Bay Area Bubble 4.0 is now officially entering insanity stage: $2.8M Teardown in (of course) Palo Alto
It may be just the tip of the Krazy Kool-Aid effect, but this is not how a reasonable housing market should work. Thanks very much to Burbed reader Wendie (as well as additional fans) for bringing this textbook definition of Irrational Exuberance to our attention.
559 TENNYSON Ave
Palo Alto, CA 94301Listed for $2,088,000 on 1/25/2013
Price changed to $2,088,888 on 1/27/2013
Sold for $2,820,000 on 2/25/20132 Beds
1 Baths
1,353 Sq. Ft.
$2,084 / Sq. Ft.
Built: 1921
Lot Size: 7,500 Sq. Ft.
Sold On: Feb 25, 2013
Property Type: Detached Single Family
Stories: 1
County: Santa Clara
Style: Cottage/Bungalow
Community: Old Palo Alto
MLS#: 81302338Located in the heart of wonderful old Palo Alto with top rated schools on a large 7500/SF lot. Charming 2 bedroom 1 bath plus den. One oversized bedroom. Hardwood floors , utility basement, and detached Garage. Sold as is in its present condition. Offers to be reviewed after 2/8/2013.
We’ll have plenty more evidence as we move into Spring Selling Season that the Real Bay Area is in a Real Bubbly Attitude. Maybe this can be the First 35% Overbid of Spring. Now let’s hear from Wendie.
This realtor did an amazing job with the photos of this house! How else could this 3/1 1300 square foot house have sold for 2.8 million dollars?? 800K over asking prices.
I mean, did you ever think that taking photos of a 1920′s bathroom and a CORNER of a room could do such magic?
x
You’re simply not giving the agent enough credit, Wendie. I see at least TWO corners. What, do you think these houses just sell themselves?
March 4th, 2013 at 8:16 am
oh goodie! it’s been so long since we’ve had a saluting toilet. realtor professionalism lives on in PA.
$2.8 for that?!? are you sure there isn’t a portal to somewhere hidden in there?
March 4th, 2013 at 8:37 am
To those who don’t get it, value is in the land. The lot size is what sells this property, coupled with the fact that it’s not in the flood zone. To a builder, a crappy house is infinitely more desirable than a beautiful old house, because a shack like this will not encounter resistance from the city for tear down.
One can build over 4000 sf on this lot, including full basement. A new construction in this neighborhood routinely sells for $5-6M.
March 4th, 2013 at 8:38 am
First mentioned here by our beloved RE.
March 4th, 2013 at 8:45 am
For someone to pay $2.8M for this fine piece, I suspect more than that toilet was saluting.
March 4th, 2013 at 10:56 am
Two thousand dollars a square foot, what the flip. I can’t imagine someone thought that was the best deal they could possibly get.
March 4th, 2013 at 11:22 am
Somebody cashed OUT, man!
March 4th, 2013 at 11:29 am
Keep in mind, money isn’t everything. A prime location like this doesn’t grow on trees. An executive doesn’t have time to waste waiting for another opportunity to come up. Mark Z overbid by way more to secure his 94301 property.
March 4th, 2013 at 11:35 am
I know right!
Seriously, Why spend time and resources building high density developments for the commoners when you can invest your time and energy into building mansions in the flats, 5 feet from your neighbors?
It’s important to note that nobody pays you for being altruistic!
Let’s just hope that this guy finishes the build before the next bubble burst, or somebody is gonna feel the pain!
March 4th, 2013 at 12:02 pm
Awesome price gain. Property tax was $1600 previously. A nice gain in revenue for the county.
March 4th, 2013 at 12:09 pm
This is everyday capitalism. Why do business execs pay 3X to fly Business Class when they can save money by sitting with the commoners?
March 4th, 2013 at 12:38 pm
The only problem with that analogy is that the commoners have ample access to base rate seats and several to go around.
