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  • #76
    For those that are curious, this is the house: https://www.redfin.com/CA/Palo-Alto/...06/home/606013

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    • #77
      Originally posted by kdeva View Post

      We have spoken before back in 2018 when we were in the market, but decided to not buy.

      I like the way you have put it, we are short of a house, we have been renting for 12 years and my husband says he doesn't want to feel like a grad student and at some point we have to settle down and we know we are going to be here. We will continue to look and buy in the next year. As you say, it may possibly be the worst time to enter the market, but we are not going to flip the house, we are looking for a house where we will stay at least for the next 15 years until kids go to college, so I think we can weather a downturn.
      Sorry you didn't get it. Yeah, crazy market - entire peninsula has been that way for better of 30 years. Find the house that fits and close your eyes and submit that offer

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      • #78
        Originally posted by kdeva View Post
        For those that are curious, this is the house: https://www.redfin.com/CA/Palo-Alto/...06/home/606013
        wow. Even my jaw dropped. The land must be worth 3 million…

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        • #79
          Wow. By that price per square foot my house would be 5.5 million. I am so sorry you have to live in Palo Alto. I understand your reasoning but my goodness really nice houses exist for a fraction of the cost. I could see 3 million for a really nice new home that needs no remodeling. You will have a lot of work to do.

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          • #80
            I live in a different reality and can not even imagine the housing market there, but you could probably fit the house in my neighbor's "shed" were they keep the extra cars

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            • #81
              Ha I looked at it and thought that's a really nice house, compared to my $2m shack.

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              • #82
                All our non-VHCOL members really shouldn't be shocked by this by now -- we've had so many of these threads. It's quite normal Bay Area situation.

                Most VHCOL members don't go throwing comments of the complete lack of opera/symphony and museums or whatever metropolitan area benefits not ever found in all but 10 cities in the US and have held back on some of the VHCOL shaming/shade thrown here

                Here's the recent sampling of 3month sales in palo alto -- not shocking.
                https://www.redfin.com/city/14325/CA...582:-122.14164

                /endrant




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                • #83
                  I agree with Star Trek Doc, and kind of chuckle at us plebs who are excited by 5 figure appreciation on homes. Purchasing that house 10 years ago would have been a home run investment and probably still is so long as you can afford to wait for the appreciation.

                  That said, $3.2 million dollars and it has pink laminate in the kitchen...holy guacamole!!!

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                  • #84
                    Originally posted by kdeva View Post

                    We have spoken before back in 2018 when we were in the market, but decided to not buy.

                    I like the way you have put it, we are short of a house, we have been renting for 12 years and my husband says he doesn't want to feel like a grad student and at some point we have to settle down and we know we are going to be here. We will continue to look and buy in the next year. As you say, it may possibly be the worst time to enter the market, but we are not going to flip the house, we are looking for a house where we will stay at least for the next 15 years until kids go to college, so I think we can weather a downturn.
                    Ah bummer you didn't get it. Nice land/trees out front.

                    I don't know your exact area you're renting but have you considered not buying in Palo Alto proper, but somewhere cheaper like Redwood City (or the like). And then still send the kids to private school. Anyway, good luck! (I'll be going through something similar in 2022).

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                    • #85
                      Originally posted by Molar Mechanic View Post
                      I agree with Star Trek Doc, and kind of chuckle at us plebs who are excited by 5 figure appreciation on homes. Purchasing that house 10 years ago would have been a home run investment and probably still is so long as you can afford to wait for the appreciation.

                      That said, $3.2 million dollars and it has pink laminate in the kitchen...holy guacamole!!!
                      You have a point. People should be kind and understanding. Every place is different and has idiosyncratic delights.

                      OP Sorry you did not get the home. I know you really wanted it. Might be a blessing.......you might find one you like better.

                      I also think Hatton's point above is worth considering and rereading. I personally don't think you are foolish for renting, nor do I think it is a poor financial decision.

                      There are no guarantees in life. Things that are expensive and have gone up a lot in CA the last 20-30 years might continue to go up a lot over the next 20-30 years or they might not.

                      For any HCOL area the thing Hatton mentioned that would give me pause is remote work.

