patrick.net

forgot to mention that this is in San Jose, Silicon Valley.

That's a false choice.
There are lotsa places where the kid will get just as good an education in San Jose as in high-API-The-Fortress without that false choice. Sounds like you are not from this area and don't know enough about it, or you perhaps you are racist. (Please note, not all racists are white). Maybe you don't even understand what it is that the API measures.

This is a no brainer, either buy or rent where she can go to a good public school.

If you buy, it'll cost you $250k more in the good public school district (per your calcs). As long as the area you buy the home in maintains its high API scores, it will always be priced at least at a $250k premium in the future. When your daughter finishes high school, you can sell the house and get all of the $250k premium back, if not more. Then, move to the neighborhood with crappy schools.

If you send your daughter to private school for 13 years, it'll cost you at least $250k (at least--when you account for future private school tuition inflation). You'll never get a single penny of that back.

Now, if you have another child, it'll be 2x a no-brainer since the savings multiply.

I'm sorry, but 230 K combined is not a "very high income" in Silly valley.
Not even "high", actually only slightly above average overall and just average
or even below that in the best areas.

Fisk, your cooment is useless, but thanks anyways. Average HHI in SJ is ~85K.

Sybrib, what are you talking about? Don't follow. Racist? Huh?

Menya says

Fisk, your cooment is useless, but thanks anyways. Average HHI in SJ is ~85K.

OK, a more useful comment would be that I concur with Mark_LA if the choice is limited to the options you listed.

The average HHI in SJ may well be ~85 K. This includes renters, retirees with paid mortgage, people who bought >10 - 15 yrs ago at very different prices, singles on H-1B living with roommates, commuters from Gilroy, illegals working under the table, etc. This number is sure not representative of the
current SFH buyers in the best areas.

Ok, Fisk. You are right. Still, we can afford to live in a nicer hood. The question is should we.

Mark_LA says

This is a no brainer, either buy or rent where she can go to a good public school.
If you buy, it’ll cost you $250k more in the good public school district (per your calcs). As long as the area you buy the home in maintains its high API scores, it will always be priced at least at a $250k premium in the future. When your daughter finishes high school, you can sell the house and get all of the $250k premium back, if not more. Then, move to the neighborhood with crappy schools.
If you send your daughter to private school for 13 years, it’ll cost you at least $250k (at least–when you account for future private school tuition inflation). You’ll never get a single penny of that back.
Now, if you have another child, it’ll be 2x a no-brainer since the savings multiply.

Mark LA, great advice. I'd add to rent anyways. HA ;-)
when it's time to buy you wont have to ask. you'll know it.

If you do not plan to have another kid, rent in a good school district, the really good private schools that are at par with the good public schools in Silly Valley (e.g. Harker) cost more than $12K for grade school, more like $20K. High schools cost $30K.

If you have two kids, buying in a good school district is a no brainer because most likely you are going to make that premium back. Remember, all these parents who buy into the good school districts have very strong incentives to keep their school performance stellar, because that is strongly tied to their kids' career future and their own home value.

Absolutely buy or rent in the good school district. If you buy, your home's value will be less likely to fall than the house in the bad district. Plus, what if you ever decide to have a 2nd kid? Could you afford private school tuition for 2 kids?

SF ace said: In all fairness, 3,500 rent in a good district will not sell for 700K, closer to 900K-1M
Menya, I'm not sure how much time you've got, but you may want to hold out until October of this year. Currently, jumbo conforming loans are set to fall back to $625k (they could get renewed to $729,750, but I wouldn't bet on it given the current political climate). The price range that SF ace highlighted above will take a decent sized hit as the subsidy is withdrawn.

With only 1 child, private rent + school is definitely the better choice, especially in Silicon Valley. Any private school is way better than even the best API score public school. You will understand this, only, after you throw away your money buying a $1M in a high-API fortress area, only to find that you need to send you kids to a private school, anyways. You don't need to pay that much money for a private school, either. You can enroll your kids in a great catholic school for under $10K/year. That would still be better than any public schools, where teachers, faculty are nothing bug bean-counters, only capable of sending out truancy letters, but no understanding of what a good, well rounded education is supposed to be.

