WatchCash for 1/4 acre land and a 1500+ sqft home in Los Altos. I know the traffic is bad and the downtown construction will never end, but that is why I am offering the generous 400k. That is 100k above the value I see in a cash only land of buying a house.
Your 1.2 million figure is assisted by the crazy Macs and greedy banks, title companies, realtors, etc. I'm offering you straight up cash for value, outside of the virtual inflated world, where everyone deserves a house. ;)
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At that price i'll take 5.
Why so high? Why not 200k? 100k?
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Pleasanton, CA
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SiO2 says
200K for land value + 200K for building and contractor costs. However, at that cost I expect high quality. A nice view of a conservation area in a quiet (no highway) area would be reasonable. My yearly savings rate (ignoring any luck with shares) is about 20K when all is said and down (tax man, travels, santa, skinless chicken, organic berries, etc.). So, I am offering 20 years of my savings for a pretty small house. It is a great deal for someone that is willing.
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Pleasanton, CA
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SiO2 says
I forgot to ask. Do you mean you will actually take 5 (you need 2mil cash), or you will use the smoke and mirrors game of mortgage capital to collect the 2mil? Much different deal as we have all come to know.
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Personally, that's more than I would pay. Have you seen what $200k for a building can get you in other parts of the country?
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male
Tustin, CA
You've waited 20 years. Be patient... Wait 5 more years and you'll find one for 300k or even less.
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So in 5 years, a price for a 3/2 will go from $1.2m to 300k? a 75% drop?
Even if it did, it seems to me that the chaos that would have to happen to cause such a drop would mean that this place no longer would be a good place to live.
in all seriousness if the price were $400k, I would buy two adjacent houses with cash and combine the lot. that would be pretty sweet.
or buy 2 with cash, rent them for $4k each (the going rent for such a place in Los Altos), for a yield of 12%. that would also be sweet.
Well, except that the local economy would have a pretty significant collapse to enable that price to happen, so maybe I'd be unemployed and have to live off of those savings.
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400k investing and 4k rent does not yield 12%. Not even close.
48k income minus property tax (1.1% of 400k = 4.4K), insurance (lets say 2k), upkeep (another 4k/yr if you are lucky) = 38K. Now lets take a 30% chunk off to support the under-employed, social welfare, social medicare, schools, etc. etc. Now you are left with 38 * .7 = 26.6K on a 400K investment. 6.6% post taxes and expenses. Still great in these times, but not 12%. Now run the numbers on 1.2m. Makes me sick. It is only a bunch of crap lumber, drywall and lipstick. I paid my way through university by tear down houses. That was much more fun. ;)
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San Jose, CA
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SiO2 says
The local economy has already collapsed. It's just the sellers don't know it yet. All the buyers already know, but the sellers aren't listening.
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RentingForHalfTheCost:
Yes, I forgot the ancillary expenses. Insurance (ex. earthquake) for such a house is $1k. Property tax is right. Upkeep, 4K a year seems high, I don't pay that much on my house. And an owner may choose to have a property manager, which would take off some of the money as well.
I excluded income tax. Normally when discussing investments that's excluded, e.g. S&P did X% this year. And with real estate there's some tax advantages as well.
It's true that buying this for 1.2m and renting for 4k doesn't make sense. I'm pretty sure that most LLs in Fortress areas have the house from a long time ago and have lower expenses due to Prop 13. It would probably make sense for them to sell it and invest the proceeds otherwise. People buying these kind of houses are buying them to live in.
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SiO2 says
A decline in price of 50-65% or more wouldnt be unusual for a home which skyrocketed from $200-300K to $1.2M within 10 years to begin with. Infact its a prime example for a major correction. Thats why its a bubble and such the drops are spectulature going down as it was going up.
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So 10 years ago, or even 10 years before 2007 (the peak), Los altos 3/2s cost 250k? I wish I had seen some of those, that would have been a great deal, cheaper than San jose. I wonder why they didn't show on mls.
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From 1996:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/1996/10/18/PN71900.DTL
"Los Altos ranked 134th on Worth's list, with an average household income of $119,900 and a median home value of $546,400."
And let's check Zillow, not for the zestimate, but for the sales record:
http://www.zillow.com/homedetails/959-Seena-Ave-Los-Altos-CA-94024/19529906_zpid/
A 3/2 in Los Altos, 1650 sq ft, 12k lot. as far as I can tell, a fairly normal Los Altos house. Sold in 1992 for $515k. So no, these did not skyrocket from 200k to 300k 10 years ago or even 20 years ago.
