To afford this house, you need a gross income of like $800,000, on which it would be a stretch to buy it - you probably need over $1m gross income to really afford it. Absolute insanity.
https://www.realtor.com/realestateandhomes-detail/4015-Scripps-Ave_Palo-Alto_CA_94306_M29661-58255
ruh roh stonks not stonking
guess everyone is liquidating to buy doge
This is how I’ve felt ever since I moved to south Florida five years ago. The real estate market has seemed completely bonkers since I got here, and I keep telling myself to hold off for a little while longer, there will have to be a correction at some point soon, but nope, shit just keeps getting crazier.
I don’t think the major metro Texas, Florida, North Carolina, or Atlanta markets are going to correct anytime soon. There’s too much buying pressure coming from people moving in. I also think if and when they do correct it’ll be 10+ years out and it’ll be to a higher level in real terms than where we are now. Not that that last part matters because you buy a house with borrowed money.
That price seems crazy to me, and I’m used to Manhattan prices
That’s a 9300 square foot lot. In Manhattan you could fit how many apartments into that space?
Would you really need that much? What would mortgage/insurance/taxes be, like $20k a month? So a quarter million a year. If you go by the standard rule of thumb of like 30% of income max, then sure, you’re right. But that kind of breaks down a bit at half million plus incomes. The asshole who buys this house is going to spend more on food and cars and whatever else than some peon living in a $300,000 shack in east bumfuck Idaho, but not ten times more. If they make like 600,000 a year they’re going to pay like 225 in taxes between California and federal. So they’ve got like 375 left, pay a quarter mill to the mortgage and have $125,000 straight cash left to live on? Seems pretty doable.
If Palo Alto were zoned like Manhattan, housing would be a lot more affordable there
Yup. Also good luck buying 9300 square feet of land in Manhattan for a mere 3 sticks I’m guessing.
This is a pretty big lot and there are a lot of interior/patio pictures that look pretty appealing. But just LOL at this being the headline picture on a $3 million house:
This is a viable strategy and perhaps something I should consider. Think I’d only be able to do that for a year or two before GTFO though, but it’d be nice to get a little cherry on the top in the form of an inflated salary/options on the way out. We’ll see how time works for or against us as we approach those later years and gl with your journey!
Assessed at $125k, taxes $1500/year. Lol California.
That’s a great attitude. I find that I’m very much against wasting my summers sitting inside working. Stonks, etc. can help shorten the amount of time doing that, so when you have extra money from not spending it on useless crap (BMWs, carbon fiber bikes, anything with a brand that charges extra just because of the brand), you can increase the time available to do what you choose. If your choice is to continue to work, that’s great, at least you have the choice.
wtf, how is that possible?
I would be terrified of buying a 3M house and taking on that mortgage with $600k of income per year.
You’re leaving out any kind of savings in your calcs so assuming it’s a couple or family and you’re maxing out 401k/HSA type stuff it’s more like $80k-$90k to live on. It’s defintely doable but I wouldn’t feel comfortable doing it.
LOL that is wild. I just assumed it was the website that had something wrong with it, but looking it up here Real Property Search
The land is worth $35,882 and improvements $89,543. It seems absurdly low for an assessment but checking other houses in the area via the assessor’s site shows a similar pattern. I guess this area of California just has cheap property taxes or I don’t understand how they assess property against an actual market value 
Sure, I wouldn’t do it. I’d probably stay in my two bedroom apartment and invest $350,000 a year.
TIL
Proposition 13 was a landmark decision by California’s voters in June 1978 to limit property taxes. Since the passage of Proposition 13, the Assessor values property only when there is change in ownership, new construction, or the market value goes below the base year value.
California’s Proposition 13 caps the growth of a property’s assessed value at no more than 2 percent a year. If the market value of a property falls below the base year value (plus 2 percent per year, compounded), Proposition 8 (passed in 1978 shortly after Proposition 13), allows the property to be reassessed at the lower value temporarily. When the market value of the property rises, the assessed value and resulting property taxes, may increase more than 2 percent a year, compounded up to the annually adjusted Proposition 13 cap.
Yeah, and it’s got me feeling like an absolute bandit. I don’t really understand it, but last summer-fall, we were watching homes languish on the market and actually have their asking prices drop as they sat there. I know this wasn’t common nationwide, but it was certainly true in the Portland metro, and these were good houses in desirable neighborhoods with good schools. But that’s what finally convinced us to pull the trigger: we could hardly envision a better opportunity coming along in our lifetimes, and it was going to be really hard to get our girls into a good school without leaving the Bay. But now I see a neighbor’s house listed for, like 10% more than we paid, despite it being a much smaller lot and house, and stuff that’s actually comparable is 20-30% more. Supply seems way, way down compared to last year, too.
as someone who is currently renting and was looking to buy in the bay or bay adjacent… man, I’m in no rush. Glad you got in perfectly.