                      Zoom, Microsoft teams, etc.

                      From literally any location you can do great work and share that great work.

                      If I was starting a tech company would I feel compelled to pay high salaries and high taxes in CA or could I pay less and live in Tampa Fl or Charleston SC or Austin TX or _____ insert "nice" city.

                      My wife is from CA. She loved growing up there. She loves the Japanese super market (which is ginormous).

                      CA is cool, but not the only place a tech company can be located. Would a lower cost location give a company a competitive advantage?

                      Will companies continue to move out of CA (like Tesla) and will the prices start to slowly mirror those of other locations in our great country?

                      No idea, but it is not impossible. I am very conservative and it would worry me.

                      Any doc who lives in CA must be realistic. Docs don't get paid a premium to live in CA. We can make the same (more?) in other locations.

                      We are not tech workers. Geographic arbitrage is a real thing.

                      If you love CA and make a lifestyle choice to live there as a doc realize it is not a financial decision but a lifestyle decision.

                      It might be the perfect decision for you and your family but be careful calling it an intelligent "investment".

                      It is a place to live.

                      Will the appreciation continue? Perhaps. How long? Forever?

                      One really nice thing is that married filing jointly you can keep 500k of profit off the sale of a personal residence and pay zero capital gains.

                      That is a huge tax advantage for people in HCOL areas.

                      I wonder why that has not been the target of the "tax the rich" movement? Perhaps because most HCOL areas that have huge profits from home sales are in blue states?

                      Regardless, that is a pretty awesome way for a high income human to make some cash and avoid capital gains taxes.

                      OK, sorry to ramble. OP, just don't feel dumb for renting. No shame in that. Might turn out to be a blessing. No one knows for certain.
                      Last edited by Tangler; 11-09-2021, 03:02 AM.

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                      • #86
                        I looked at the pictures and that house really needs a complete redo to be a comfy, up to date, multi-million dollar residence. It can be a lot of work and a lot of headache, but there are those who thrive on engaging their creative energy. My better half would love doing a 4 month project to magically transform a house like that. What would the house be worth after a spectacular makeover?

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                        • #87
                          “Most VHCOL members don't go throwing comments of the complete lack of opera/symphony and museums or whatever metropolitan area benefits not ever found in all but 10 cities in the US and have held back on some of the VHCOL shaming/shade thrown here ”

                          I agree with the sentiment regarding the shaming/shade comments. Negative comments are taken personally, true or not.
                          However, NYC, California, Boston and DC in particular have extremely high costs of desirable housing within a reasonable commute for daily living. Extremely difficult to avoid and pockets that exist and are difficult to comprehend. The urban/suburban/rural life style choices (and the related amenities) is personal, thus can be a negative.
                          Objectively, you have Compensation surveys, some difference but not a lot. Urban typically pays less (more competition). Housing and taxes are the big ticket differences in cost of living. They definitely matter greatly in ones financial health. No pass on the math.

                          That said, California in general and specific locations will be a financial disadvantage (as other places). It is just as possible to increase the housing in other areas, thus the term “big doctor’s house.” That said, VHCOL income and housing are the big rocks. For many housing is the easiest to make a terrible financial mistake that leads to poor results.
                          Thank you for the Pali Alto, Ca sales comps. For most, it illustrates the need to consider housing costs. I actually feel empathy for how outrageous the housing costs are in California. It just seems crazy.
                          That is a math/value opinion, not an insult. Catch the wave right and ride it. Truly a monster wave for those that don’t surf. Amazing, unreal, scary, another world it seems like an extreme sport financially. Wipeouts for newbies? Could be.
                          Last edited by Tim; 11-09-2021, 04:51 AM.

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                          • #88
                            Originally posted by kdeva View Post
                            For those that are curious, this is the house: https://www.redfin.com/CA/Palo-Alto/...06/home/606013
                            The house looks fine to me. You may need to reset your expectations. If it was me, I would not renovate or improve anything before moving in.

                            Things like the roofing are actually essential to replace when damaged. The colour of the bathroom tiles or laminate vs granite benchtop isn’t.

