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Regular Contributor
RWW
Posts: 63
Registered: ‎03-14-2012
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$1.4M for 1280 sqft? Help me out here...

[ Edited ]

....somebody walk me through the logic of somebody buying something like this. I know Mountain View is a nice place, close to the tech companies etc, and this house as nice finishes...but man...$1.4M?  15 minutes further away and you can get something WAY nicer for the same money or less.  Granted...it's 30 minutes each day out of your life....so say you make 300k a year @ $150 an hour that's about $20k per year....I still can't get to $1.4M from there.  Schools?  Uhhhh....really?  I suspect you can buy your dumb kid into a good college for way less.

 

What is the math or reasoning people do on this kind of place?  I'm really trying to understand this...but it just doesn't compute.  What am I missing here?  Do the his & her identical Subaru's on the drive way come with it perhaps? Is there oil or gold commonly found in Mountain View?  Perhaps there is a small refinery not shown in the pictures for asthetic reasons?  

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BAzx
Posts: 243
Registered: ‎07-08-2012
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Re: $1.4M for 1280 sqft? Help me out here...

[ Edited ]

First:  It is a sellers market right now - not sure when it will reverse... 

 

Then there are those that have lots of "cash" reserves that can put huge down payment or all cash...  this is all relative to the supply and demand.  With the limited supply, especially in good areas in the RBA will have lots of competition.

 

Is it realistic - it does sound crazy relative to other RE areas but it is what it is.  This area sure is not cheap to live and raise kids...

Regular Contributor
RWW
Posts: 63
Registered: ‎03-14-2012
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Re: $1.4M for 1280 sqft? Help me out here...


BAzx wrote:

First:  It is a seller market right now - not sure when it will reverse... 

 

Then there are those that have lots of "cash" reserves that can put huge down payment or all cash...  this is all relative to the supply and demand.  With the limited supply, especially in good areas in the RBA will have lots of competition.

 

Is it realistic - it does sound crazy relative to other RE areas but it is what it is.  This area sure is not cheap to live and raise kids...


What puzzles me is it is a crazy price relative to places which are a VERY short drive away.  I know "time is money", and "what's your time worth" etc, but still...  And if you had say $5-10M or so, enough perhaps that you didn't "care" about paying a premium...why buy a small, old shack like this?  Why not drop the extra 300-400k to get a nice big place in Los Altos?   I just don't get it!  I'm not saying head to Fremont or something..just 5 or 10 min more.  

 

With regards to supply and demand...there are many places where there is a 1-2 houses for sale....that doesn't mean they instantly become million dollar homes.  There has to be underlying value...something(s) people WANT such that they put a certain value on the home (weather, schools, proximity to work).  What I'm asking is what are those "things" which are where this house is...that aren't in other places a mere 5-10 minutes away?

 

 

Slightly off topic: Folks in Vancouver had a nearly 25-30 year bull run on their housing, they had homes go for MORE than this which weren't nearly as nice as this MV place (see "Crack shack or million dollar mansion")...unsurprisingly...things are starting to get ugly after years of warnings.  The difference there...there are no silicon valley jobs paying 100's thousands per year and the banks will take every dollar you have...garnish your pay cheques till you drop dead to recover the money you owe them.  There is no "jingle mail", full recourse loans only.

 

 

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ptiemann
Posts: 1,231
Registered: ‎08-07-2009
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Re: $1.4M for 1280 sqft? Help me out here...

did you see the neighbor (same size house) .. it sold for 1.5?

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LookyLoo
Posts: 6
Registered: ‎02-28-2011
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Re: $1.4M for 1280 sqft? Help me out here...

Sellers are welcome to set their home at whatever price they want, doesn't mean they'll get it.

 

That is a sh*t load of money for MV though.   Wasn't an equivalent PA property going for this price only a few years ago?

 

 

Regular Contributor
RWW
Posts: 63
Registered: ‎03-14-2012
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Re: $1.4M for 1280 sqft? Help me out here...


ptiemann wrote:

did you see the neighbor (same size house) .. it sold for 1.5?


LOLs.  Oh I have no doubt there will be 5-10 offers on this gem and maybe it will go for more than $1.5M :smileyhappy:.

Regular Contributor
armalock
Posts: 114
Registered: ‎04-06-2010
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Re: $1.4M for 1280 sqft? Help me out here...

