Over six years ago, I wrote about a house a few doors down from me that was for sale. The house – – more of a cottage, really – – was small, measuring about 900 square feet, but the lot size, by Palo Alto standards, was enormous: a full half-acre! Thus, this tiny edifice, and the turn on which it sat, sold for $10 million.
I was reminded of this yesterday, because I passed by a much grander property, which is a literal next-door neighbor, with a For Sale sign out front. This surprised me, because the people there had only bought the house a few years ago for $12 million. The guy they bought it from was the General Partner at Summit Ventures (AKA a gazillionaire). The guy was so rich, he actually owns the property where Jurassic Park was filmed.
My point is that a family doesn’t typically pay $12 million for a house and then decide to leave only three years later. It’s more of a “life home”, I would think.
But they put it on the market, and I was curious just how bad a loss they were about to take. After all, prices three years ago were WAY better than they are now, as I’ve recently pointed out with my own much more modest house, which has plunged in value from $8.5 million to $5.5 million. So I could only assume that these people had gotten in over their heads and were going to take a serious loss by getting out of their property at such a weak time. What would they price it at? $9.9 million, maybe? Less/ Maybe they had hit hard times, because this is not a seller’s market.
Ummm, I guess they don’t have the same misgivings about the market that I do. Here’s what they think they’ll get:
I was flabbergasted. I mean, Palo Alto is nice, but this isn’t Atherton (the truly rich town here, where such prices are seen frequently). I mean, it’s heartening to see your next door neighbor have a house that valuable, but, let’s face it, they could have priced it at any level. Why not a trillion dollars? It doesn’t mean the market will accept it. And Zillow seems to agree……….
One look at the history of the property (and keep in mind, most of the value is in the land) reveals the laughable ascent in price per square foot. From $52 to $3,688, a seventy-fold increase. This would only make sense if an enormous cache of gold and diamonds had been discovered in the dirt there.
I suspect I’m going to be looking at that For Sale sign for a long time. I also suspect I’ll be seeing another sign in a few months.
