I thought that was crazy until I saw this: 1 acre in Palo Alto with no house for $15M, and it was listed for $700K less than 5 years ago.

https://www.zillow.com/homes/for_sale/fsba_lt/2108947518_zpid/priced_sort/37.448271,-122.111299,37.415624,-122.157433_rect/14_zm/

That house is a two minute stroll from my old house. It's a great neighborhood :-)

Hmmm:

"Home has not yet been completely cleared of prior owner's possessions."

Trying to puzzle this out. Does it mean the steps are unsafe, or not to go into the yard?

"Use care with steps to back entry. Best to observe back yard from those steps as yard instead of entering it."

@carolb_w_fi : Sounds to me like the previous owner collected snakes that are not all accounted for. ;-)

But they point out twice that the electrical was upgraded last year! So it's got that going for it.

But wow, $2million for a teardown.

We have good friends who live in Old Palo Alto. They are actually coming to visit us next week. I visited them last year and went on long walks every day. The real estate is insane; the amount of teardowns amazes me.

We were talking about this several weeks ago and my friend told me their (relatively modest) house is worth ~$5 million. And would be a teardown. It's nuts.

It's a shame so many people have so much money to 'throw' away!!!!!!!!!!! flush down the toilet when that money could be used SO much better!!!!!!!!!!!!!! Ca is on a different planet.

Don't use the steps! (You could die.)

Yeah, the Bay Area market is crazy.

I grew up in PA and Los Altos Hills, have lived in Mountain View for the past 23 years.

Our house is quite livable, we did an extensive remodel in 2008. It would sell for about the teardown PA house listing price, it has 2BR and 1 1/2 Bath, 1465 SF. And, Robin, no one in my family every threw away a cent. My mother was a librarian, my father a public school teacher. My DH is a retired librarian and I was a nurse for 40ish years. We are all extremely frugal. My parents ended up able to afford Los Altos Hills because they had a rental house they sold to buy the lot and my father and cousins built the house themselves in 1960. We bought our house in 1995, just as a housing slump started to improve. It has gone up steadily since and never lost value during even the worst of downturns. We bought when we did because we were getting a dog. I've always said that Dewey's doghouse was our best investment!

The owner of my cleaning service lives in EPA. She said she's happy to note that her neighborhood now has residents of many ethnicities where a few years ago it was all Hispanic and African-American. I think prices there are beginning to move upward as people start to take a closer look at the area. Public schools there (it is in a different county, which doesn't help) have been a perennial problem that has defied solution.

The joy of stock options. Suddenly $3M is not that much!

Everything in Palo Alto is at or above the $2M mark. My old house (wonderful Eichler in Greenmeadow) I bought for $190,000 is listed at $3,350,000. Supply and demand.

With the money you save not buying a $2.3 M tear down, you could live in East Palo Alto and send your kids to private school.

It's not really throwing money away, it's buying a piece of valuable real estate by someone who can afford it.

But a lot of people can't afford it and a lot of well-employed people can't afford California cities.

"Low income" in San Francisco is below $112,000 for a family of four.

My house, when I bought it was actually worth very little money. I could buy this house where I grew up for probably less than 1/10th of what I paid for it and for 1/20th of what it's probably worth now. The house happens to be worth more because a lot of money has been put into it, but that's still not what's worth the money.

The money is the 19 foot x 37 foot (approx, I don't remember the depth) patch of dirt the house sis on. You couldn't give away 19 x 37 feet of bare property where I grew up. It's worthless.

It's a shame, because I make no more income here than I would there.

I didn't know there was really a difference in East Palo Alto than Palo Alto but my son told me otherwise. He's a techie and recently moved from his 600 square foot apartment in Mountain View ($2500/month) to a 4 bedroom 2000 square foot house in East Palo Alto for 5K/month --so about half price, shares it with 3 friends.

He said Palo Alto would have been much more expensive. He said that this house is worth about 1.5 million, nothing special and that the neighborhood seems to be slowly getting better but there still are problems.

People are paying 2.3 mil for a lot in a desirable location. Obviously demand set the price.

We all make different lifestyle choices, there's no reason to shame people who make a different choice than you might make.

I've lived in CA all my life, I have no desire to live elsewhere and accept high property prices as a cost of living here.

cawaps, I know one family who have done just that- live in EPA and go private, but there are no guarantees for private school placement on the Peninsula- and a lot of the schools are not k-12, so you have to roll the dice twice at least. I think it's easier to get into Stanford than Crystal or Menlo. Interestingly, one of the reasons Crystal was founded was to alleviate the need to send children to the East Coast to board because the local private schools were so oversubscribed even decades ago.

