Searching through the Rough

Around this time, I started to have a crisis of faith.  By this point I'd been closely following the Millbrae-area market for about half a year; the more I learned, the more I liked the area, but also the more I realized what a difficult thing I was looking for.  There just are not that many condo developments in the area.  As a matter of fact, I had a complete list of every one in the whole city.

• Park Broadway - Nice, but expensive, and too far away from the station and downtown for me.
• 88 South Broadway - Insanely expensive.
• Belamor - Too expensive, uncertainty around construction status.
• Palm Avenue - Perfect location and nice size, but worrying HOA situation.
• 15 Magnolia - Only 10 units, never available.
• 75 Magnolia - Only 4 units, never available.
• Mateo Avenue - Only 10 units, more on this later.
• 1396 El Camino Real - Too far away from the station and downtown, practically in San Bruno.
• Windwater Mills - On a busy street near the high school, plus some worrying online reports.

There were also several developments near 280 that I never even really considered, as they were too far away from the station and downtown.

Burlingame had just a handful of options:

• California Avenue - Great units, but pricey and too close to the tracks.
• Ogden - In retrospect, I wish I had pursued the one-bedroom from here at the end of last year, but I had been too focused on Belamor.  Nothing else entered the market during the spring or summer of my search.

Like I said, I had a crisis of faith.  I had become increasingly sure that I wanted to live in Millbrae - I loved the weather, the feel of downtown, the public spaces, the extreme convenience of the transit station, the great access to the hills, city, and ocean.  Still, I just wasn't having luck finding a property I could afford that was in the (admittedly extremely small) area I was fixated on.  Did I need to give up the dream, go back to square one, and start my search over again?

I decided to take a little break - after all, the commute wasn't killing me, and perhaps the situation would change.  Along the way, I kept monitoring an interesting property.  In addition to my Redfin emails, I also had subscribed to Craigslist RSS feeds that reported on condos advertised in Millbrae and Burlingame.  Most of these duplicated information in the MLS, but some were FSBOs, and one in particular caught my eye: a FSBO condo on Mateo Avenue.  It seemed overpriced, but otherwise matched what I was looking for.  I decided to wait and see what would happen.

The property didn't seem to be advertised too heavily; after that first Craigslist post, nothing else came up, and I never saw it on any of the major FSBO web sites.  About a month later, it popped up again, this time with agent representation but without being listed on the MLS.  I decided to keep my distance - it still bore the same high price, and without the MLS connection I wouldn't be able to use Redfin.  It also had mysteriously lost about 90 square feet between the time it was a FSBO and when an agent took it.

About a month after that, it finally hit the MLS.  Still at the same price.  I decided to wait for now - I didn't want to play my hand by seeming too eager, and by now I knew the market well enough to feel pretty sure that it wouldn't get snatched up at the current price.  I knew from advice and observation that well-priced homes were selling quickly while overpriced homes languished for a month or more, so I figured that waiting for a while would give the seller time to adjust to more realistic expectations.

After a couple of weeks, the seller hosted an open house.  I still wasn't ready to officially tour, but decided to drop by.  It's kind of funny that I didn't do my first open house until towards the end of my search; I'd been scared off by warnings early on about attending open houses without representation.  Listing agents can use them to scout for new clients, and if you aren't already represented by an agent and decide to make an offer after attending an open house, the listing agent becomes your agent, which leads to a conflict of interest.  By now, though, I was happily represented by Redfin, and didn't think I'd have a problem.

As it turns out, I needn't have worried.  I attended two open houses, and both were very pleasantly low-key, with no pressure to sign a register or do other stuff I was worried about.  First I attended a house-house open house: an interesting, very old small house on Magnolia Avenue that had dropped by hundreds of thousands of dollars from its initial listing, and, if it dropped another two hundred thousand, would finally hit my range.  It was nothing spectacular, but still intriguing: nice large lot, cute small house, a bathroom that had probably been renovated in the 1940's, an old-fashioned detached garage, very little set-back from the sidewalk.  I thanked the agent and moved on to Mateo.

Once again, I had timed my visit to coincide with the arrival of Caltrain.  The open house was on a Sunday, so I had a narrower window.  The building is on the east side of El Camino Real, about a block from the tracks, but set much farther back than the California Avenue building had been.  The agent greeted me when I arrived, then took a call while I wandered around.  The train came by while I stood near an open window.  It was audible, but infinitely better than the California Avenue one, and without any vibration.  With time, I was confident that it would just become background noise, like a passing car; similarly, my current apartment is near a light rail line, and after the first few weeks I no longer noticed the sound.

The unit itself seemed crowded, but mainly because of all the furniture.  It was occupied by tenants, and while it had been cleaned up, it didn't show as well as the other condos I'd seen.  Still, nothing seemed wrong with it, and it was in better shape than the Palm Avenue unit that I had started making an offer on.  I wandered around, checked for mold, looked under the sinks, played with the doors and light switches.  Everything seemed in good order.

Still, the fact remained that it was overpriced.  This wasn't just a subjective feeling, and wasn't taken from the popular online home estimation tools like Zillow and CyberHomes.  I kept crunching possible values based on different methodologies, and kept coming up with a pretty consistent price range that was quite a bit less than the asking price.  At the simplest end, I took the price per square foot for similarly sized and aged units in Millbrae/Burlingame that had recently sold, and adjusted it for this unit's size.  I also took the most recent sales prices in the complex (which required going back to 2004-2005, during the boom but before the peak of the bubble), and tracked where those prices would go assuming that they followed the same overall price changes of Millbrae as a whole.  Doing this quantitative work helped me gain a lot of confidence, and made me more secure in deciding to wait until I could get a better price.