Any private school is way better than the best public school? I would beg to differ. Care to share the college enrollment data (particularly at high selective colleges) of these Catholic schools? I asked, because I checked, a total misery, worse than an average public high school. I don't want to spend $15K tuition on a kid so that he can go to Foothill College.

Lots of private schools (eg. the chain schools that I won't name the names) are VERY mediocre. I won't send my kids to any private high schools with a tuition less than $30K, because they are just a rip off for what they offer.

Menya, IMHO and in order of preference, I would consider renting and putting your child in a private school. Or you can rent in a very nice city and put your child in a public school while saving more money. I like the idea of saving more money and having more of a cushion in case something happens (disability, job loss, illness). Life happens. Good luck with your decision. I wish you the best.

My daughter is a senior at one of the toughest and best private high schools in the nation, which is here in Los Angeles. She works hard and gets good grades. She did well on her SAT. But since she is not in the top 5% of her school, she has been rejected in all her UC applications.

So yes, she has gotten a great education. But the system here in California is rigged against the private school kids unless they are great in sports.

If you can get your kid into a good public school, that is the road I would take. The problem here in California is that the drop out rate is somewhere around 50% for the high schools. One has to ask is that the environment that they want for their kids. But, the private schools keep raising their tuition as the public schools get worse.
Good luck. Tough decision

Good post... this is actually an issue to be considered for thousands living in California.

allipak says

My daughter is a senior at one of the toughest and best private high schools in the nation, which is here in Los Angeles. She works hard and gets good grades. She did well on her SAT. But since she is not in the top 5% of her school, she has been rejected in all her UC applications.
So yes, she has gotten a great education. But the system here in California is rigged against the private school kids unless they are great in sports.

Should one then move to Richmond and enroll kid in some MLK high school? Cheap housing and easy top 5% in a free public school.
Would have to spend on bodyguards, though. Assuming $8/hour for 10 hrs. a day and 360 days a year, works out 29 K/year. Comparable to the cost of good private school, but that's a bad deal as we were just told.
So Richmond wins.

allipak,

if your daughter goes to Harvard Westlake or Polytechnic School, I am pretty sure you only need to be the top 25% of the class to get into any Ivy-plus. If I remember correctly, the Polytechnic sends about 1/3 of its class to Ivies. The rest of them shouldn't have a problem securing a seat at UC, not necessarily Berkeley or UCLA, but getting into any UC shouldn't be an issue at all.

We don't have any private schools of the same clout as those in LA, Menlo School or Harker are the best bets in South Bay, and their top college placement is just a hairline better than the best public schools in Palo Alto, Mission San Jose, Cupertino. As for the run-of-the-mill private schools in the Valley (which includes the cheap Catholic schools), their college placement is just laughable. MSJ, Gunn or Monta Vista, consistently send a numbers of students to HYPS each year, and many local private schools can't even manage to send one.

Real story. Moved to the bay area at the height of the tech bubble in 2000 with two school age kids. Decided to rent in a good school district for a couple of years waiting for the tech bubble madness to settle down. Instead the housing bubble starts. Decided to continue renting instead of getting in this rat race. Present rent is $2350 for a 4 + 3, 2000 sq.ft. house. Exact house across the street sold for 1.2 million in 2007. We need this school district only for 4 more years until the younger one finishes high school. We intend to buy a nice home just outside this top school district in about four years. Our present family income is about 230K.

By the way, our public school consistently beats Harker in many of the academic/science/math competitions.

May I ask you people so obsessed with these 30 K+ prep schools and their college placement records something? What are your career/life goals for the kids and their goals that justify this sort of expense/investment? I understand money is not everything, but easier to talk quantitatively in these terms and this site is big on no-BS ROI arguments. Is it an executive position in a bulge-bracket WS bank, McKinsey or BCG level MC outfit, C-suite in Fortune 500, a partner in big law, a supreme court judge, national politics? Incomes of ~300 - 500 K and up? Are those goals realistic with your kids abilities, motivation, and desires? I understand if so, but not otherwise.

