They're paying for that 13,000 sq feet of property, not so much the house.
$782k over asking for a house in Sunnyvale
41–50 of 209 posts
Re: $782k over asking for a house in Sunnyvale
#42Working 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.
> but not enough to justify spending $2.5M on a smaller house, or 12x more per square foot.
Maybe it's just the wording but I don't get that. If they're paying enough that 2.5M is within reach where it wouldn't be in Phoenix is it really a problem?
I'm in the middle of a job search right now and I'm finding that while absolute numbers sound appalling (ie. 2.5M for a 2,000 sq.ft. house) the income:COL is not as dramatic. I rent, but so far places that have high-end apartments that cost 2x what my current one does pay about 2x more (usually even a bit more) on average.
To me it comes down to wether you'd like to live in Sunnyvale or Phoenix as long as the companies in both locales are paying enough to afford comparable housing (I wouldn't expect identical square footage). Remember we're talking about a 2.5 Million dollar home 1 mile from what is probably one of the most advanced tech campuses on Earth (and probably has some of the best paid).
When you put it like that I don't think it's hard to see why some people would sacrifice a little square footage for living and working at a place like that over Phoenix in an instant (I know I would).
Re: $782k over asking for a house in Sunnyvale
#43Aside: I don't think it should be legal to not accept the asking price for a home. With any other thing I want to buy, if I agree to pay the list price I get the item. Sometimes I can haggle the price down but the listed price is always accepted. This system of listing a price to 'get people in the door' and then igniting a bidding war makes it impossible for anyone to shop for a house except for realtors who are 'in…
> Aside: I don't think it should be legal to not accept the asking price for a home. You're attacking basic supply and demand here. Let's say I set a list price and then figure out I could have asked for more...you want to legally bind me to sell for less than what the free market is willing to offer? Where does this stop? Should we ban speculative investments as a whole?
No, it just reverses the dynamics: instead of starting out low to get people into the door, you start with a list price that's too high. If the bids you're getting are always far below your asking price, you know the free market isn't willing to cough up what you want, and you lower the price to something that is more in range. If your initial asking price is $1MM and all bids are around $800K, consider dropping the list price to $850k and see if they want to play now.
That's the usual dynamic in Belgium.
Re: $782k over asking for a house in Sunnyvale
#44It's a 13k lot a mile from Apples new campus. The person who bought it knows it's potential. Even if you make 10% of that initial investment you're still doing amazing.
I think you're on to something here; usually when you see transactions that seem absurd from the outside, there is some other angle that you don't know about (like, you can rip down the existing house and build one 3x the size that you can sell for $8mm).
Or 6-7 smaller houses and sell them for ~$1m each.
Re: $782k over asking for a house in Sunnyvale
#45Working 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.
They aren't paying that much for the house. They're paying that much because it's located in a good area. They'll knock it down and built a brand spanking new house and sell that for a profit. This happens every day in hot real estate markets
The description kind of hinted the lot would be big enough for 2 houses. Would the local lets law you flatten the house, build 1 house to live in on half the land, and say sell the other half of the land for a million bucks to a developer?
Re: $782k over asking for a house in Sunnyvale
#46I see this everyday in the Bay Area. In this case it seems to be a tech worker. Usually these are bought by some investors in China and the houses are never occupied.
I doubt that's the "usual" case -- yes, cash-only transactions occur, and foreign investment buyers are in the market, but I don't see a ton of vacant homes. I recall hearing from a real estate agent that foreign purchases were fewer than 10% of the transactions, but I have no idea what her source was.
Vancouver circa 2016, though...
Re: $782k over asking for a house in Sunnyvale
#47If they keep paying for it, you should just really rise prices. It's the market, baby.
Yes, presumably the asking price was just far under market.
Re: $782k over asking for a house in Sunnyvale
#48Working 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.
They might have tens of millions and think that the house will retain and probably increase value. Greater fool theory. You are not buying this with a $150k salary.
Yep this was bought on an upswing that will be impossible to sell at this value again for 100 years.
Re: $782k over asking for a house in Sunnyvale
#49Aside: I don't think it should be legal to not accept the asking price for a home. With any other thing I want to buy, if I agree to pay the list price I get the item. Sometimes I can haggle the price down but the listed price is always accepted. This system of listing a price to 'get people in the door' and then igniting a bidding war makes it impossible for anyone to shop for a house except for realtors who are 'in…
> Aside: I don't think it should be legal to not accept the asking price for a home. You're attacking basic supply and demand here. Let's say I set a list price and then figure out I could have asked for more...you want to legally bind me to sell for less than what the free market is willing to offer? Where does this stop? Should we ban speculative investments as a whole?
I think he simply wants the same rules that apply to McDonalds to also apply to homes.
If McDonalds has their BigMac Meal labeled with CHF 12.50 (the current price in Switzerland IIRC) the cashier won't be able to refuse to sell it to me for that price even if I look particularly hungry and it's 4 O'Clock in the morning (and might thus be ready to pay more than 12.50). At least in Switzerland you are generally obliged to honor your displayed prices.
I have never bought a home (I'm a 23 y/o student), and I don't know if the process in the US would be comparable to the process in CH, but if a home is labeled with a price of say CHF 1'250'000 I expect to be able to walk in there with a bag with 1'250 CHF 1000 bills and pay for the house without additional price haggling. However I can imagine that this is not how it works (apart form the "pay with cash" part, which I know works for sure).
Re: $782k over asking for a house in Sunnyvale
#50Aside: I don't think it should be legal to not accept the asking price for a home. With any other thing I want to buy, if I agree to pay the list price I get the item. Sometimes I can haggle the price down but the listed price is always accepted. This system of listing a price to 'get people in the door' and then igniting a bidding war makes it impossible for anyone to shop for a house except for realtors who are 'in…
> makes it impossible for anyone to shop for a house except for realtors who are 'in the know' and can tell you the real price based on listing.
Impossible and not easy for you?
So that is the harm you are stating? That you don't want to put the effort into understanding the market enough (without a realtor) to know the value of what you are buying? Plenty of people operate fine under the current system.
What's next? Do you want to have a lottery with a fixed and low price. That way people with more money and so on don't have an advantage.
Things are never equal. Some people have an edge. This edge is not entirely a realtor skimming as I think your comment implies.
> This system of listing a price to 'get people in the door' and then igniting a bidding war
Is it wrong for ebay to do this as well?