school tuition per year. That's like $500k in present value (rough math, assume private school tuition inflation as the discount rate). All of a sudden that huge premium in Cupertino / Palo Alto vs. a neighboring town doesn't look that bad anymore. If I have the means to afford the school premium (in your situation, read that as extending leverage to buy beyond $800 - $850k to get into a good school district), I would not hesitate to pay that premium since I am confident that the premium can be recaptured when I eventually sell. You should also take into consideration of the growth trajectory in your incomes.

I personally own in a town with great K-8 scores (950+ api), and respectable 9-12 scores. I figure by high school my kids will be developed to the point where I can evaluate whether the private school tuition is worth it. If they turn out to be top of the class, I will send the to private school. If they are average, then the local high school in the high 800s is fine. It's not monte vista, but it's good enough.

Good luck. You will need it.


Thanks for talking on both sides of the rent vs. buy argument. After looking at many responses renting seems like the smarter option. Like everyone mentioned, stability is the one thing that buying a house gives. We hate to move every time the rents go up and we find a better deal elsewhere, not to mention, the stuff we have accumulated over the years. It would be nice to have one address on your driver's license for a while and not having to worry about movers and hunting for better rent when lease is up. If only we could find an affordable house...

Skipping 42 Messages...
iamtheone said:   The interesting thing is that these homes are new on lottery basis . One has to show up on the day of the drawing and if you win, then only you get the house. Thoughts?Well i guess you learn something new everyday. Why don't they just auction off only the lots?



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