If there is any real estate market more terrifying than San Francisco's, it may be Palo Alto's, a place where modest ranch houses can sell for $5 million or more. Last February, a four-bedroom home in Old Palo Alto hit the market asking $6.5 million. The house was designed back in 1937 by William Wurster, who was known for building small home that felt much bigger than their size. (He was also the architect of a Pacific Heights home that sold for 62 percent over asking last spring.) The Palo Alto place—which needed some work—didn't hit those levels, ultimately selling for $5 million. Instead of renovating the old structure, the buyers tore it down and started again, building a 6,000 square foot, six-bedroom "Napa-style ranch house" that is now on the market for $10 million.
The quick turnover seems a bit crazy, but is almost to be expected in Palo Alto, where a 610-square-foot one-bedroom recently sold for $5 million, putting it at a jaw-dropping $8,197 per square. The value in Palo Alto is clearly in the land and the opportunity to build something new, as has been done on the site of the old Wurster house. While the previous home was modest and blended neatly into its leafy surroundings, the new one is pure luxury. The entire living room opens up into the backyard with a set of floor-to-ceiling folding doors. There's a huge stone outdoor fireplace, dramatic landscaping, and an open great room threaded with skylights.
· 1935 Webster Street, Palo Alto [Redfin]
· Pac Heights Home Sells for a Jaw-Dropping $1.405M Over Asking [Curbed SF]
· 1321 Bryant Street, Palo Alto [Zillow]