I am in hi-tech, making over 100 K before age 40 with great benefits and everyone I work with does about so or a bit more to ~150 - 200 K. None of the dozens of people I know well enough to know that went to any kind of private school before college, and most didn't even go to good or well-known public schools. About half went to HS not in the US (I grew up in a Russian province, went to very basic Soviet school in a factory town, came to the US at age 22 with poor English and no relatives, money, or connections). So did lots of Chinese, Indian, etc. guys I work with. If they could do it, a graduate of an average US high school can. My wife graduated from the most dumbed-down HS possible with GPA of about 3.0 and went to the stupidest party-school state college for BS in nursing. Over 100 K easily (with some overtime).

Over the last 10 years, we actually had just one guy from an exceptionally well-known private day HS interning here. He was not hired on permanently though - too entitled and hard to manage.

I am truly trying to understand (esp. as I now have a small child)

Parents need to realize the best thing for their child is not necessarily the toughest school out there. Just look at what happened to some of the students at Gunn. There were multiple cases of students committing suicide by stepping in front of the caltrain there. Parents are now volunteering to "guard" the tracks around that area to try and thwart further attempts of suicide. While there may be a multitude of reasons that we may never understand, many speculate it was the pressure of expectations from well intentioned parents. We all want the best for our children, and we want them to succeed, but before investing hundreds of thousands of dollars and locking your child into a specific education path, I would suggest really spending some time with your child and find out what kind of personality he/she has. Once you invest in those top school districts, you're signing up your child for intense competition and pressure.

Menya...Invest in YOUR family and homeschool. Forget the treadmill to debt hell. Save your money in a CREDIT UNION ..not a bank and HOMESCHOOL your child. No "Buy Now" propaganda from the school board to keep tax money flowing into the system (Cistern). Most public school districts in California rely on property taxes...which are based on bubble house prices. Pop the bubble and public education gets the pain. You are responsible for your child's education...not the educrats.

Fisk says

I am truly trying to understand (esp. as I now have a small child)

Stick your kid in the worst school in East San Jose & they'll graduate Valedictorian. The problem is that when they actually attend our university system (unlike our K-12 schools, our universities are the best in the world), they'll have trouble keeping up with the rest of the kids there.

Because they're surrounded by kids that perform at less than what they should, they're not challenged to reach a higher level of learning...after all, they're getting A's in their AP Calculus AB class in 12th Grade, so they believe they]re the big dog on campus. They don't find out that they're behind until they attend college and find out other students were taking Ap Calculus BC in the 11th grade....all of a sudden they understand they were just a big fish in the little pond at their low API High School.

@Mark_LA

"If you buy, it’ll cost you $250k more in the good public school district (per your calcs). As long as the area you buy the home in maintains its high API scores, it will always be priced at least at a $250k premium in the future. When your daughter finishes high school, you can sell the house and get all of the $250k premium back, if not more. Then, move to the neighborhood with crappy schools."

Interesting strategy and way of looking at it, with the assumption that the school will make that much of a difference all things equal. I'll take the assumpion for now. In a sense, you are owning/borowing the home for 12 or years to get the benefit of the school. Might be a good idea.

"We all want the best for our children, and we want them to succeed, but before investing hundreds of thousands of dollars and locking your child into a specific education path, I would suggest really spending some time with your child and find out what kind of personality he/she has."

So true in Japan and S. Korea too.

Hi Menya , may I ask what line of work are you and your husband in? $115 K each a year?

I am 23 and want to go back to school.. to earn more

Thanks , lisa

protip: being a good parent is best. There is going to be even more lonely old folks at the home whose kids cannot be bothered to visit just like they couldn't be bothered to get their head out of their career back in the day.

My parents did all this crap for me and my sister, it worked for a time as both of us were honer students. We were also both Mensa, but that kinda had the ill effect of us seeing through the baby boomer spun college is endall and doing what we wanted, rather than what our parents wanted for us. If our parents actually raised us, rather than just sent us off to the 'best' schools without consent, neglecting us to their careers, I think we would have humored them a bit more.