Not sure I can explain the whole thing but here are some points:

 

  • Most people whose budget is around 1.3-1.4M do not have another 300-400K lying around. Being able to afford a $1.4M house does not make you rich in BA. I know some friends who simply got a one-time cash infusion of about 600-700K from an IPO or a nice equity deal; but that's it. Now is it wise to plunk that down to a house? That's a diff discussion.
  • I don't think you can realistically look at the house and say "this is worth 1.4M?". It is very cost efficient to do additions in Bay Area which is why they are so common. For about $100K or so you can easily add a 300-400sq ft to your home. Or you can spend that money and turn the existing house into a palace as long as it has "good bones". In here, people pay that money for the land.
  • Speaking of land, you heard this one before, location is everything. This house is in one of the nicer neighborhoods in Mountain View; very close to Los Altos. There are also many people who believe that Mountain View is the next Palo Alto in terms of schools (simply because of the number of high income young families who bought there).
  • The times are a bit crazy. I have been following some sales and Palo Alto is starting to fill with insane all-cash offers again. It is not as bad as 2006 (I did not see a significant movement in East Bay) but there's definitely money and a sense of "urgency" in buyers.
Super Contributor
Meguro
Posts: 329
Registered: ‎11-30-2009
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Re: $1.4M for 1280 sqft? Help me out here...

This home will sell closer to 1.5M - other one in the same neighborhood sold immediately and I suspect that went over the price too.  It's a great neighborhood with almost no commute to most job locations and easy to get to all the right shopping areas.  That price range is very common in Blossom Valley area of MV

Regular Contributor
ANOM
Posts: 121
Registered: ‎06-09-2009
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Re: $1.4M for 1280 sqft? Help me out here...

Second the previous poster


armalock wrote:

Not sure I can explain the whole thing but here are some points:

 

  • Most people whose budget is around 1.3-1.4M do not have another 300-400K lying around. Being able to afford a $1.4M house does not make you rich in BA. I know some friends who simply got a one-time cash infusion of about 600-700K from an IPO or a nice equity deal; but that's it. Now is it wise to plunk that down to a house? That's a diff discussion.
  • I don't think you can realistically look at the house and say "this is worth 1.4M?". It is very cost efficient to do additions in Bay Area which is why they are so common. For about $100K or so you can easily add a 300-400sq ft to your home. Or you can spend that money and turn the existing house into a palace as long as it has "good bones". In here, people pay that money for the land.
  • Speaking of land, you heard this one before, location is everything. This house is in one of the nicer neighborhoods in Mountain View; very close to Los Altos. There are also many people who believe that Mountain View is the next Palo Alto in terms of schools (simply because of the number of high income young families who bought there).
  • The times are a bit crazy. I have been following some sales and Palo Alto is starting to fill with insane all-cash offers again. It is not as bad as 2006 (I did not see a significant movement in East Bay) but there's definitely money and a sense of "urgency" in buyers.

^^^^^ Second every word. Super low interest rates made 1.4-1.5m an entry level price for areas with good schools. The quality of the house is mostly irrelevant (unless it is a total tear down). People buying these houses are buying location and schools, not the niceties of the house. And for a lot of people 1.4-1.5 mil is the max they can afford thats why for just a few hundred more you get much more of a house.

 

With schooling situation in BA, you really have no choice between private schools and good public schools in these few locations (unless you are ready for a very long commute to East Bay where they have cheaper housing and great schools). You can argue private bs public but if you want to go to good public school, this is what you will be going up against.

 

Having school age kids changes one's perspective on what is acceptable housing in BA. Especially when you have to compete with people from other cultures that value education above everything else.

Regular Contributor
RWW
Posts: 63
Registered: ‎03-14-2012
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Re: $1.4M for 1280 sqft? Help me out here...


ANOM wrote:

 

With schooling situation in BA, you really have no choice between private schools and good public schools in these few locations (unless you are ready for a very long commute to East Bay where they have cheaper housing and great schools). You can argue private bs public but if you want to go to good public school, this is what you will be going up against.

Having school age kids changes one's perspective on what is acceptable housing in BA. Especially when you have to compete with people from other cultures that value education above everything else.


 

Perhaps it is the schools/culture thing you mention.  I have no kids and my cultural background is one where no matter how poor the neighborhood the schools had similar resources (mandated by law), teachers are highly paid (>2x than here), very educated (masters degrees are very common...my Physics teacher had a PhD), and entry to post-secondary was 100% merit based, and kept affordable (the ave student can pay tuition with a decent summer job).  The result of all this?  Private schools are nearly non-existent (as are private universities...both run out of business), very high mobility among the "classes" due to the level playing field, and high representation of minorities in post-secondary schools (again..100% merit based).  The cream rises to the top, no matter how poor or how many IPOs your parents participated in.  And the homes....purely priced on the location/asthetics perhaps how NEW the school looks...but not the "quality of education".  

 

This strange pricing of houses based on "school quality" to me is a symptom of how broken the education system is here :/ .