From the San Jose Mercury-News:

Modest Bay Area homes hit mind-boggling prices By Pete Carey pcarey@mercurynews.com … With the price of homes in Palo Alto skyrocketing, Ken Plourde, a 79-year-old retired jazz bass player, decided it was time to sell the home he bought for $35,000 in 1970. “I was sitting on a gold mine,” said Plourde, whose income from music gigs has been declining with his advancing years and changes in the live music business. The 992-square-foot-home within walking distance of Stanford University was snapped up in one day by a wealthy Stanford graduate in China for $3 million, a price that comes to just over $3,000 a square foot.

No mention of the size of the lot in the article. It’s probably pretty big by suburban California standards, but suburban California tends to have small lots.

Update — nah, it’s a very narrow lot, although modestly deep. I was going to credit Mr. Plourde for being the all time winner at the Worst House on the Block strategy, except that his neighbors on either side look like they’re playing that game too. They’re no doubt scoffing at Mr. Plourde right now for selling out when a few more years of not watering their lawns and somebody will pay them $5 million to go away.

Looking at Old Palo Alto on Google Maps, the lot sizes are not very big. Steve Jobs lived in Old Palo Alto: Mrs. Jobs liked what’s basically a typical old suburb where the kids can walk to their friends’ houses. I think the Jobs house is between 5k and 6k square feet. Having a bigger house than that is a good idea if you are going to start letting your extended family move in with you, but I can’t imagine Steve Jobs putting up with that. I vaguely recall that they bought up one or two adjoining houses and demolished them to give themselves a bigger yard. I believe the Zuckerbergs live in the same neighborhood. I believe he traded up from a house around 3k sf to maybe 5k?

“They’re going to flatten it, but what the hell, I can’t do anything about that. Life goes on,” said Plourde. “It’s a fortune to me, for a guy who’s never made more than $30,000 a year.”

Spillover from the intense demand for the 94301 ZIP code known as “Old Palo Alto” is helping drive prices up along the Peninsula as buyers scramble for desirable homes. … Real estate agents say two groups are leading the pack of home shoppers in Silicon Valley: newly wealthy tech workers and overseas buyers, particularly from Asia. “We’re just getting an influx of Asian money, and a lot of money from China,” said Plourde’s agent, Dan Robinson of Today Sotheby’s International Realty. “They don’t mind paying for something, but they want a good investment.”

Proposition 13 was passed in 1978 to let old people stay in their homes, so California neighborhoods have a surprising amount of income diversity.A lot of this is money laundering. People in China don’t really think this house will rise in value, but Old Palo Alto won’t lose much value.