My vote goes for crappy schools if the neighborhood is nice enough otherwise, at least you won't have to worry about too many reckless teens tearing up the roads.

Here is a little advice: You have way less control over children as they grow up than you think. Trying to plan out every detail of a child's 17 years of schooling is ridiculous on it's face. Having raised three PEOPLE to adulthood here are some thoughts:

1) Smart, motivated students will do well in any school environment as they are basically self-taught.

2) Private schools provide two things for the money:
A) Smaller class size
B) Segregation from "others"

Parenting by trying to smooth away every wrinkle in Muffy and Buffy's little lives is simply poor parenting. Eventually, unless you are a Bush, you are gonna have to mix it up with the hoy paloy.

To answer the question, rent the smallest and cheapest apartment you can find at the outer fringe of the public school district of your choice and save your money so you can have some fun in twenty years when the kid(s) are gone.

Parenting by consta

Move out of California is the best solution

danacebi says

protip: being a good parent is best.

won't happen.
being a good parent is hard.
buying an overpriced house in a good school district and letting the teachers take care of the kids is easier.

the sheeple have been brainwashed into thinking good schools are the answer to everything.
just like the sheeple were brainwashed into thinking home prices couldn't go down.

what's funny is that parents are so motivated to have "successful" kids, they have forgotten that raising your kid to care about people, have a sense of humor, a good attitude and great work ethic costs nothing.

these well-adjusted kids will have a much happier life than the over achieving, over ambitious alpha-dogs caught in the rat race of keeping up with the Jones'.
jokes on them.

Fisk says

I am truly trying to understand (esp. as I now have a small child)

I agree 100%. I am a graduate of a top public high school, ivy college, and top grad school. But in my profession (engineering) there is very little correlation between people's success and what schools they attended. I can't imagine any of the project leaders I work with giving a Harvard graduate any preference over a UCLA grad. Fisk is exactly correct that where the ivy schools help is in the 'crony capitalist' jobs like McKinsey, Goldman Sachs, etc. For my children, it will be public schools all the way. I will have great satisfaction if they go to UCSB or the like, have a great time and get good grades, and then move out of CA for their careers.

And on a different topic, I don't understand SF Ace's calculation. Am I missing something when I do the math?

2920+729+650-.33*(2200+729) = 3300/month, not 2500. Plus, for a loan >417k I think the interest rate is 5% not 4.75. I also think the upkeep estimate is a bit conservative, but probably OK for the first few years. Even at 3300/month, this should be possible for Menya to handle (although it will definitely be higher than rent on a 700k house) depending on what kind of lifestyle the family chooses. However, can Menya rely on 2 incomes forever? In this economy, and with kids, that's something to consider. I'm in a very similar income situation in LA, and am happy renting in a good school district for about 2500/mo. Just keep reading patrick.net, and you'll stay happy too.

here's my al-bundy polk-high story which might also add some perspective.

my buddy went to the top rated high school in our borough.
i went to the one of the lowest rated schools - bottom 10% of all schools in the province.

i aced all my courses (in the top 10 academically in the borough), got a scholarship, was accepted into all the universities where i applied so i had my choice of where to take my undergraduate courses(the engineering program i was accepted into is ranked 8th in the world). again i attended a very lowly rated high school but this didn't matter, it didn't detract from my education since i read the text books, did my homework and i can learn without being spoon fed.

my buddy, at the top rated school, was left back a year and had to retake courses. he had a hard time getting accepted into a university of his choice despite the school's stellar reputation.

does school matter? only very slightly, but what's much more important is the student's motivation, his friends and home environment. to blame the school for any shortcomings is just making excuses.

HousingWatcher says

Absolutely buy or rent in the good school district. If you buy, your home’s value will be less likely to fall than the house in the bad district.

What if in fifteen years from now the bad district improves and the good district regresses? It's all relative. The worse one has more room to rise, and the better one has more room to fall.

