by Anton Blewett on March 3, 2008
By Anton Blewett, Cell: (650) 996-2028
Recently a buying frenzy began for what many investors consider a good deal. Consider the housing auction that took place weeks ago at the San Mateo County Fairgrounds. Many investors bought properties at great discounts, such as $100,000 less than what similar properties fetched last year. Yet ask yourself, “Does great discount equate to good buy?” As you ponder the question, consider: the price dropped $100K in one year. Or perhaps I can phrase it another way: the price dropped $100K in one year.
Buying a home at a $100K discount: good buy or not? Hopefully you’re thinking no, it isn’t. If a property dropped $100K in only a few years or less, then the area obviously doesn’t hold values well. In fact the area is likely experiencing a market correction (as opposed to market cooling). When homes depreciate at double-digit rates, technically the market is correcting. In most correcting markets, economists predict continuing corrections throughout 2009 and possibly into 2010. So what is $100K discounted from last years prices may be bought at a $200K discount next year.
Over the last six to seven years, nearly all Northern California markets experienced high single and double digit growth. Areas traditionally considered slow growth markets exploded with high growth. Consequently the same markets implode with high depreciation. On the flip side, consider Burlingame, Menlo Park or Palo Alto. Were these good buys before 2000? If good buy means steady appreciation over time, then yes. The growth in these markets either flattened or cooled. Many still experience appreciation, only the numbers are much smaller.
Before buying in any area, ask yourself: was it a good buy before 2000? If yes, then expect steady appreciation over time. If the answer is no, then expect at least two years of depreciation or more.
See next week’s follow-up: When buying in a correcting market makes sense.
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by Anton Blewett on July 2, 2007
Mount Carmel, Redwood City, is a neighborhood I suggest to many move-up buyers because it provides charming architecture, similar to homes found in neighboring Menlo Park and San Carlos, at more affordable prices. The neighborhood boasts great weather, steadily improving schools (greatschools.net gives both North Star and Clifford top marks), tree-lined streets and ample green space through parks and nearby schools. Situated north of Jefferson and west of El Camino, the neighborhood meets many demands of the Peninsula lifestyle, including convenient commuting, easy access to shopping and the growing Redwood City downtown, and a strong sense of community.
The majority of my past buyers, who purchased real estate in Mount Carmel, did so because of the area’s charming architecture and lot sizes — 7500 square foot lots are common. Styles include Craftsmen homes from the early century, Spanish bungalows from the 20s and 30s, and ranchers from the 50s. The homes are well constructed; in fact most were built when a two-by-four was actually two by four inches. Overtime many of the original 2/1s and 3/1s were converted to 3/2s, which brings my only complaint: oddly configured home additions. In one house, the master bedroom was accessible only by way of the toilet.
Perfect for Move-Up Buyers
With the following considered, Mount Carmel is an ideal fit for buyers looking to upgrade aesthetics, home size or neighborhood.
Suggested Drive
To get a quick sense of Mount Carmel, take Whipple west from 101. The neighborhood streets begin just west of El Camino and ascend in alphabetical order, from Arch to Birch to Clinton and so on. Start paying close attention to the homes after Duane St. Turn left on King St. At the end of the first block, you see Stafford Park, a favorite picnic spot. From here I suggest either stopping to walk the streets or continuing on to the downtown (approximately Middlefield and Broadway). For those who make the drive, please comment with your thoughts.
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