March 4th, 2013 at 12:39 pm
The inverse analogy would be that execs would buy all the base rate seats, remove them, replace them with 50% the number, and charge 3X.
March 4th, 2013 at 1:11 pm
His argument about paying more to save time basically fails with the airline analogy unless he does not realize it’s the same plane going to the same destination. What’s next, the business class customers deplane 30 seconds faster? Who knows.
A better example might be door buster deals. I’m not about to waste my time, so I always pay more in dollars, but far less in time. Dollars are easy to come by, but I will say this, “They ain’t makin’ more time!’
Camp overnight to save $50? Who does that?
March 4th, 2013 at 1:25 pm
RE, I know Palo Alto. I’ve lived in the Bay Area all my life. The housing stock is unremarkable, the traffic is nearly as tedious as central SF, it isn’t any safer than any number of less expensive towns in the area, the restaurants are only remarkable by dint of costing too much, everything closes early, and the whole holier-than-thou ethos of the place is vile. The attitude you have that it’s better, because it costs more, because it’s better, because because because, is exactly the problem with the entire place.
March 4th, 2013 at 1:29 pm
“Fools and their money”
March 4th, 2013 at 1:37 pm
This is a clear sign of the bubble top.
March 4th, 2013 at 1:54 pm
Bubble top? So soon? I don’t think so, but if the clowns in DC don’t get their shit together it’ll burst sooner rather than later.
March 4th, 2013 at 2:23 pm
Finally some people now believe me when I complain about low inventory. People think it just started happening this year, and that’s not true. It started happenin all over the place this year, but has always been plaguing the RBA market.
March 4th, 2013 at 2:32 pm
With prices so low, owners just don’t have much incentive to sell. Unfortunately for most owners, most buyers don’t seem very willing or able to pay more. Today’s featured place is clearly an exception.
March 4th, 2013 at 3:46 pm
I wonder if the sellers used the proceeds from the sale to move somewhere that’s actually nice. Like Hawaii.
Ah yes. The good old housing bubble is back. Now is the time to start your bubble blog and get in on the ground floor.
March 4th, 2013 at 4:56 pm
Did the bubble ever actually leave Palo Alto though? I thought that was a land of perma-bubbliciousness…
March 4th, 2013 at 5:11 pm
Aka RBA!
March 5th, 2013 at 5:06 am
[...] case that the housing bubble in the Bay Area is absolutely unmistakable. Yesterday, we had a 35% overbid in Prime Palo Alto for a tear-down bungalow on a lot too small for subdivision. Today, we have an even smaller [...]
March 5th, 2013 at 7:39 pm
Manhattan has plenty of areas costing over $1000/sf forever, and it’s not a bubble. All you get is air space.
March 5th, 2013 at 8:50 pm
“forever and that’s a mighty long time”
March 5th, 2013 at 10:15 pm
“But I’m here to tell you there’s somethin’ else… the afterworld. A world of never ending happiness…” and real estate prices doubling every ten years.
March 7th, 2013 at 3:23 pm
It’s the location. Wouldn’t you rather buy this than a fine 4807 Sq Ft custom home on 2 beautifully landscaped acres in the wine country? You’d have to buy 2 Aston Martins and A Bugatti Veyron to spend what you saved, and who can drive 3 cars?
March 7th, 2013 at 11:40 pm
#13 says,
>>His argument about paying more to save time basically fails with the airline analogy unless he does not realize it’s the same plane going to the same destination. What’s next, the business class customers deplane 30 seconds faster? Who knows.
As a biz class customer, I can tell you it saves time in at least 3 ways:
1) You get to deplane first
2) You get your luggage first
3) You’re done with your meal already by the time you arrive
March 8th, 2013 at 12:04 am
#28, you’re still flying commercial? How déclassé.
March 8th, 2013 at 7:10 am
Remember, I care about the bottom line.
March 8th, 2013 at 7:31 am
Bottom line: If you want to save time, private jet is the way to go.