I had a buyer recently ask me about whether home prices in Fremont and Union City had declined to the point where they could generate positive cash flow right away. Except in rare exceptions, the answer is no. I wanted to at least highlight a scenario for you by looking at recent home sale prices in the Fremont and Union City area:
Example: Non REO property in Union City: 4BR, 2BA home in Union City; 2200 sq. ft, 4500 sq.ft lot, 10 years new: $700K
Assume a 6.6% interest rate on a 30-yr fixed rate, but tack on an additional 0.5% as an investor. Total interest payment = 7.1%.
With a down payment of 20%, the loan balance would be $560K. Multiplying this by the 7.1% rate results in a monthly mortgage payment of $3750.
A glance on Craigslist and HousingMaps to view rental property prices in Union City tells us that a rental property of this size would rent for about $2800/month. (Note that I don’t see a rental home in the same community, so I’m looking at comparables). Net-net, there’s a delta of $950/month on the rent, or about $11K per year. Factoring in property tax of 1.2% would result in another $8.4K, or about $19K per year.
In the event you could get such a property at a 20% discount or more, then certainly the financials get more interesting and rent gets closer towards mortgage payment. But at current price and interest rate levels, as you can see, one would run a cash flow loss on a monthly basis and as an investor, would bet on an increase in home values in the future or a decrease in interest rates to re-finance at more attractive terms.
The City of Fremont First Time Homebuyer Program and CalHFA financing may be able to assist with down payment assistance of up to $67,600 for a Fremont home, provided that you meet certain income levels, which adjust based on the number of people in living in the home.
According to the City’s website, you are eligible if you:
- Have not owned a home in the last three years
- Live or work in Fremont currently, or previously lived in Fremont.
- Meet the income guidelines (see Income chart)
- Are able to secure a mortgage and have good credit
- Are able to attend the mandatory 2 hour First Time Homebuyer Workshop
To see if you are eligible, or for further information, please contact me. I’d be glad to provide you with more information on making your home ownership dream a reality.
Veena Grover | RE/Max Accord, Fremont CA | http://www.FremontHomesTeam.com
The latest test score results for Fremont indicate that the Mission San Jose area schools continue to outperform the rest of the Fremont Unified School District. Although this has rung true for quite some time with Fremont schools (and is reflected in price premiums for Mission homes), the internet provides us with more transparency on this. For example, GreatSchools.net obtains state test scores for each grade, in each subject (e.g., math, English) and then calculates a rating from 1 to 10 for each public school in the state. An overall GreatSchools rating of 10 for a school means that the percentage of students that scored at the “proficient” level (or higher) on the test is in the top 10% in the state. By contrast, a GreatSchools rating of 6 means that the percentage of students that scored “proficient” (or higher) on the test is in the top 50% in the state (but not the top 40%). Note that “proficient” is defined by the state education department, not GreatSchools.
You can see the full report for Fremont schools here. Note that you can get more information like parent reviews (and write your own reviews) for each school. A few highlights worth mentioning are that all high schools (Washington High School, Mission San Jose, Irvington, American High and Kennedy) are essentially the same when it comes to class size (30-33 students). On the API (the test performance), Mission San Jose comes in well ahead of the pack, about 15% ahead of Irvington. Irvington comes out ahead of American and Washington High School by about 5%. American and Washington High School come in 10% higher than Kennedy High School.
Note that this information does not necessarily mean that the highest scoring schools are “better”, as this does not factor in parent feedback, school activities, or teacher quality. Instead, its simply a quantifiable way of seeing test scores, which is just one way of assessing a school.
