Vol 198 - "First Class" is Pricey Real Estate!

My husband's friend George emailed me a picture of Cliff last week, enjoying the luxuries of first class (First Class!) on his way from London to Johannesburg; final destination - Botswana, Africa.  

I should preface this by saying that George and his wife Linda had visited the Bay Area over the 4th of July weekend and during dinner, George had casually mentioned that he and his son were headed on Safari and would Cliff care to join them?  For the price of a plane ticket, Cliff could experience a "once-in-a-lifetime" trip in the Kalahari Desert, visit Victoria Falls and see the animals in the wild. George had already covered the cost of the camp and Cliff could tag along for relatively little. (That's certainly too good an invitation to pass up.)  Still, Cliff was uncertain. Between work, the boys, and me, he's incredibly thoughtful about his priorities.  Could he really shelve everything and prepare with so little notice?

"You should go," I told Cliff. "When will this opportunity ever come up again?" (With one son in college out-of-state, and another following on his heels, it certainly won't be anytime soon.) "None of us is guaranteed tomorrow - GO!"

George and Cliff met in high school (well before Linda, I, or the kids  came along) and have always maintained a very close friendship - in spite of the distance and the intervening years. Of course, he should go.  I'd stay behind, tend to the fires at home, earn a living,  and shepherd the kids back to school. (No, I'm not bitter - plus, I wasn't invited.)

All that was left to do was buy the ticket, and then some khaki "Indiana Jones" type cargo clothes online.  Logging onto Expedia.com, we checked out "business class" airfare and promptly dismissed it.  At $9,000, it was more than our pocket book could accommodate and three times the cost of the ticket Cliff would eventually purchase.  Never mind the discomfort - that's why they invented Advil.

Fortunately for my husband, George asked his son to trade seats with him during one leg of the journey and George's son, nicely complied (that's a boy who has been raised right). Which got me to thinking, just how much per square foot is the price of first class?

I'll tell you - a first class ticket to Johannesburg from San Francisco is $14,399 - plus tax!. (Yeah, I know no one actually pays for first class -they upgrade - but still . . .  really?) That factors out to nearly $596 a square foot. Wow!  That's a lot of mullah for a seat (no matter how cushy) and more than the average home price in Piedmont! No wonder British Airways supplies the champagne. For that kind of money shouldn't there be a Grant Deed?

I'm certain that's how my clients often feel when they are looking at the price of homes here in the Bay Area (they're a lot of mullah!). No two ways about it, homes are expensive  - especially if you're relocating from somewhere else outside of California and facing sticker shock.  So it's only natural to want such a significant investment to "math" out.

I've talked about the "price per square foot" equation before and how homes aren't really sold on the basis of square footage (they're sold emotionally) but nevertheless, it's hard not to think in those terms. As consumers and borrowers, we know the bank and their appraisers, begin their assessment of a property's value, based on square footage before factoring in condition, finishes, location, etc. And while your property taxes are based on your original purchase price, any upward assessments to be made are ultimately based on the square footage of your home and how it compares to nearby sales. In short, size matters.

 

So if you're looking for "fixers," my advice to you is to buy the biggest dump you can afford and if you're looking for "turn-key" properties, understand that you're essentially buying "first class."  Sure, you will be a lot more comfortable on the journey, but you'll also pay a premium.  (Where's the champagne?)  And if you're looking for a comfortable plane ride, it helps to have a very generous friend (Thanks George .)   

Hey, Cliff, don't get too used to "first class."  We're definitely living "economy" back home - and don't forget the souvenirs (you're going to owe me big time)!

　

Ahhh . . .  this is living!

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