$1.2 Million for a Condo? Crazy.

I keep reading about how housing prices are starting to flatten out. As an individual who is looking to buy a home in the next year, I have been watching the market and observing the various trends. In the summer time (2005), housing prices were just crazy. People were over bidding for crappy houses - houses that they would probably regret paying so much for. As the fall came around, I started seeing homes stay on the market longer and many home price reductions. I figured the real estate bubble had finally started to leak some air. That is good news for me (a home buyer).

Recently, a buddy of mine told me about a friend of his that is selling his condo in San Mateo. The guy apparently paid about $800K for the unit back in February of this year. He has since put it back on the market for $1.2 Million. Supposedly, one of the realtors in the area told him that $1.2 Million was NOW the going rate for his unit. A 50% gain in less than 10 months isn't too shabby - I was skeptical at whether the condo would actually sell or if it would just be another one of those units that sits on the market for 90 days until the seller decides to either lower the price or take it off the market entirely. Either way, I know how crazy the peninsula real estate market is, so I just kind of said "That's crazy".

It just so happens that I ended up meeting my buddy at his friend's place a few weeks later for some other unrelated reasons. Before I walk into this place, my buddy tells me that this is his friend's place that he was telling me about before (I then noticed the 'For Sale' sign in the front yard). From the outside, I sure as hell didn't think the place was worth $800K, let alone $1.2 Million. But, my buddy told me that his friend had upgraded the place a bit, so I figured I would see granite counter tops, crown moldings, hardwood floors, and stainless everything in the kitchen. Nope. Not even close. While the view of the place was fantastic (it is situated on a lagoon in San Mateo with a dock in the backyard), the place looked like it did when it was built back in the 1960's. Don't get me wrong - it wasn't a bad place at all, but for $1.2M, I really expected a mansion. And this was no mansion. If anything, the place reminded me more of my college apartment, except this place had a great view of the water.

I don't know whether this condo sold or not or if my buddy's friend took it off the market, but IF he did indeed get his asking price, then I would have to say that the real estate market is still out of control.