                            If the house is worth 500k, then the land value is over 80% of the property value, which is a positive investment wise.

                            I don’t know the Bay Area property market at all. In terms of average weekly income vs price, I think it is actually cheap. But who knows where tech salaries will go in the future. It has the highest density of UHNW individuals in the world currently though.

                            You will face 2 problems (cognitive errors) when you purchase.
                            1. Myopic loss aversion
                            2. Everyone hates admitting they were wrong. It’s hard to correct a large market timing error. Second only to the pain of losing a large amount of money is the pain of admitting that you were wrong and ended up paying a lot more for something than you otherwise could have.

                            On 2, there is a silver lining. It taught me, truly taught me that I can be wrong.

                            I somehow got it into my head that the housing market in our area couldn’t go up further sustainably. This turned out not to be the case.

                            Eventually, I realised it was not a hill that I wanted to die on.

                            There was nothing that stopped me from buying sooner other than: my (erroneous) valuation belief, my aversion to debt (which I could easily afford) and sticking my head in the sand about it for 5 years. It was not like the bank would not have lent the money to me 5 years earlier. I took a gamble and lost.

                            A year before I bought the house, I said to my wife, “look I have a strong feeling (in my guts), that the housing market will correct”. She said “FFS, you’ve been saying this for last 4 years. I want this in writing”. So I typed on a piece of paper “If a 10% or more housing correction has not materialised by _(1 year on the day), I promise to buy the house”. Signed it and gave it to her.

                            1 year later, we had the exact same conversation. She presented the note to me, which I had signed and said “is this your [email protected] To which I said “OMG, yes it is!”.
                            She bought the house within a month, without a building inspection (which I would not recommend). It still worked out fine (for us).

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                            • #89
                              Originally posted by Dont_know_mind View Post

                              The house looks fine to me. You may need to reset your expectations. If it was me, I would not renovate or improve anything before moving in.

                              Things like the roofing are actually essential to replace when damaged. The colour of the bathroom tiles or laminate vs granite benchtop isn’t.

                              If the house is worth 500k, then the land value is over 80% of the property value, which is a positive investment wise.

                              I don’t know the Bay Area property market at all. In terms of average weekly income vs price, I think it is actually cheap. But who knows where tech salaries will go in the future. It has the highest density of UHNW individuals in the world currently though.

                              You will face 2 problems (cognitive errors) when you purchase.
                              1. Myopic loss aversion
                              2. Everyone hates admitting they were wrong. It’s hard to correct a large market timing error. Second only to the pain of losing a large amount of money is the pain of admitting that you were wrong and ended up paying a lot more for something than you otherwise could have.

                              On 2, there is a silver lining. It taught me, truly taught me that I can be wrong.

                              I somehow got it into my head that the housing market in our area couldn’t go up further sustainably. This turned out not to be the case.

                              Eventually, I realised it was not a hill that I wanted to die on.

                              There was nothing that stopped me from buying sooner other than: my (erroneous) valuation belief, my aversion to debt (which I could easily afford) and sticking my head in the sand about it for 5 years. It was not like the bank would not have lent the money to me 5 years earlier. I took a gamble and lost.

                              A year before I bought the house, I said to my wife, “look I have a strong feeling (in my guts), that the housing market will correct”. She said “FFS, you’ve been saying this for last 4 years. I want this in writing”. So I typed on a piece of paper “If a 10% or more housing correction has not materialised by _(1 year on the day), I promise to buy the house”. Signed it and gave it to her.

                              1 year later, we had the exact same conversation. She presented the note to me, which I had signed and said “is this your [email protected] To which I said “OMG, yes it is!”.
                              She bought the house within a month, without a building inspection (which I would not recommend). It still worked out fine (for us).
                              Cognitive errors can be avoided.
                              Buy what you need, when you need it, and what price you can afford.!
                              Don’t try to time the housing market. You are relying on luck, not skill! .

                              Comment


                              • #90
                                Originally posted by kdeva View Post
                                For those that are curious, this is the house: https://www.redfin.com/CA/Palo-Alto/...06/home/606013
                                Wow. That house would cost around $300k where I live. And I wouldn't even want to pay that!

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