The Condo/Townhouse segment of the Foster City market is holding it’s own about as well as single family houses over all with 36 active listings and 13 pending sales as of today. The pendings are in the lighter tone above. That ratio has increased a tad since I did this report six weeks ago, when there were 31 active units and 18 pending sales, but it’s interesting to note that a large number of those sales, 10 of 13, sold since May 27. That sort of reflects the same little boost we had with Single Family houses during that same period. Of course these units vary tremendously in size and utility, but I can’t resist highlighting a few that are worth seeing because they’re so darn nice! I would expect to see them sell relatively quickly:

893 Erickson listed by Jan Majeski of Alain Pinel for $879,500. This is one really adorable townhouse at Winston Square. 4 bedrooms, 2.5 baths…and really done nicely! A top drawer remodel, I like this place alot.

1025 Helm listed by Debbie Wong of Prudential for $748,888. This wide waterfront 3 bedroom, 2.5 bath unit at Bayfront Court is also done well and it’s rare to see a waterfront exposure this terrific. Shows really well, it’s a great listing!

4106 Admiralty listed by Guillermo Reyes of Keller Williams for $415,000. I know, I know…the Admiralty has it’s issues, and yes, the refrigerator is in the dinning room, but you don’t see many folks willing to really fix up a one bedroom unit like these folks have. It’s a really cute unit!

Go have a look…tell me if you disagree.

I’ve been asked to comment on a couple of scenarios that have recently been brought to Jim for discussion. The first is about those fortunate souls who find themselves in the enviable position of not having a home loan.  The question posed was whether or not they will have to purchase flood insurance when the Foster City change goes into effect.  The short answer, no.  Just as you are not required to carry a homeowner’s insurance policy, you will not be required to carry a flood insurance policy.  It is worth noting however, if your home is your largest asset and you may need to access your equity via an equity loan/line or a reverse mortgage, you would be required to carry insurance at that time.  If this were to be after the 2010 deadline (assuming nothing changes in terms of the flood zones), you would not be able to lock in the “preferred rate.”  Just like some who choose not to carry homeowner’s insurance once their loan is satisfied, you would be self-insuring for better or for worse.
The second question posed to Jim was regarding condo unit owners (the following comments also apply to town homes).Typically, in a condo situation there is an HOA (Homeowner’s Association). General rule of thumb is the association has what is called a “master” policy. In most cases, the master policy covers from the studs of the walls out, plus any common areas.  They do not cover the interior of the units or any liability issues that may arise within your unit.  In the event of a flood, if you do not carry a flood policy for the interior of your individual unit, you would not have coverage.  It is very important however, that you check with the company who handles the policy for your HOA to see what the policy covers.  Lenders usually do not require evidence (proof) of insurance for condo owners who are part of an HOA, as the exterior is covered under the master policy for most covered perils such as fire.  It would typically be the responsibility of the HOA to have its own flood policy for the exterior of the building plus any common areas.  If your HOA does not have a flood policy and later becomes required to carry one, you could find yourself in an assessment situation.  Do yourself a favor, check this out, or go to a board meeting and discuss this issue with your board members.

The Condo/Townhouse market has actually been remarkably strong in Foster City, with 31 active listings as of today, and 18 Pending Sales. That’s really an excellent ratio and speaks well for this segment of the Foster City market. Condos and Townhouses are naturally more affordable than single family homes in this area and we’re certainly seeing some real activity here. I’ve color coded the actives in a darker tone for easy access in the chart above. There’s actually been more activity in this segment in the last few weeks than there has been in single family sales. In the last 2 weeks 10 condo/townhouses have sold vs. 6 single family.

Nowhere on the Peninsula is there a community boasting as many large condo/townhouse projects as does Foster City. I’ve actually sort of procrastinated about writing a post about this market segment because it’s shear vastness makes it a bit of a struggle trying to consolidate all of it’s facts into a coherent report on how it’s doing. There are 24 projects with 50 or more units, Redwood Shores by comparison, has 15. These developments span the price range from a high of over $1.3mil last year at Promontory Point to a 1 bedroom condo being sold short at the Admiralty for $329,888. It’s been a long held staple of real estate thought that a single family home will hold it’s value better than a condo or townhouse and thus it’s a better investment but the fact of the matter is that in a community where an entry level house is $900,000 minimum and lots of people want to live here condos/townhouses have done really well. Appreciation has been steady in Foster City over the last 10 years yet some values have fallen slightly over the last 18 months or so. I believe that to be the product of 3 things, 1. The market is experiencing a natural adjustment, 2. Foster City’s short sales have basically been in the lowest price ranges where zero down sub-prime loans were most prevalent and thus these properties have been sold at a discount to move them and 3. Association dues in some projects have risen to a point where it has, to some degree, effected desirability. Dues in some projects are hovering between $450.00 and $500.00 a month…one project is now at $735 a month. Here’s some fun facts:

30 Total number of Condos/Townhouses actively on the market in Foster City

13 Total number of them that are traditional 2 story townhouse units

14 Total number of Pending Sales

15 Total number of closed sales in the last 3 months

6 Total number that sold at or over the asking price

2.1% Average percentage of price reduction on the other 9 properties

6.8% Average price reduction across the board on Condos/Townhouses in the last year in FC.

Again, with 24 projects chiming in and considering the variations in units and their relative conditions it sure seems to me that condos and townhouses in Foster City has been, and will continue to be, a pretty darn good investment. I debated this with a mortgage broker buddy of mine recently…I think that if a buyer is qualified to $650,000 and it’s a choice between a house in San Bruno, South City or Pacifica or a condo in Foster City…it’s the Foster City condo all day long. In the long run it will hold it’s value better.