
How much does it cost to build a home in Silicon Valley? (2016) - bckygldstn
http://www.themiyoung.com/single-post/2016/11/03/The-Guide-Costs-of-Home-building-in-Silicon-Valley
======
fernly
Had a chat with our insurance agent recently; she wants us to increase our
insurance coverage on our home in old palo alto, which is currently calculated
based on $350/sq.ft. rebuild cost. She said that clients in the burned-out
areas in Santa Rosa were being quoted much higher rates, and although she
admitted that was partly due to a large number of people competing for
contractors all at once, she believes $450 is a more realistic replacement
cost basis.

That would be also based on replacing the existing structure, which is single-
story, no basement.

What almost always happens when an older house is sold in this area, is that
the property sells for between 1M and 2M, is immediately scraped and replaced
by a two-story-plus-full-basement (with home theater and au-pair apartment),
which then sells for 6M-8M with a profit of circa 1.5M.

~~~
jdavis703
So based on that rate I should be able to easily purchase my ~550 sq. ft.
apartment. In fact the payments on a 30 year mortgage would be about
$1300/month. Clearly the problem is the price of land, made even less
affordable because of density maximums. If the price of a lot could be split
over 6 people, a lot more people could afford to purchase a house.

~~~
sjg007
Yes but your nimby neighbors won’t allow it. Also high end homes and condos
have higher profit margins, this is because finishing costs are cheap relative
to sale value.

------
pxlpshr
Maybe I'm missing something but it looks like she omitted general contractor
fees unless she rolled them into the sq/ft cost. Not that most people are
qualified but I know people who GC the projects themselves to save a great
deal of money. It's worth calling out as it's own item...

I found an up and coming architect so my design fees were substantially less
than my GC fees... by about 8-10x.

~~~
maratd
Square foot costs are only given by a GC, so that's already included.

> I know people who GC the projects themselves to save a great deal of money.

Do not do this unless you know what you're doing. One bad contractor (and you
will be hiring many) can trash the whole project. The value of the GC is that
he brings a stable of quality contractors that he knows and works with.

I've gone both ways, it really depends on the situation.

~~~
kqr2
Any advice on how to find a good GC? All the people I know who remodeled their
home seem to have horror stories. A couple of them ended in law suits with the
GC.

~~~
carllerche
I had good luck. As mentioned above, finding a good GC is not easy because
they do not advertise. It is entirely word of mouth.

I live in the pacific NW where there are a lot of old craftsman style homes.
High quality woodwork details is the theme.

I started by calling high end custom furniture shops and asked them if they
could do built in cabinetry work. They did not, but they recommended a number
of woodworkers that moved on from furniture into contracting (carpentry,
custom window sashes, storm windows, etc...).

Then, I asked them what GCs they have worked with in the past and which they
would recommend.

A few names came up often, I spoke with them, picked one, and was really happy
with the work.

I guess the tl;dr is, good GCs use highly skilled subs, so find the subs then
ask which GCs they recommend.

------
rootusrootus
I've always wondered what software developers make in the heart of silicon
valley. I see some things that basically say 'more than Portland but only by
maybe 50% or so', which means perhaps $180K or so? Nobody is buying a million
dollar house on that kind of income, but in Portland (where I think houses are
pretty expensive) someone making $120K wouldn't have any problem buying a
perfectly fine place, even pretty close in to the urban core.

Maybe I'm getting my numbers from the wrong place.

~~~
xenadu02
Senior should make 175-200k base plus 100-200k in RSUs per year rolling - that
is if you get a good initial grant and keep getting good reviews by year 4 you
have staggered vesting that nets that amount. At 300-400k per year you should
be able to live a good lifestyle while saving for a house.

Really senior engineers can certainly make more; 500k for a top 10% performer.

For reference I just got my tax statement for last year and I’m over 300k.

~~~
jmathai
I don't think that's what a typical software engineer makes. A Level 5 SWE at
Google makes that. But that is far from representative of the vast majority of
SWEs.

More likely, you can afford a $1m mortgage on a double income of $150k which,
IMO, is a lot more common.

The reality is that a lot of people (single and married with kids) rent with
the hopes they will be able to afford a mortgage.

------
empthought
Not sure what I am supposed to do with the extra 3500 square feet there...

