Perhaps you’ve heard that the housing market in the Bay Area is a bit insane. But maybe you don’t have any good examples to help understand just how insane.
Well, you could head to San Francisco, where a recent report said there is literally no longer one affordable neighborhood inside the city. You could head down to Sunnyvale, where the new Apple Park is turning the local housing market into a feeding frenzy as homeowners are getting hundreds of thousands of dollars over already aggressive asking prices. You could also stop by San Jose where Google is about to do to that city what Amazon did to Seattle in terms of livability.
Perhaps no example distills the essence of seller’s market quite like this recent home listing for an aging, 976 square-foot house in Mountain View. The single photo in the listing isn’t much to look at but it’s the only photo you’re getting and that’s all part of the plan.
In Mountain View: $1.6m for a 976 sq foot home you can't see inside of, and have to rent back to owner. For 7 yrs. https://t.co/Ra5qlnGKcW
— Louis Gray (@louisgray) September 15, 2017
Per the listing, you will not be provided any more photos. There will be no open house. You won’t be allowed to look inside. You have to make an offer before completing an inspection. You’re responsible for all repairs after you buy the home. Oh, and you have to rent it back to the current owner for seven years before you can do anything with it or the land.
Total cost? $1.6 million.
And you know what, they’ll probably get it or something close to it. Because ultimately the land that house is on is as valuable as any land in the U.S. right now. The chance to build a brand new house or a condo complex on that spot is a chance to make millions. In seven years, at least.
So if that’s the going rate for a dilapidated house, what chance does an average homebuyer have to ever afford something half-decent? And what is California doing about all this? Something, finally.
Late Thursday night, the California Assembly narrowly passed a set of affordable housing bills that would create a permanent funding source for affordable housing through developer fees as well as hold cities accountable for meeting affordable housing development goals. As-is, the incentives to ensure that affordable housing was a part of most developments was nominal. Now, in theory, developers will have to be accountable to the California cities and towns they build housing in and those cities and towns will have to be accounting to homebuyers who can’t afford to live there otherwise.
That doesn’t mean we’ll stop seeing listings such as that Mountain View one. But hopefully, it means we’ll start seeing more listings that aren’t insane.