PS Having said all that, I would agree with you and advise people to live some place with less desirable schools than PA.

I live in Oakland and send my kid to public school. We had seriously thought about private school, but the Great Recession hit as we were in the middle of the decision process, and there was no way I was committing to the cost of private with job security being what it was. I've never regretted the decision. If more people with education and money sent their kids to public school rather than opting out, public schools would be better.

People opting out of public schools is probably the lowest reason on the list of why public schools are what they are.

I can't imagine there being a "bad" public school in some areas. I work one day in a township with one of the best public school systems in the US. But people who can afford it and want to still send their kids to the private elementary school at $50.000 a year, no multiple student discount.

Palo Alto's schools are very good, but each has a different emphasis...and a waiting list.

"It's a shame so many people have so much money to 'throw' away!!!!!!!!!!! flush down the toilet when that money could be used SO much better!!!!!!!!!!!!!! Ca is on a different planet"

No, they don't throw their money away.....they surely live on a different planet where high percentage of the people there are highly intelligent, extremely well educated and working incredibly hard. Most of them work around the clock, and around the globe. There are reasons that they got Stock Options, patents, and create successful companies, yet you and I do not.

What they accomplished is well worth the reward they received. No, they don't flush their money down the toilet, they invest their money wisely.

I am not sure how money could be used much better than to buy a house where you work. And I think that people who work in certain industries don't have a lot of choice where they work.

As I said......CA is on is on it's OWN world!!!!!.....It's INSANE in CA!!!!!!!!!!!!!

Bless your heart, robin. Just forget all about California. ^^^^^^

However, having.a house here is a great investment when I move. Just sayin.....

Sold our 20 y.o Bay Area Tract home for 50% more than what we paid. We did minimal upgrade (ie - carpet and paint) - kitchen was unchanged. Built our custom forever home with high upgrades in a resort town. Thanks to stock options and the tech industry.

I wonder when we reach the point where some American cities follow the South American model of an expensive affluent city surrounded by slums, lived in by the people who work in the support and service industries for the wealthy in the city.

There are too many things in place to prevent the development of actual Favela as in Brazil, I think. New York has had rent control, subsidized housing and well developed public transportation in place for a century, but much of California does not seem to have that, particularly in places like Palo Alto. Where do the people who clean offices and houses and do labor live around Palo Alto. (In Manhattan, they may live as close as a few subway stops away, if they have subsidized housing).

"...Where do the people who clean offices and houses and do labor live around Palo Alto..."

East Palo Alto, San Jose, Fremont...wherever they can.

"Where do the people who clean offices and houses and do labor live around Palo Alto."
I clearly remember I read an article on WSJ asking this exact type of questions, it was before dot com burst when the real estate was 1/4 (?) of current price.

I would not worry about "what could happen", as I have confidence in our human capacity and our social and political systems, the resolutions will be/may have been already developed, even if they are not obvious to us outsiders.

When I lived in Palo Alto, this was an annual newspaper story in the local paper.

It doesn't look like the housing market in East Palo Alto or Fremont is accessible to the working class though either. And I don't know that there is much in the way of public transportation.

In cities with long-standing high costs of living there seem to be more mechanisms in place. A dual income couple I know in Manhattan (Probably in the $300K range, no kids) rented something in the same neighborhood (two blocks apart) as one of the menial workers in one of their workplaces, income $45,000, because she was eligible for housing subsidy. And, as it turns out when they went to buy (which admittedly, she could never do) they had to move to a newly redeveloping area in East Harlem, again surrounded by low-income housing. Their old neighborhood would now be even more out of reach for them (They were paid off an incredible amount of money by a developer to buy out their lease, which they held onto). The menial worker, now retired, can remain in her apartment while the general income required for the neighborhood shoots up.

It's also possible in my city for working class and even the working poor to afford a house (sometimes to buy) within easy public transportation to where they work.

Housing costs are a severe problem to everyone but hit the low wage earners really hard. Where I live, you can see multiple cars parked outside of tiny homes. That doesn't mean the kids have cars to cruz around, that means multiple working adults living in the same home. And it is severe. Not to mention that many people work 2 or 3 jobs. Fortunately many cities have tried to set aside low income units in new builds, but that doesn't nearly address the problem. Plus voters have raised minimum wages city-wide in a couple of cities here; but again that is like putting a band-aid on a limb amputation. I don't know how these people make it.

