I view this as a $1.8 million dollar tax for owning a home in Silicon Valley. The average house in Michigan sold in 2017 for $118 per square foot or a little over $100K for a house that size. Even in a nice affluent Michigan suburb with great schools I couldn't see paying over double that amount.
I was just out in the Valley a few weeks ago. Absolutely love it out there but that's just crazy. As usual I think DHH put it best in a tweet:
The size of the house is irrelevant. It will almost certainly be torn down. The sad thing is that the buyer will be building their dream house in a vast sea of tract housing and ugly commercial strips. Oh, and one orchard.
To be fair, it's freshly painted, and the water heater was just replaced last year.
I can only assume this is to somehow launder money from China?
That house is a small single storey building with only a ratio 33% internal floor space vs plot size.
Here is what $2m house looks like it good neighbourhood of Tokyo https://www.homes.co.jp/kodate/b-75250036569/ 2100 sqft (195.75m²) of internal floor space squeezed on to a plot that is only 960 sqft (89.26m²). That is 218% ratio.
Is that the typical building density in Silicon Valley? If so, then not surprising it is so expensive. In Tokyo that plot might get divided into 3 and three good size family homes built on it.
From the satellite view on Google Maps it would appear this building uses only a third of the land of its plot. So maybe plot is about 2550 sq ft.