~~~
matte_black
Movie theatre, grand dining room, home gym, steam room, VR room, office,
woodworking shop, wine cellar, etc. The possibilities are endless.

~~~
jacobolus
Not to mention living with all of your extended family under one roof,
starting a church or homeless shelter or disco club, stockpiling enough food
to outlast a zombie uprising, or displaying your collection of luxury cars you
never drive....

More seriously, in general single-family houses should be on the order of
1000–2000 square feet. The rest is typically a complete waste (nobody I know
who has a 4000+ square foot house actually uses most of the space – people
with real on-site wood shops etc. put them in a separate space detached from
their home, not in spare bedrooms), and serves to isolate households from
each-other, force a car-centric lifestyle, drive up housing costs for everyone
and force people working essential menial jobs to live far away and commute
long distances, cost much more public infrastructure than denser alternatives,
etc.

I have a several rich programmer friends (early facebook or whatever) who
bought outrageously large houses in Silicon Valley as a status symbol, but
work all the time, eat out every meal, and only go home to sleep. What a
tremendous demonstration of unthinking excess.

~~~
matte_black
I don’t know about you, but 1000-2000 sqft for a single family home with an
actual family in it is downright cramped.

You could turn a garage into a wood shop though if you don’t have a particular
need to store your car in a garage.

The point of a large home is to turn it into your own personal oasis where you
can spend days at a time without ever really needing to leave, and without
feeling bored. The thing is, many people just don’t know how to live in a big
house, because they spend so much time in cramped quarters until they can
afford a home. A big house is all about features. Every room is an opportunity
to have a space dedicated for something, if not for sleeping. Mindless excess
is dumb, but thoughtful excess is amazing.

~~~
jacobolus
Um... I grew up living in a maybe 1100 square foot house with 4 people and
occasional extended guests. It was a bit tight maybe (e.g. 2 kids in one
bedroom, some contention for the one bathroom), but “downright cramped” is an
exaggeration. I currently live with 3 people in a 1200 square foot condo and
it seems plenty spacious. 2000 square feet should be enough for a family of 8
or something.

My godparents’ family lived with a dozen people in a few mud-brick + straw
roofed rooms probably totaling 500 square feet, plus some outdoor space
between buildings. Now that’s cramped.

> _The point of a large home is to turn it into your own personal oasis where
> you can spend days at a time without ever really needing to leave, and
> without feeling bored._

In my opinion that is a depressing vain and wasteful way to live. YMMV.

~~~
matte_black
A small home is an equally wasteful way to live — a waste of opportunity.

------
johnny99
The comments in this thread focus on senior engineers, but a lot of the big
earners I know in the Bay Area aren't engineers--they may be in tech, but
senior BD, marketing, product, finance, legal, and especially sales people can
all make well north of $300k. At my last company the biggest W2's were all
sales people.

------
linkregister
This is an interesting article that describes building a $2-6 million dollar
house in a matter-of-fact manner. I wonder what the prospective audience size
for this article is in the Bay Area –maybe less than 5000 local people are
capable of affording these properties.

~~~
ikeyany
Don't underestimate the number of people out there who are far wealthier than
us 9-5 coders—people come from all over the world to buy property on the west
coast.

~~~
seanp2k2
[https://macropolo.org/chinese-real-estate-money-
transforming...](https://macropolo.org/chinese-real-estate-money-transforming-
san-francisco-bay-area/) there's a lot of foreign investment and money parking
happening in the Bay Area as well.

------
dpc_pw
Let me see...

I can either spend next 15 years, hoping that tech market doesn't crash again
and using my SWE salary to pay off property taxes and mortgage on a crappy SV
house, making rent-seekers of all sorts rich...

... or I can pocket the money, and be financially independent when I'm 35-45,
and spend rest of my life with family and working on interesting open
source/business projects of my choosing.

Tough one.

------
svp55
these numbers seem wildly inaccurate

~~~
cdibona
They're a little off, but not much. The problem is that most people can't
build a 5k sq ft place on a 7500 sq ft lot without going down as well as up.
Basements in the Palo Alto flood zones are crazy expensive to build and permit
so most don't do it, opting to stick to the sq ft requirements, which on a
7500 sq ft lot would be ... 3200?

5k would need a 10k lot in palo alto. A 10k lot in palo alto goes for 3m to 5m
depending on neighborhood.

So , yes, it's nuts.

~~~
Y7ZCQtNo39
In my opinion, 3200 sq ft is more than plenty for a single family (2-4
people).

