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$782k over asking for a house in Sunnyvale

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Re: $782k over asking for a house in Sunnyvale

#111

Post by stygiansonic »

koolba wrote: post #78
stygiansonic wrote: post #67

Earlier quoted context omitted.

Two people working at a big tech company in the area will easily gross > 500K total comp.

$250K/year isn't chump change either. Let alone both having such jobs. Salaries in SV are high but they're not that high for most. At the single income level it's rare to have employees (NOTE: not contractors or business owners) surpass $3-350K. Plus, if you plan on raising a family[1] then you'd have the added costs of a full time nanny as I doubt anyone with a $250K+ job is going to be around much to raise their ki…

I never said it was chump change and I specifically mentioned big tech companies, not employees at most companies. Please don't put words in my mouth.

I also respectfully disagree that it's rare: https://www.paysa.com/salary-rank

Re: $782k over asking for a house in Sunnyvale

#112

Post by 2600 »

andrewstuart2 wrote: post #3

Working at a huge tech company like Google or Facebook is attractive to me, but not enough to justify spending $2.5M on a smaller house, or 12x more per square foot. And this is just in Phoenix. I know there are other places with tech jobs and much lower cost of living, or better income-to-COL ratios.

Can you extrapolate your thoughts on Phoenix real estate?

Re: $782k over asking for a house in Sunnyvale

#113

Post by guelo »

koolba wrote: post #59

> The four-bed, two-bath house — less than 2,000 square feet — listed for $1,688,000 and sold for $2,470,000. Using a ballpark figure of $500/mo per $100K of house, this comes out to $12,500/mo. That's $150K/year, mostly after tax (there's a bit of a deduction for interest but let's ignore that for now). Using the standard 30% rule, that means you should have a gross income of about $500K. What I'm questioning is, ho…

They're probably converting stock options into a house. That's why you see a lot of all-cash buyers. If you have a few million lying around a house in silicon valley is probably a better investment than stocks and bonds. Especially if it also makes your commute easier and gets you the suburban lifestyle that many american families crave.

Re: $782k over asking for a house in Sunnyvale

#114

Post by hardtke »

JustAnotherPat wrote: post #34
victorNicollet wrote: post #13

In France, there's no such thing as paying over the ask price. You are forced to sell to the first buyer who offers to pay the ask price. I suspect that this is done to prevent prices from rising too quickly.

Can you just overprice it and let bidders fight on lower than asking? Essentially the same thing, but with different psychology. I wonder how it would play out differently.

A couple of years ago (in Oakland) we bid on some houses that were priced at the market rate or slightly over. In one case, we bid a token amount over the asking price, and were the only bidder. In the other case, we were slightly below asking. In both cases, the sellers had expected to get a bidding war and pulled the house from the market. In the first scenario (we bid over asking), the sellers are supposed to pay the selling agent the commission the agent should have received had the deal gone through (that is generally the rule when the agent delivers a full price offer). In the Bay Area market, however, demanding the commission would be fatal to the agent's reputation. The sellers of both houses re-listed about 6 months later and got a much higher price that what we had offered, so they won in the end.

Re: $782k over asking for a house in Sunnyvale

#115

Post by sureshv »

Listing under to create a bidding war is definitely a thing in the Bay Area. It's really gotten out of control the last few years. From last month:

Listing: $2M - https://deleonrealty.com/property/4136-briarwood-way-palo-al...

Sale Price: $3.2M - https://www.redfin.com/CA/Palo-Alto/4136-Briarwood-Way-94306...

Re: $782k over asking for a house in Sunnyvale

#116

Post by _dps »

victorNicollet wrote: post #106
pkulak wrote: post #103

Earlier quoted context omitted.

If buyers and sellers never set a price, how is a valuation ever accurate?

Usually, you try to base it on the recent sales of similar properties nearby. Sale data is more-or-less public information, and there are good aggregators: https://www.meilleursagents.com/prix-immobilier/paris-75000/

I'm curious if the population generally thinks this is a reasonable situation. I can easily imagine a 25% difference in valuation of two properties in the same area with the same number of bedrooms, the same age, same space, and nominally the same amenities. I can also imagine a 25% difference based on some newly opened restaurants, new bus routes, etc., that will not be reflected in historical data.

There is also an enormous subjective-experience component in how people value residential real estate, and enormous variation in details that really do matter and aren't available in real estate data aggregates (like lighting profile, and how intelligently the interior design exploits that lighting profile).

It's so far from what I'd consider reasonable based on my (obviously limited) experience, and I'm genuinely curious how the locals feel about it.

Re: $782k over asking for a house in Sunnyvale

#117

Post by dsp1234 »

BoorishBears wrote: post #95
vasilipupkin wrote: post #79

Earlier quoted context omitted.

No, you people don't get it. That house is on a large lot. You could knock it down, build a much bigger house for a 1 million and have a 4-5 million dollar house for 3.5 million. it's a good deal.

I do get that, 2.5M for that plot is still a large amount of money. The point is that even a 3.5M for the new house will be a lot, but by virtue of it's location and salaries at Apple it's justifiable

Here is a snapshot of sales of lots that are 10.000 to 20.000 sqft sold in the last 3 months:

https://www.redfin.com/city/19457/CA/Sunnyvale/filter/min-lo...

2,5M, with respect to the existing market, doesn't appear to be out of the norm.

Re: $782k over asking for a house in Sunnyvale

#118

Post by jsolson »

victorNicollet wrote: post #73
JustAnotherPat wrote: post #34

Earlier quoted context omitted.

Can you just overprice it and let bidders fight on lower than asking? Essentially the same thing, but with different psychology. I wonder how it would play out differently.

This might be the case for very high-end houses and flats, but I don't have a lot of experience with those. For mainstream properties, from my experience the market is saturated with people who price above market rates and would rather wait for months than accept a significantly lower price. If you see something that you might consider buying with a 20% discount, you usually don't bother visiting the place. This like…

I think this sounds like what the GP is describing -- they price above market to seek a higher than market offer. That they aren't inundated by offers simply suggests that the demand isn't there to garner that sort of premium. The market for houses in Silicon Valley is severely supply constrained, so sellers are able to demand a premium (that is, they could price well above what they "market" price ought to be and likely get offers at or near their asking price). It would set up a similar uncertainty in potential buyers minds that results in the absurd offers above asking that we see today.

Put differently: while the specifics of this sale (price well above asking) might be impossible in France, the "sale price well above rational market price" phenomenon is really hard to quash when the market chooses to be irrational for a while.

Re: $782k over asking for a house in Sunnyvale

#119

Post by jchung »

CPLX wrote: post #84

Greetings from New York. You people are fucking insane, for the love of God please consider building some apartment buildings. Cheers.

The strength of NIMBYs here is dramatically higher than in New York. That is supported structurally through the fragmentation of local politics.

Source: I'm a New Yorker transplant to Palo Alto.

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