The $1.7 Million Tiny Home

Hey, did you hear about the $1.7 million tiny home?

It’s a listing (a Compass listing, natch) that’s gone viral, because people the world over are shocked that anyone would try to sell a 384 square foot house for $1.7 million. A tiny home that was built in 1948, and from the looks of it, is entirely unremarkable. Yet the owners are asking $4,424 per square foot for it.

Of course, there’s more to the story. First of all, it’s not actually a tiny home. Sure, it’s a small home, but when people talk about “tiny homes,” they are generally referring to the latest fad in affordable housing: small mobile homes designed to be parked, say, in a back yard to create instant, affordable housing. This $1.7 million house is not that, but calling it a “tiny home” with a $1.7 million price tag is the magic sauce that helped spread the story from coast to coast.

Next, there’s the fact that what’s being sold isn’t really the tiny home. It’s the 7,841 square feet of dirt that the tiny home is sitting on. That’s the real value here, because even though the house is totally habitable, it is surely going to get bulldozed. Having a 348 square foot house on a 7,841 square foot lot could hardly be considered the highest and best use of the land. It’s pretty much imperative that it be scraped.

And, of course, there’s the most important detail of all: location. The house is in Cupertino. Need I say more?

Probably not, but I’m going to say more anyway.

My eyes are getting tired from constantly rolling when I read about people being shocked about what buyers are paying for seemingly overpriced real estate around here. But would they be so shocked if this were a 384 square foot home on a 7,841 square foot parcel in the upper East Side of Manhattan? No. Beverly Hills? I think not.

Have you been to Cupertino lately? It’s nice. The streets aren’t paved in gold exactly but obviously, the town has a lot (and I mean a lot) going for it. It is certainly a premier location, and I personally would much prefer to live there than in Beverly Hills. Manhattan, on the other hand…well, I love New York.

But this all goes to underscore what I always say is most important about real estate. It’s what anyone is selling, really: location, and lot size. The “lot size” bit is more true than ever with the advent of SB-9 in California, making it “super easy” to split an “urban” lot and create more housing.

Yes, the house on the lot matters too – if only because it is the vehicle that allows you to get a (relatively) easy low-cost bank loan to buy the place. And I do say the third most important thing when buying is square footage – because unless you’re extremely liquid and have plenty of time on your hands, adding square footage (or razing the house and starting from scratch) is going to be expensive and time consuming. Which apparently isn’t going to be a problem for whoever just shelled out $1.7 million for that “tiny home” in Cupertino.

Well, to be clear, nobody has shelled out $1.7 million quite yet. The property did go under contract after just six days on market. And the word on the street is that they received a total of eight offers, and that is under contract for “considerably” more than list price (I’m thinking it’s going to close over $2 million).

If you’ve got a home to sell in the Bay Area – any home, regardless of size or condition – know that it’s built atop a mountain of money. There’s no home that can’t sell, regardless of size or condition. If you’re looking to make a move, there’s hardly been a better time to do so.

Please feel free to contact me any time to discuss how you can make your next move the best one yet.