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SiO2 says
Knock yourself out... wanna pay over $1.5M for anyone below, be my guest...
http://www.zillow.com/homedetails/909-Cowper-St-Palo-Alto-CA-94301/19494732_zpid/
Price History Date Description Price % Chg $/sqft Source
06/17/2011 Sold $1,300,000 -3.7% $764 Public Record
11/23/2010 Listed for sale $1,350,000 -- $794 CENTURY 21 M&M and Associates
11/17/2010 Listed for sale $1,350,000 260% $794 Century 21 MandM and Associates
07/23/1991 Sold $375,000 -- $220 Public Record
http://www.zillow.com/homedetails/495-University-Ave-Los-Altos-CA-94022/19526924_zpid/
Price History Date
Description Price % Chg $/sqft Source
09/03/2009 Sold $1,190,000 -- $1,074 Public Record
08/22/2009 Listed for sale $1,190,000 -- $1,074 Coldwell Banker
08/22/2009 Listing removed $1,190,000 -- $1,074 NRT California
08/07/2009 Listed for sale $1,190,000 213% $1,074 NRT California
07/13/1992 Sold $380,000 -- $343 Public Record
http://www.zillow.com/homedetails/915-Colonial-Ln-Palo-Alto-CA-94303/19501183_zpid/
Price History
Date Description Price % Chg $/sqft Source
11/01/1995 Sold $360,000 - $254 Public Record
http://www.zillow.com/homedetails/902-E-Meadow-Dr-Palo-Alto-CA-94303/19498718_zpid/
11/09/1995 Sold $309,000 -- $247 Public Record
http://www.zillow.com/homedetails/3725-La-Selva-Dr-Palo-Alto-CA-94306/19505293_zpid/
Date Description Price % Chg $/sqft Source
11/01/1995 Sold $295,000 -- $322 Public Record
http://www.zillow.com/homedetails/81-Lorelei-Ln-Menlo-Park-CA-94025/15580577_zpid/
Date Description Price % Chg $/sqft Source
11/10/1995 Sold $325,000 -- $184 Public Record
http://www.zillow.com/homedetails/920-Harmon-Dr-Menlo-Park-CA-94025/15580583_zpid/
Date Description Price % Chg $/sqft Source
11/08/1995 Sold $289,000 -- $258 Public Record
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Nothing but a bubbles! to the most extreme! irrational exhuberance, denial, self justification.
http://www.zillow.com/homedetails/3775-Bay-Rd-Menlo-Park-CA-94025/15568756_zpid/
Price History
Date Description Price % Chg $/sqft Source
06/30/2006 Sold $750,000 29.3% $757 Public Record
12/07/2004 Sold $580,000 101% $585 Public Record
05/23/1997 Sold $289,000 -- $291 Public Record
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40 male
San Francisco, CA
There's no way you can live in Los Altos for $400K. That's even pushing it in much less desirable areas. Sorry, I'm not a broker, but you have to be a little bit realistic.
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jdubbs29 says
Before the IPO Stock Bubbles started to happen during the late 90s, it was possible. Of course many bought using cash proceeds from their stock sale. That same stock declined over 75% in "value". It was really all a big give away. Transfer of wealth if you like.
Fall Real Estate 2000
Publication Date: Wednesday, Sept. 20, 2000 & Friday, Sept. 22, 2000
http://www.paloaltoonline.com/news_features/real_estate/fall2000/2000_09_22.lowmarkt.php
Breaking into the market
Yes, Virginia, it is possible to buy a first home in this area--if you're willing to make compromises
by Jocelyn Dong
So you're looking to buy your first home in Silicon Valley. How do you get into the market?
"Stock options," says real estate agent Chuck Atwell dryly. "Being a multi-millionaire."
Another real estate truism comes into play, however; it's all about the location. "Finding any single (family) home under $300,000 in Silicon Valley is very, very difficult," says Marcy Moyer, a real estate agent with Alain Pinel in Palo Alto. "There are still some homes in Sunnyvale between $400,000-450,000. For that same price in Mountain View, you get a fixer upper."
Atwell is even more frank. For $500,000 in Mountain View, he notes, buyers get "a property that should be torn down on a 4,000-square-foot lot, in an industrial/high-density area."
Today they call it the FaceBook effect..
You really think its worth 100B ? or just a Give away..
http://patrick.net/forum/?p=1208079
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jdubbs29 says
You can, actually, and I did for over 5 years. I lived in a 2bd/2ba 1400sqft cottage surrounded by woods and a beautiful creek. I rented for 1800/mtn which is equivalent to the costs of a 400k house if I want to rent the money to make it look like I actually own it.
My only reason for wanting to buy something like this for 400k now, is so I can have my own paint color preference on the walls and also put in a built-in closet and sound system. I'd might even be willing to pay up to 410K if the deal right.
You see I have the option to wait and just rent a house, just like many other people around here. I'm sure in 2-3 years things will look a lot different around here. 300K new homes in 2011! We are not going anywhere but down from here.
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Laguna Beach, CA
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At that price I'll take 10.
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Pleasanton, CA
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Goran_K says
4 million! Nice. Glad you are doing so well. Oh, you meant not with your own money. Ahh!
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If you can find anything at that price in Los Altos then I'll hire you as my realtor and pay you above average commission! Good luck with that!!!
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Henry7 says
Price = Current Price * 0.95^T
Savings = Current Savings * 1.15^T
Moral of the formula. Years (T) is on my side. I am not trapped in debt, so can use time to my advantage. ;)
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Henry7 says
If anyone hired me as their realtard, I would immediately beat the living crap out of them in front of their family. Then steal their car and jewelry. Unlike the professional realtard, I don't have much patience and I want my commission payout immediately. I don't like delaying the inevitable.
Also, if you do see me posing as a realtard, you have the right to shoot me on spot. Someone took over my mind and I deserve a new chance at life in the next round.