Live in the district with the best public school unless you have reason to prefer a private school. Your children will benefit from going to school with children of other "motivated" parents. Except for the current bubble, I would recommend buying, but I wouldnt buy real estate now anywhere, and certainly not in the SFBay area, since the air is still coming out of the balloon. I left CA in the 80s (was beautiful then . . .) and now live in the Philly burbs for the past 10 years; sent three daughters through nationally ranked public HS that is better than the private college prep school I attended. My property taxes? $5000 per year. And in this area, thats considered high. Would be paying 4x that in SFBay area. But choosing the school district is key. Good luck. You wont regret it.

Menya Don't overpay in Cupertiuno/ Mission San Jose- These are grade ghettos. I'm being told by lot of people that Indian and Chineese kids are tired of their looser parents always pushing them to compete, once they are on thier own they don't vene want to visit cupertino any more. Buy at a place which is more cosmo in nature.
Even thoough i afforded anywhere I bought in cambrian for this reason alone.

M, it's the educators, not the school. Have you interviewed potential teachers at each school? No disrespect intended but you are exhibiting wooley headed thinking with this approach to education. My kid graduated HS 2010 - small public high school, no athletic department (the robotics team had a cheer squad) and 90% went on to higher ed: state, UC, ivy.

when did it become fashionable to subcontract the education of our children? and why? what are young people learning at these schools? and when they finish, can they garden, weave, knit, cordwainer, sew, weld, work with wood, metal, glass, leather, wool, hemp? can they make and create useful articles which can be traded or bartered? can they milk a cow, sheer a sheep, make butter, bread, furniture, honey? i think you know the answer. in general, they all end up fucking useless, although some will be more sophisticated in their ignorance. when we give up the business model known as "the industrial revolution" we can move on to a society where we can, as john locke once said, value the true wealth in a man's labor.

jbidmt says

when did it become fashionable to subcontract the education of our children? and why? what are young people learning at these schools? and when they finish, can they garden, weave, knit, cordwainer, sew, weld, work with wood, metal, glass, leather, wool, hemp? can they make and create useful articles which can be traded or bartered? can they milk a cow, sheer a sheep, make butter, bread, furniture, honey? i think you know the answer. in general, they all end up fucking useless, although some will be more sophisticated in their ignorance. when we give up the business model known as “the industrial revolution” we can move on to a society where we can, as john locke once said, value the true wealth in a man’s labor.

I thought Chairman Mao died.

There's a lot of great discussion in this thread, more so because it's punctuated by personal experiences of the posters. I suppose I should add my $.02:

I attended the #3 ranked public high school in the nation (according to US News rankings), but I was not a motivated student and got mostly B's and C's in my classes. Entering university, I went to a 2nd rate UC school and in comparison to my high school curriculum, the courses were so easy that I got a 3.95 GPA my first two years. With that GPA, I was able to secure an academic scholarship and transfer to UCLA where I finished up with a BA. I was lucky, but it seems like there are far fewer "second chances" in academia than there were in the 90's and even early 2000's.

To bring it back to the OP's question, I think that it's very important to assess your children's ability before you decide to make such a cost-heavy decision. You don't want to sell them short, but if they're not the type to excel in a competitive, high-stress high school environment (like me) then I think that it's not useful or fiscally sound to put them in that kind of a situation.

It might not be a bad idea to rent in an area that's accessible to whatever school you are looking at. Then gauge your kid's abilities with regards to the school district and/or private school and then make a housing decision accordingly. Just my thoughts on it, good luck...

one of my former managers won't hire ivy league kids recently out of college.

they generally ask for too much based on their skill level.
poor value for the money, he says.

I think going with the area where the public schools are good makes the most sense. I'm surprised safety wasn't mentioned as a concern. Typically, the areas where public schools are better are safer. Sure you can send your kid to private school if you live in East SJ or East PA, just make sure you don't get shot on the way. The only one I can think of where the schools are crappy but the area seems safe is Willow Glen. I'm sure there are others out there, but it seems that good schools and lower crime go together.