PALO ALTO (KPIX 5) — A humble abode in Palo Alto fetches more than $500,000 above the asking price — and it was marketed as a teardown.
Just when you think the Bay Area housing market has come back down to Earth, something like this happens.READ MORE: Vietnam Airlines Launches First Non-Stop Service From SFO To Ho Chi Minh City
Back in February, an 80-year-old, two bedroom, one bathroom home went on the market with an asking price of $1.9 million, complete with plate glass windows and linoleum floors.
But two months later, it sold for $2.55 million.
Eric Sundheim is an economist who has lived in Palo Alto for 30 years.
Sundheim said this is what happens when you have limited supply and increased demand.
“Obviously, it’s not about the house itself, since contractors are gutting it, and tearing out everything, from the pipes to the floors,” he said.READ MORE: Gov. Newsom Enlists California Highway Patrol To Help Stop Smash And Grab Robberies
In this area, it’s all about the lot, all 7,500 square feet of it.
And location. The home is three blocks away from Stanford University.
Michael Repka with Deleon Realty is an expert in the local market, but did not handle the sale of that house.
However, he says they’ve seen a spike in home sales, because of people trying to beat rising interest rates.
Also, there’s the Trump effect: people who are optimistic about the president’s new tax plan.
Repka said, “the high-end buyers are feeling their taxes are going to drop. They’ll have more money and they can afford more of a house.”MORE NEWS: COVID: Omicron Variant Has Some Bay Area Families Revising Holiday Travel Plans
Sundheim said, “Its certainly tough to imagine people affording this. Bottom line though, it’s a really great place to live. The people who can afford it are working hard and they’re good people and I don’t begrudge them for wanting to live here.”