Asked by Lostpassword2, Palo Alto, CA • Thu Jun 23, 2011
I hear realtors saying Palo Alto is on fire. One even took out multiple ads in the local paper proclaiming this. And you know, I see some evidence: 262 N.California sold for $100K over asking at $1,268,000 for a totally outdated, junky place (Ioved the way the master bedroom flowed into the...garage) on a small lot at $1,366/square foot.
But then I see much nicer 865 Forest finally sold at $1,037/sq.ft. after 2 months on the market for $75K LESS than its previous 2009 sale at $1,675,000 for a loss of at least $165K over two years when you include realtors fees. That's $7.5K/month for 22 mo. of occupancy, not including the $8K/month interest the sellers ALSO would have paid for a loan. But since it appears they actually bought w/cash, it works out even worse: during that period, the S&P increased 43%, which means had they simply parked that $1,675,000 in an index fund they'd have $720K more, or $32Kmonth. All told, the cost per month: $48K. Brutal. What am I missing here?
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