patrick.net

They're not really worth more than a million. Low interest rates cause asset price inflation.

MisterLefty says

Low interest rates cause asset price inflation.

Low interests cause venture capitalists having mountains of money, that they shower on tech dudes, who then proceed to go buy houses with suitcases full of cash.
It's not bad credit like last crisis.
And it's not going away easy.

What's the payment like on a million dollar mortgage? $5000/month? Plus property tax ($4000/month)?

Seriously? I can live like a king for a bit less.

Edit: oops I wasn't thinking clearly about the property tax.

clambo says

What's the payment like on a million dollar mortgage? $5000/month? Plus property tax ($4000/month)?

Seriously? I can live like a king for a bit less.

Property tax would be around $1K, not $4K.

There is a general fallacy that since one item of a kind is worth some price, then all of them are worth that price.

But if everyone went to sell them at the same time, they would certainly get nothing near that price.

So "worth" is strongly dependent on how many sellers choose to sell at any moment.

So "worth" is strongly dependent on how many sellers choose to sell at any moment.

True, but an individual buyer is only buying one house. Therefore, if he wants to buy in that area, he must pony up the $1million.

Patrick says

But if everyone went to sell them at the same time, they would certainly get nothing near that price.

Yeah but it never happens people all sell at the same time. You can't base anything on "what would happen if everyone sold at the same time".

If you paid me a million, I still wouldn’t move there.

How many electric car and/or autonomous taxi startups can the Bay Area support?
Lucid Motors (Newark, CA): $1B
Zoox (Menlo Park, CA): $500M

HeadSet says

So "worth" is strongly dependent on how many sellers choose to sell at any moment.

True, but an individual buyer is only buying one house. Therefore, if he wants to buy in that area, he must pony up the $1million.

No, not necessarily.

If seller sentiment shifts and say, twice as many go on the market, the price will quickly plummet. Doesn't matter that the individual is buying only one.

Heraclitusstudent says

Yeah but it never happens people all sell at the same time. You can't base anything on "what would happen if everyone sold at the same time".

That's just looking at the limit to make a point. Doesn't have to be all of them.

All that has to happen is a significant number of houses have to be added to the market.