Right next to cupertino. It’s a $120k house on a $2.9million dollar lot
And they use the 3mil to buy a nice small house and outbid a working class family that currently live in a 2 room apartment
As a rental, obviously. No way they’d actually live there like poors.
Nah they get tricked by fox news ads into some business investing scheme that ends up triggering triple tax on themselves. They blame the immigrants about it.
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Fuck me dead that is not a three million dollar house.
The expense is land. Often, land location matters more in pricing than what’s on the land.
My landlord recently told me how much they think the place I’m renting would sell for, and now idk why the owners even bother renting to me because the price is like 50 years worth of my rent.
Because he gets a steady supply of money and then in 10-20 years it will be worth 100 years of your rent on top of the 10-20 they collected already.
The bubble could pop though and you lose out. The market has softened near us and there are people that have lost 100s of thousands in equity already, and are upside down in the mortgage
The bubble will inevitably pop as the boomers start dying and the housing supply relative to the population starts increasing. Plus no want wants to pay for the catchup work needed to address 30 years of deferred maintenance, so a lot of houses will go for cheap.
Exactly. Example: my dad’s house needs 3 new bathrooms, a new roof and repaint. Also new basement lighting and a new family room carpet. What people will be buying is the closeness to grocery, Costco, the highway, rural views, a lake, and a major airport.
This. I was going to mention the depracating property. Our place needs a new roof soon. I have seen people skip it as well as lots of other outside water shielding maintenance and the place is a rotten mess 50 years later
I feel like “lose out” is an overstatement. There are/were still steady rent payments even if the whole bottom falls out.
Of course, but a generation of homeowners grew up learning that, barring short disruptions, home prices always go up. Nevermind that this was largely due to interest rates steadily dropping since the 80s, reaching basically 0% during Covid.
Since there isn’t really room for interest rates to drop anymore people shouldn’t expect home prices to rise faster than incomes rise, but it’s going to be hard to undo 30 years of observation.
Well you see, he can take a loan on the equity, you pay the loan for him and he doesn’t have to pay any where near as much in taxes. You’re just helping out a landlord in need.
It’s because your landlord never paid for it. The bank did. You’re paying the interest on his loan.
They mean if they sold it now they’d have 50 years of rent now, instead of waiting 50 years to accumulate that amount. All that money now is worth more then getting it later.
Don’t forget taxes. All they have to do is “move in” for a year or so to get a massive tax savings on the sale.
I know what they meant.
Renting out properties is not about making tenants pay the same amount as the property is worth over any period of time.
It’s about having someone else cover the cost of borrowing the money while the property increases in value by itself until they decide to cash in.
I don’t think you know how loans work.
I think I do. I’ve been managing properties for some 20 years. Mostly commercial.
What I’m saying is that in order to understand why the landlord doesn’t just cash in on 50 years of rent, you first need to understand the difference between the profit/loss and assets/liabilities sections in a financial statement.
The tenants (income) are not paying for the building (asset). They only need to cover the interest (cost) from the loan (liability) in order for the the landlord to make money (profit).
The only time it makes sense to compare the rental income to the value of the asset is for the annual asset evaluation.
If the landlord waves the evaluation and rent around like OP says, it just shows that the landlord doesn’t understand it either and is just throwing numbers into the air to impress people.
$3M for 1,300sqft (120m²)…
That’s absolutely insane. You can get a proper mansion for that here in Scandinavia…
This area of San Jose is in commuting distance to Silicon Valley offices, where you can get very large pay packages upwards of $400,000/year (average for L5 at Google in the Bay Area).
Artificial housing scarcity (the zoning restrictions in San Jose are very strict) combined with the massive incomes in the area has led to the situation we see today.
Well, to be fair this in an insanely overpriced area of the United States. If Scandinavia was the size of pretty much the entirety of Europe you’d have price extremes as well.
For example if you look up a similar house in the Midwest of the United States (Illinois, Missouri, Wisconsin, Iowa, ect) this house would be under $200,000.
