Over $2000 a month in property tax.
Not sure where you got that number, but no. At 0.794%, taxes will be a mere 15,800 a year, or about 1300/month.
eta, added link
Close to work. Someone is paying to reduce their commute. But insane prices are everywhere. I live in, well, not the worst part of San Jose, but adjacent to it. Yet houses on my block are being sold for a million dollars. These are not big houses, either, nor are they near anything nice (and you get to deal with gangs and homeless people screaming obscenities at you). A newly listed place is asking for over $600k, but will probably be bought by a developer, fixed up (it’s in terrible shape) and sold for 800+. It’s smaller than the above house. They call it two bedroom, but only because a walk-in closet is being counted as a bedroom. There’s really only two rooms in the house (and no room to expand).
I don’t know how anyone lives here, anymore. How can anyone buy a home? How can anyone afford rent, even? There was just a story about new dorm housing in San Francisco for middle class workers (e.g. teachers); renting single rooms can cost over two thousand dollars a month. Income inequality (thanks to tech) has totally destroyed the quality of life for everyone, including the very wealthy.
No, just monstrous housing prices all over the Bay Area that continue to rise.
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A good round up:
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See also:
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That calculator might not be exactly right.
2017 assessment: $708,606
https://payments.sccgov.org/propertytax/Secured/Address, APN: 198-37-045
Tax paid: 4,289.78 x 2 > $8000.
He paid $500K more than the price of the home but that’s not excessive. I see you and I have different ideas of what excessive is. For me, when you overpay more than the yearly salary of 11 average people, it’s excessive.
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If the home was 2,000 sq feet so he “only” paid $1,000/sq foot people wouldn’t be batting an eye. Nobody has said recently that Silicon Valley’s housing situation is sane. In this case the value of the house is basically nothing compared to the land.
This guy almost certainly overpaid, but probably not as much as people think. A house in that location is almost certainly going to end up in a bidding war and go over the asking price. This guy cut it short and bypassed a lot of the bullshit. I’m sure the sellers were thrilled.
And if my aunt was my uncle she’d have balls. Unfortunately we can’t react to the more interesting “what could have happened” and are forced to react to the mundane “what did happen”.
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something something incubator.
See, that was the part that makes sense. I have a near two-hour commute each way by bus, but my housing cost is very low. His calculation is opposite of mine, but I can’t say I blame him. At worst, he sacrificed money for time.
@Glaurung I’m not sure what “effective” property tax rates are; that site you link to doesn’t seem to give a definition. But when you buy a place here in Santa Clara County (in California, actually), your tax starts at one full percent of the sales price, which here would be $20k a year. Then you add in the Mello-Roos and other local taxes, for things like school bonds, sewer, whatever else gets thrown in, then that site recommends using 1.25% as a closer indicator as to what you will face.
This is public info, and the extra local taxes on this parcel is only about $300 a year, not bad for Sunnyvale. So yeah, about $1700 a month.
It means the actual percentage of your home’s assessed value you pay, which is not necessarily the same as the millage rate.
For example, a lot of places exempt the first $X,000 in value. Let’s say the residential property tax rate in my city is 1%. If my house is assessed at $200,000, but the first $50,000 are exempted, then my effective property tax rate is 0.75%.
The same thing applies to income tax rates. A lot of people will see that they’re in the 28% tax bracket and (all evidence to the contrary) genuinely believe they pay 28% of their salary to the feds in income tax, even though their effective tax rate could easily be less than half that.
I think we need a new Georgist movement. I find the Silicon Valley real estate phenomenon incomprehensible. What happened to that telecommuting work revolution these very IT companies were promising for decades? How the hell does location still matter so much in the Internet era?
We have the technology to setup virtual offices from anywhere. We can create digital window-walls continuously linking rooms thousands of miles apart. With telerobots we can explore the seas, mine the Earth’s depths, or build outposts on the Moon from the shirtsleeve comfort of a CAVE in any office space. Digital Nomads are routinely running businesses by laptop from wherever they feel like. Yet here someone will spend 2 million dollars for a banal little house in a squalid suburb just to be close to a mere job? What weird arcane rituals go on in these offices that need people physically there so badly? What century is this?
I had to look that up, too. Got it.
Hmm. I don’t think that happens in California, at least not as far as I can tell in Santa Clara County. There is a personal exemption of $7k, but that’s peanuts compared to bay area property values.
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