Zero Hedge
0
All posts from Zero Hedge
Zero Hedge in Zero Hedge,

Palo Alto Outdoes Itself

As many of you know, the real estate market in Palo Alto has been going bananas for years, particularly recently. I've written about this phenomenon hereherehere, and - my favorite - here.

I've lived in Palo Alto since 1991, and at the time, it was a terrible stretch for the very-young Tim to buy a house in town. In retrospect, it was one of the greatest (and few) "long' positions of my life, since it's worth about twelve times what I paid for it back then.

I sure wish I could buy a put option on it, though, because we've got to be at some kind of zany top, given the front page headline on this morning's Daily Post. Here ya go:

So, as you can see, the (very well-compensated) new CFO at Google purchased a house in town for $30 million, a record for the city. (It's also good news for the school district, since Ms. Porat will be shelling out about $350,000 in property tax per year in perpetuity).

Before you think to yourself what a grand palace it must be, and on such a stunningly huge plot of acreage, let me disabuse you of this notion: this house is 4,700 square feet, and it is on a plot of land smaller than a single acre. There are two really nice neighborhoods in town: Crescent Park (which is where I live, thank you very much) and Old Palo Alto, which is where the above house is located. She's a block away from the ghost of Steve Jobs. It's a lovely neighbhorhood, to be sure. But...........thirty million dollars???

One interesting tidbit I learned about the house is that it's been unoccupied for..........twenty years. Its owner, the billionaire John Arrillaga, bought the house in 1972 for a million bucks, and although he lived there a while, after he moved out, he just let it sit vacant. (I guess when you're a billionaire, foregoing rent doesn't really matter). He says he was waiting to sell it to someone "with a family", and although I suspect over the past twenty years a few non-single people have moved into town, for some reason he chose Ms. Porat as the perfect buyer.

Speaking of Porat, here's a tidbit about her, too: according to her Wikipedia page, "During the financial crisis, Porat led the Morgan Stanley team advising the United States Department of the Treasury regarding Fannie Mae and Freddie Mac, and the New York Federal Reserve Bank with respect to AIG." A dubious achievement, if you ask me, but given the fact that she is paid a salary that in the span of five months equals the above house price, whatever she's doing, she's doing right. All the same, this is insane.