February 12, 2007

Real Estate Musings

In 1995 we purchased our current home at the base of Emerald Hills in Redwood City for $315,000 from the original owners. I’m still amazed that we did, given the fact that the stench was so bad throughout the house as we toured that when the realtor and I left, we could hardly stand to be in the same car together. At the next home we viewed, we grabbed some lemons off the tree in the front yard and rubbed them all over our clothes to try and eliminate the odor. All the while, my realtor kept reminding me of “location, location, location.”

Despite the initial introduction, we purchased the house, gutted quite a bit of it, and spent $25,000 and one month of sweat equity on remodeling the kitchen, refinishing walls and painting the interior, replacing the carpet, and refinishing the hardwood floors. My point? I suppose I could bore you with a pontification on the adage “location, location, location.” We could discuss the need to see beyond the superficial and trying to envision what a house could be with a little elbow grease. Or we could talk about how property is a good investment, and that our equity put our kids through college and could possibly allow us to retire earlier than we ever imagined. But I am more interested in what $340,000 can buy you in today’s market on the mid-Peninsula.

Searching on both Redfin and MLS, I came up with two properties between Woodside, Redwood City, San Carlos, Belmont, Redwood Shores. This is what I found:

1090 Main Street, #202, Redwood City
$349,000
Condominium
680 sq ft
1/1
outdoor assigned parking spot
HOA dues: $255/mo

I actually passed by this property this weekend and popped into a Saturday open house. I found a four-story secure building, set immediately adjacent to the CalTrain tracks. The unit looked like a typical aged apartment. No apparent kitchen or bath updates in the 24 years of existence. Neutral paint and carpet, large outside patio. While it is in close proximity to downtown, CalTrain, SamTrans, and a Safeway/Longs shopping center, those were the only upsides that were apparent. While nothing needed to be done immediately on this property, the single pane windows allowed road and train noise, and there was nothing architecturally unique about this unit. And the homeowner dues seemed high given that there was little indoor or outdoor maintenance required for a unit this size.

1614 Hudson, #107, Redwood City
$330,000
Condominium
606 sq feet
1/1
carport
HOA not listed

I have not seen this unit, but it is near the cross street of Woodside Road, which leads to both highways 101 and 280. SamTrains buses run nearby. It is an three-story, older unit, with no interior pictures or virtual tour available online.

Out of curiosity, I then expanded my search to encompass all of San Mateo County. I found 51 listings total, with the majority being studio and 1/1 condominium units in San Bruno, Daly City and San Mateo. The predominant address was the Shelter Creek Road neighborhood of San Bruno.

So the answer to my question, “What can I get for $340,000 in today’s market?” is not much. Not a starter home, not a fixer-upper, no single-family residences at all. Of course it has been 11+ years since we purchased our home and there is appreciation to consider. Out of curiosity, I checked to see how quickly our home had appreciated and found that on average, the property had appreciated at 10.5% per year, based on a recent appraisal. Obviously we have been in a boon market, and we started with a single family home in a great neighborhood (location, location, location), and you probably will not see this kind of appreciation over the next ten years, nor will you see this kind of appreciation on a studio condo, but by buying a unit such as these, my guess is that you will be earning money quicker than putting you money in the local bank, and you will have something to call your own.

---