I could fit 2.6 of them in my garage.
Something is worth what someone else is willing to pay for it. Even if that someone else is a chump.
If you’re making mid six figures in Silicon Valley, a place with a 15 minute commute is worth its weight in gold compared to a place with a 2 hour commute.
That is why this teardown is worth 2.5 million dollars. Because some guy making $400,000 a year can live there and pay 2.5 million and get to the office in 15 minutes. There are plenty of cheaper places in Oakland or wherever, but you can’t work 12 hour days and then commute 2 hours each way, it’s physically impossible. So it doesn’t matter how much cheaper it is farther out, or how expensive it is close in. You have to have that space close in.
Yes it would make more sense to build a couple dozen 100-story high-rise condos. Various regulations and red tape make it impossible to build enough high-rise housing to accommodate all the Silicon Valley workers.
So you get what we had here last week, which is the way he wants it… well, he gets it. I don’t like it any more than you men.
Look at the aerial map at the Zillow link. According to them, it’s the cheapest home on the block!
There are more and more people with stupid amounts of money. Doesn’t strike me as at all unreasonable to assume someone will buy this as a 2d (or 3d, 4th, ???) home. A place to crash while required to be in the office, with a more expansive AND expensive place somewhere else.
Basements are unusual in California, but it was fairly common with the 1920s bungalows to have a partial basement to contain a floor furnace and the water heater.
When you’re buying a house for $X,000,000, you’re not consuming the $X,000,000, you’re just shifting it into an alternative asset.
It would be the same as saying “What, that’s ridiculous that you can only buy 10 Berkshire Hathaway stock for $3M, I can buy 3000 Google stock for $3M!”. What you pay for the stock is irrelevant, what’s relevant is the difference in price between when you buy it and when you sell it. That’s different from buying a computer or a hamburger or any other object where the price is primarily determined by the utility of its consumption.
When I bought my house 20 years ago I thought I was paying an absurd amount for it. Turned out to have been a fantastic bargain. So who can tell?
Strangely enough, this IS a converted garage.
EDIT: Never mind, I read Zillow wrong. They converted the garage to add to the already spacious feel of the cottage.
Right, but a house isn’t just a speculative asset, you also live in it, or rent it out, or whatever. Or it could just be a speculative asset, and we get the 2008 housing crisis.
But most houses are purchased because the purchaser either wants to live in the house, or rent out the house.
But I agree with your point. If you can buy a house for $2.5 million, live in it for a couple of years, and then sell it for $2.5 million or more, then you haven’t paid that much for your housing. Even if you sell it at a loss, you’ve still had the utility of living there for X years. All that minus transaction costs and so on and so forth.
Anyway, buying the house for a stupid ridiculous price is only a gigantic loss if you can’t sell the house later for a stupid ridiculous price. Silicon Valley has had stupid ridiculous housing prices for decades, and it doesn’t look like that’s about to change any time soon. Yeah, the 2008 crisis left a speedbump, but prices today are well above the pre-crisis bubble prices, so if you didn’t have to sell in 2008 you’re fine.
This could all end tomorrow, when Silicon Valley goes bust. Will that happen tomorrow? Probably not tomorrow.
Very true. I once owned a 1924 house in North Hollywood with a tiny basement big enough for only a water heater and room to move around to get to it. Even then, it was a reduced-height heater.
According to Zillow, that same home sold in 1995 for $314K.
C’mon, you’re not even trying:
2.3M for 980 sq feet in Menlo Park. Check the adorable filing cabinet!
$3M 763 sq ft in nearby Los Altos!
That was outrageous then, too. I sold a similar sized house (on a much larger lot) in Concord in ‘92 for less than half as much.
Yeah, but in 1992 what was in Concord other than memories of the Port Chicago disaster? It was at the far end of the BART line, miles away from anything. I lived in Concord at the time, and it was so desolate that you could actually get a seat on the train in the morning. Today, you’re lucky if you can get on the train at all at Concord.
I’m just waiting for the day when there’s a collective awakening and thousands of “tech” people on the peninsula all say “What are we actually doing?” and the whole thing implodes. Hopefully Vallejo is far enough away to be undamaged. :eek:
It is not, really - there are lunatic daily commuters coming from as far away as west Sacramento( I used to know one, he worked in Oakland ) and Santa Rosa.
In 1996 when we were looking for a house we wanted to spend about $300K. We asked for houses in Cupertino or Los Gatos, I forget which, and the only thing in that range was a shack on a hill not nearly as livable as places I camped at in the Boy Scouts.
I’m surprised the Los Altos house was so expensive. I love that town, but didn’t realize that prices were quite that crazy there.
The title of the Los Altos listing is misleading. If you read the description:
The median home price in Santa Clara County is somewhere between $1.2M and $1.4M, depending on whom you believe. That probably means a 1,200 - 1,500 SQ FT house (or smaller) with 3 BR and 2 BA in an OK neighborhood with decent but not great schools.
Los Altos is very expensive, almost like Palo Alto, but Los Altos Hills is even pricier. Lots are bigger and you might be up in the mountains a bit with a view.
$2.5-million is the asking price. If someone buys the place for that, it – by definition – is not ridiculous, is it.
Hmmm…nah, still ridiculous :). It is like that solid gold camel saddle with twelve embedded Rolex watches P.J. O’Rourke saw once at a duty free shop in Saudi Arabia - someone may buy it, but it is still a little silly.
If you live in Nebraska or Ohio, most of the people in the world probably think you’re paying a ridiculously high price for your home. Prices are relative. News at 11.
If, some time in the not-to-distant future prices tank, we might say in retrospect that the prices were ridiculous. If they don’t tank, then they weren’t.