We have overpriced places to, just look around the capitals. That doesn’t have to do with sizes.
The oldest sale I could easily find was 1988, when it sold for $338,000 or about $956,400 today. In 1960 when it was built it likely sold for $15,000 and $22,000 so about $249,077 today. So from 1960 to 1988 it increased by 3.84x and from 1988 to now it increased by 3.16x. Wages increased by around 5.2x from 1960 to 1990 and about 2.4x from 1990 to 2025. In 1988 the house was 10.5x the average American families gross annual income. In 1960 it was 3.9x the income and today it’s 36x the average American families gross annual income. I didn’t really account for the area so the last part should really be done for California. Even today it’s not fair to lump in the economics of somewhere like West Virginia or Mississippi with California. Either way it’s probably more accurate to use the median instead of average.
San Jose is not considered Southern California. It is Silicon Valley.
visits silicon valley
no silicon in sight
mfw
Its all under the skin
Was there a valley at least?
It’s more of a bowl really.
The music video: https://www.youtube.com/watch?v=_cZC67wXUTs
Updated
Thank you for doing this research! It’s the first thing I thought of as well.
You’re welcome. I was curious. Pretty fucked. I redid the calculation for the median income of the area and the house is still 30x the annual yearly income. From 3x to 30x in 65 years is not good.
Asking 2 got 3. Did a corporation buy that?
The implication is that multiple buyers put in offers on the house, and someone placed a 3 million offer to make sure they were the winning one, or the vendor went back to the people who had put in offers and asked them to make a better one if they wanted to beat the other offers
Right. I had to get up in the morning at ten o’clock at night, half an hour before I went to bed, eat a lump of cold poison, work twenty-nine hours a day down mill, and pay mill owner for permission to come to work, and when we got home, our Dad would kill us, and dance about on our graves singing “Hallelujah.”
But you try and tell the young people today that… and they won’t believe ya’.
Nope, nope…
A Monty Python reference? In this economy???
“Just learn to kiss some ass. That man has the power to fire you! When he says come in on Saturday, show up on Sunday also too!”
– My Silent Gen parents, every goddamn day
Housing crash when?
It’ll never crash again. Private equity will buy every home and rent them back to us. Forever.
Then make sure private equity goes out of business
How?
Hopefully, violently.
The french have some interesting machine solutions
At this point, not without a bloody upheaval.
Not that I’m encouraging that. It sounds horrible. But still.
THERE were two “Reigns of Terror,” if we would but remember it and consider it; the one wrought murder in hot passion, the other in heartless cold blood; the one lasted mere months, the other had lasted a thousand years; the one inflicted death upon ten thousand persons, the other upon a hundred millions; but our shudders are all for the “horrors” of the minor Terror, the momentary Terror, so to speak; whereas, what is the horror of swift death by the axe, compared with lifelong death from hunger, cold, insult, cruelty, and heart-break? What is swift death by lightning compared with death by slow fire at the stake? A city cemetery could contain the coffins filled by that brief Terror which we have all been so diligently taught to shiver at and mourn over; but all France could hardly contain the coffins filled by that older and real Terror—that unspeakably bitter and awful Terror which none of us has been taught to see in its vastness or pity as it deserves.
You should all come to my town middlesbrough in the uk my 3 bedroom was just £91k in 2018.
We have like 9 jobs… so you have to share mind…
How’s the internet? Asking for a friend
We are just getting the good stuff, 1GB speeds. If you mean Mobile Internet then its much more patcy…
Mom says it’s my turn to pretend capitalism works for anyone but the rich!
Not much different in Germany either. What once was needed to buy a decent house is now merely enough for a tiny apartment.
I just recently sold one of my houses for 900k. Which I bought for 300k 25yrs ago. And it even was due for major renovations. Well, could have. Actually sold to them for 500. Didn’t wanna be an idiot but also didn’t want to rip them off. I did nothing of value to justify that gain. And they were very happy. Still unfair…
The market is broken.