My husband and I were thinking that one 'crisis', like a car breakdown or a sick kid would be devastating for these people. It isn't funny for these people, it makes be sad and sick to my stomach.

The, Wherever do people live, question does not plague only service workers in our area. It is extremely difficult to recruit everyone from doctors to city managers (employers like Stanford and the City of Palo Alto offer housing support in order to get people.) On the other end of the spectrum, the owner of a local pizza shop used to complain that he never knew who would show up to work when he opened the doors in the morning- that makes serving the hungry hordes pretty difficult.

As for the crux of the problem- the imbalance of jobs to housing, the way forward is not entirely clear to me. I believe in higher density than what we have in PA, but as many have noted, there is plenty of density in NYC and yet the prices on UES are just as unaffordable. The NIMBYism however is epic with very few people willing to part with a 1950s vision of Palo Alto.

There was a lovely old hotel in downtown Palo Alto, The President. People have been living there as apartments for quite a few years now, with rent between $1200-$2400 per month being a great bargain. The building has been sold and will be turned back into a hotel. This is exactly the kind of housing Palo Alto needs and while many people bemoan its loss, no one will be fighting to allow a new building with a similar footprint, density and location to be built.

https://www.paloaltoonline.com/news/2018/06/13/residents-must-vacate-president-hotel-apartments-by-november

I love the Bay Area and am grateful we have too many jobs as opposed to too few. I hope we manage to come up with a solution that serves everyone well.

I know people like that. Sadly I am related to some. ^^^^

Rita I agree completely...

Part of the problem is that only old NIMBYs participate in the local politics. I went to a city meeting (I am a few cities north of you in SM) and it was all senior retirees complaining about how much the area has changed . They were against development and instead want more parking so they can drive to town (because they are all too old to walk). I don't think this is what most people want, but the younger crowd was likely too busy to attend.

I definitely hope to get more involved after we move back into our house. After the amount of work/$$ we are putting into this remodel, we are never moving, so all this is even more important!

Za.....I have......no problem living in a different world than CA...... IMO.....it really should be on an island out in the middle of the ocean.

People in those countries listed below, perhaps think our housing price and income are ridiculously high and insane. It is all relative.

If it is all kept within the context of the United States though, it's telling that "low income" for a family of four is $112,000 in San Francisco. I realize that's not Palo Alto but it seems like the housing situation in PA is headed in the same direction of that in SF.

Mind blown....

We are starting to see this in real estate at the lower price point/investment properties. The house is optimistically listed at 1000 sq feet and has one bath. There are multiple beds in every room and no other real furniture to speak of.

Granted at one point this house probably housed a family of seven with a bunch of kids in two of the bedrooms, but they were all related, and things got less tight as the older ones left home.

This shot is from inside the front door a step or two

palimpsest-

I suspect that is a shot of the inside of a house occupied by techies who are rooming together so they can afford housing while they are doing coding on some startup they think will be the next Facebook... :-)

Seattle has become a sort of second Silicon Valley which has driven home prices to crazy levels as well, though not as crazy as Palo Alto. Because of the concentration of tech and industry here, salaries have also soared. An article in the Seattle Times a couple of days ago (September 14, 2018) had these two shocking statistics:

1. The median income for a couple with kids in Seattle is $161,000.

2. The number of families with an income of at least $200,000 is greater than the number making less than $50,000.

It's a good place to be if you've lived here for decades and bought a house back then when you could get a very nice place for twice your annual income. If you've just moved here or aren't able to earn a spectacular income, it's a strain.

Pal, Palo Alto housing is more expensive than SF.

But not as expensive as Menlo Park, Los Altos, Los Altos Hills, Woodside or Portola Valley.

kudzu,

This is a local real estate picture so it is actually more likely that these are service workers like people who bus tables or clean offices or restaurants.

When my SO worked as a pastry chef the lower kitchen staff and cleaners often lived in a studio or one BR apartment that was all bunkbeds so they could live closer to work.

palimpsest-

Thanks for clarifying...I jumped to an unjustified conclusion. Guess I've watched too many episodes of the tv series Silicon Valley ;-)

I love that show! Although sometimes it hits too close to home for me :)

LOL!!! ^^^^ And oh, yes :-)

I've lived in California and Manhattan and I can't say things like this surprise me. I've also seen similar delapidated homes for sale in Hawaii asking for more than $1M. It's simply scarcity combined with high demand.