Median California House Price $798,440

I have a friend that sold her Mom's "house" in LA for $2MM.

I put "house" in quotes because the 2300 sq ft, 3 bed, 3 bath house on a 1/2 acre is essentially an uninhabitable shack. As Mom aged and the house began to deteriorate, she just closed off rooms, ran extension cords to where she needed electricity, used space heaters when the furnace failed, etc. There was not a single picture of the interior in the listing because the only viable option is a tear down.

"Build the dream estate in one of the most sought after pockets in the area. A landmark, half acre estate steeped in the illustrious history of this fabulous neighborhood, the property beautifully bridges the aesthetic divide between structure and nature. A property residing in divine harmony with its natural, verdant environment filled with majestic trees, splendid gardens, greenhouses, ponds, pathways and nature walks."

Translation of this creative writing exercise:

Tear down the shack, clear the overgrown vegetation and start from scratch.

Comps in the area are $3.5 - $4MM. Huge houses, pools, beautifully landscaped, etc. This property has a long way to go to before it'll be worth anything in that range.

If California is anything like Florida a teardown like that may be preferable to a fixer upper, both in cost and hassle. The new house will be at the current code (weather for us, earthquake for you) so insurance should be lower, much lower here, like half as much or less. Homeowners, wind and flood on my FILs house we sold was going to be $10k a year for $250,000 coverage. A current code house that size is $3000-3500. You also get the house you want. If you are comp'ing to $3.5-4m, a meg and a half or two should build you a castle. The wild card is greasing the government (permitting and impact fees). You also may need a place to live while the builder is ignoring your house. My wife screams every time we drive by the house they are screwing around with on our street.

In some areas the land is worth more than some of the shacks. In Charlotte NC a few years ago there were some shacks on about 1/4 of an acre in town that were going for $ 300,000 and up. Complete teardowns. They are probably worth more now with the upwards in priceing.

We all give thanks 24 times a day that it is not anything like Florida.

That is why we have 50 separate states. I wouldn't want to live in California. Places like LA and San Francisco are not even worth visiting and I have been to both many times. The mountains are nice but loved to death.