“one of my houses”
Have you considered that you are the problem?
not everyone that has more than 1 house is a rich person. most of the time its people who had a generational house that wanted to move to another, while trying to pay off taxes or new houses by renting. its the airbnb, and corporate landlords that are the problem. Also rich nimby neighborhoods, a few years ago they blocked a low income housing in millbrae, and yes they were mostly white people. companies like blackstones, or real estate companies are raking in the dough and worsening the housing crisis.
and another incident, eventhough it looks wrong in similar area a company had bought hordes of VACANT houses and decided to let it sit there for years, and there was a whole incident mutliple squatters got in and forced the sale of the house to them after a long social media uproar.
the CURRENT people buying the houses like in OP pic are Transplants from other states moving here in droves.
Why? Unless you’ve got hundreds of millions or more, you’re just another poor sobbing bastard for the elite. Just a bit less poor than the others. Insignificant in everything.
Also, I paid double market-average for employees, with come-and-go-as-you-please and profit-sharing. Everyone.
I rent the houses/apts dirt-cheap. At the legally allowed minimum but with hidden added boni or paybacks or whatever else I come up with. Free power, free water etc. I don’t want to profit of someone else’s inability to own. I want to be able to look in the mirror without disgust.
And also I work for free in a shelter-thingie for abused or broken people, I help where I can.
If everyone would do that, we’d all be better off, wouldn’t we be?
What do you do to better society with the given means? Considering I’m the problem and you’re not? Egocentrism, narcissism, missing empathy and machiavellism (so basically the dark triad) are the root sources that rot the world (while being highly rewarded), not money.
I have a friend with five. He’s a traveling physician and has five practices each at least a hundred miles away from each other. I don’t entirely see him as part of the housing problem because he has a use for these houses that isn’t vacation.
Folk are mostly friends on here, so can you ease off the attack please?
I just recently sold one of my houses for 900k. Which I bought for 300k 25yrs ago. And it even was due for major renovations. Well, could have. Actually sold to them for 500. Didn’t wanna be an idiot but also didn’t want to rip them off. I did nothing of value to justify that gain. And they were very happy. Still unfair…
300,000 euros in 2001 is, inflation-adjusted, 512,000 euros in 2026. If you sold at 500k euros, you sold for slightly less than you bought it for in real terms.
It was still the same sum though. I got money, they got a house way cheaper than they planned for. Everyone’s happy. I see no problem?
Some loud Boomers aren’t all Boomers. There are so many I know who still need to work as they can to cover rent.
Not all boomers! 🤣🤣🤣
probably not most of them.
Who knows all of these boomers scolding anyone? I’ve never heard one say that. Do I only know or am I only related to nice boomers?
- It’s corporations buying up all of the extra housing
- It’s price fixing the rentals and housing through software they bought up.
You have nice boomers. Mine understand the inherent changes in the market since they were our age, but they still blame us for not doing what they did.
There’s a middle ground somewhere between the extremes… I was lucky that I got out of school at a still good time. But it still took sacrifice to get what you wanted.
Like sometimes I was cutting mold off the bread to make a sandwich for work, and only home cooked food, and no budget for entertainmentn expenses. It got us a two bedroom house for the, baby, plus car and motorcycle. That was on one salary, but I realize that ain’t happening today.
But also I have seen family members of the young generation order a smoothy on skip, purchase $300 concert tickets, while racking up debt…while complaining of cost of living.
They aren’t getting a 2 bedroom house on one salary with 5% down, but they certainly could be saving for one by making some spending adjustments.
yeah i don’t have any realistic way of saving the 20% down they want before i die.
And if that is the situation, at least skip some pleasantries and contribute to a fund that has growth so you can afford rent later in life. That’s the issue I see, people will get to 65 and have a tiny government pension that won’t cover groceries and such, let alone rent
Oh yeah, we’ve got one of the best government plans still available since my wife is a teacher and I’m fancy. We were a touch late for pensions (defined benefit), but we are right in time for defined contribution. Hoping we can use the money/die before it bottoms out
Something something avocado toast
