[andrewstuart2]

Working at a huge tech company like Google or Facebook is attractive to me, but not enough to justify spending $2.5M on a smaller house, or 12x more per square foot. And this is just in Phoenix. I know there are other places with tech jobs and much lower cost of living, or better income-to-COL ratios.

[aqpgreendragon]

They aren't paying that much for the house. They're paying that much because it's located in a good area. They'll knock it down and built a brand spanking new house and sell that for a profit. This happens every day in hot real estate markets

[Balgair]

Depends on the HOA, if there is one, and the city planner's office. You may not be able to do so at all or the new house may be very expensive, especially in a place like Sunnyvale with 'green' building codes and state earthquake laws. I mean, yeah, that's still chump-change for a $2.5M lot, but those HOAs will get you.

[brianwawok]

The description kind of hinted the lot would be big enough for 2 houses. Would the local lets law you flatten the house, build 1 house to live in on half the land, and say sell the other half of the land for a million bucks to a developer?

[hkmurakami]

You go through a city planning commission to do the sudivison.

[methodover]

Startup idea: Let people pool money to buy larger lots and do exactly this.

[vasilipupkin]

exactly

[BoorishBears]

> but not enough to justify spending $2.5M on a smaller house, or 12x more per square foot.

Maybe it's just the wording but I don't get that. If they're paying enough that 2.5M is within reach where it wouldn't be in Phoenix is it really a problem?

I'm in the middle of a job search right now and I'm finding that while absolute numbers sound appalling (ie. 2.5M for a 2,000 sq.ft. house) the income:COL is not as dramatic. I rent, but so far places that have high-end apartments that cost 2x what my current one does pay about 2x more (usually even a bit more) on average.

To me it comes down to wether you'd like to live in Sunnyvale or Phoenix as long as the companies in both locales are paying enough to afford comparable housing (I wouldn't expect identical square footage). Remember we're talking about a 2.5 Million dollar home 1 mile from what is probably one of the most advanced tech campuses on Earth (and probably has some of the best paid).

When you put it like that I don't think it's hard to see why some people would sacrifice a little square footage for living and working at a place like that over Phoenix in an instant (I know I would).

[vasilipupkin]

No, you people don't get it. That house is on a large lot. You could knock it down, build a much bigger house for a 1 million and have a 4-5 million dollar house for 3.5 million. it's a good deal.

[BoorishBears]

I do get that, 2.5M for that plot is still a large amount of money.

The point is that even a 3.5M for the new house will be a lot, but by virtue of it's location and salaries at Apple it's justifiable

[dsp1234]

Here is a snapshot of sales of lots that are 10.000 to 20.000 sqft sold in the last 3 months:

https://www.redfin.com/city/19457/CA/Sunnyvale/filter/min-lo...

2,5M, with respect to the existing market, doesn't appear to be out of the norm.

[BoorishBears]

It's not a lot relative to Sunnyvale it's a lot relative to the US

The idea being Sunnyvale can justify that with salaries and the employers in the area

[sjg007]

This is why everyone wants Amazon HQ2.

[tryingagainbro]

They might have tens of millions and think that the house will retain and probably increase value. Greater fool theory.

You are not buying this with a $150k salary.

[coding123]

Yep this was bought on an upswing that will be impossible to sell at this value again for 100 years.

[rconti]

Much lower cost of living / much better income-to-COL ratios? Better sure, but I don't know about MUCH better. Arizona is famously inexpensive. Sure, you might be comparing to the midwest, but there I'm not sure there are the high paying jobs there to support the "much better income-to-COL ratios" claim.

[maxerickson]

I imagine the calculation is more like risking $1 million out of several million of assets.

There is always the potential for a crash in the housing market, but it can also end up that the $2.5 million is a winning investment (as compared to being spent).

[tehlike]

you tell: https://www.paragon-re.com/trend/3-recessions-2-bubbles-and-...

[angryasian]

i'd rather be dead in california than alive in Phoenix

[2600]

Can you extrapolate your thoughts on Phoenix real estate?

[valuearb]

I have a 50% bigger single story custom house on a 50% bigger lot in a really convenient location with virtually no traffic in one of the most sought after cities around Phoenix. It's worth $700k.

You can get a decent house in a nice location for $400k in Phoenix itself.