u/lekranq

I pulled 5 Peninsula closes from last week and ran the spec build math on each. None of them clear a normal return. The interesting bit is which assumptions you have to bend to get the numbers to work.

Sample:
Recent closes under 2,100 sqft, over $1.5M, on lots over 5,000 sqft, across 8 cities (RWC, Burlingame, San Mateo, etc.). These are land buys on purpose.

  - RWC: $1.77M (1,490 sqft on 7.4k lot)
  - RWC: $1.70M (1,000 sqft on 6.3k lot)
  - RWC: $2.80M (1,715 sqft on 7.5k lot)
  - Burlingame: $3.15M (2,017 sqft on 7.1k lot)
  - San Mateo: $2.85M (1,910 sqft on 10.9k lot)

​C​alculations:
Land is the only observed number; the rest is choosing your own adventure. I used:

  - Buildable: 0.40 FAR (my own default, not any city's code) to 0.60 FAR (aggressive).
  - Hard Costs: $800–$1,200/ft.
  - Carry: Computed at 8% interest on land + half of hard costs + property tax. This runs $20k–$35k/mo, not the $15k people guesstimate.
  - Duration: 18 months. My permit data carries an issued date but no application date, so real application-to-approval timing is estimated.

​C​eiling:
Then you check it against what a house that size actually resells for. RWC's top $/sqft this year is $2,547, but that's a 1,070 sqft house and small houses always run high per foot. Match the band to what you'd actually build (2,500–4,500 sqft) and the best I have on record since last October is:

  - RWC: $1,827 (70 sales)
  - Burlingame: $2,057 (55 sales)
  - San Mateo: $2,104 (52 sales)

Verdict:
At 0.40 FAR (floor area/lot size) and $900/ft hard costs, against those ceilings:

  - RWC ($1.77M): +2.0%
  - RWC ($1.70M): -2.8%
  - RWC ($2.80M): -16.5%
  - Burlingame ($3.15M): -14.2%
  - San Mateo ($2.85M): +13.5%

Nothing clears 25%; three are negative.

How to make it work:
You can't just change one lever. For the $2.8M RWC lot, moving to 0.60 FAR alone only gets you to +0.8%. Even stacking all four levers - 0.55 FAR, $800/ft, 12 months, and 6.5% money- that lot still only reaches +7.7%. It never clears. The two that do clear at that corner are the cheaper RWC lot at +28.4% and San Mateo at +43.5%.

Question:
If you've built recently in these areas, what did your hard costs per foot actually come in at and how many months did you carry? These two variables move the needle more than anything else, and they're the ones I'm having to estimate rather than get real numbers.

Happy to share the full cost stack or the resale comps I used for the ceilings if anyone wants to check the math.

I put two wallets' Aave history through one of the big crypto tax tools back in July. It marked the deposit and the withdrawal both as Exchange, so a taxable sale in each direction.

I asked in a tax sub and someone from one of the tax software companies answered. Their rule is that if the token you get back has a materially different value than what you put in, it counts as a disposal. He said aTokens qualify because they accrue interest and aren't 1:1.

That doesn't seem correct. Standard aTokens are 1:1. Your balance goes up as interest accrues, the redemption rate doesn't move, 1 aWETH still gets you 1 WETH. The token he's describing is the wrapped/static one, which is ERC-4626 and works off an appreciating exchange rate instead. Both are Aave, both have their own contract address, and under that rule they should get opposite treatment. I asked whether their classifier tells them apart and he said he wasn't sure and would have to test it.

Anyway, if you deposited ETH you'd been holding a long time, having that booked as a sale means you realize the whole gain right there.

Has this actually hit anyone here on a return you filed? Mainly want to know whatit did to the number. My own test was a watch-only import with no purchase history behind it, so it came out to basically nothing, which is why I can't answer this one myself.

I work on onchain data stuff, hence the interest. Can paste the tx rows if anyone wants to check my read.

US filer. I ran two public DeFi wallets through one of the mainstream crypto tax tools in July. Both directions of the Aave wrap came back as Exchange, so the deposit and the withdrawal were each booked as a taxable disposal.

Caveat on my test: free tier, no purchase history behind either wallet, nothing corrected by hand. Not how your data arrives if you have exchanges connected, which is why I am asking rather than concluding.

If you have actually filed with one of these tools, did a lending deposit or an LP position come through as something other than what it was, and what did it do to the number?

I work on teardown and spec-build deals on the Peninsula and I check sold comps regularly.After researching prices, lot sizes, and house sizes, I came to a rather surprising find.

TLDR: you are paying for the house. Fifty percent more land added about 4 percent to the price. If you're choosing between two listings, the extra yard size does not cost you what you'd assume.

If you buy a lot to demo and build a new SFH, the general wisdom is that price per square foot of house is a retail number and price per square foot of lot is the real one. So I tested it on 316 single-family sales across eight Peninsula cities in June and July, and it's not what the market does:

• Elasticity to house square footage: +0.73 (standard error 0.04)
• Elasticity to lot square footage: +0.11 (standard error 0.04)

House size on its own explains 68 percent of the price variation inside a city. Lot size explains 33 percent on its own, but almost all of that is borrowed from the fact that bigger lots hold bigger houses. Once the model already knows the house size, adding the lot raises R-squared from 0.683 to 0.691. Under one percentage point.

There is a real effect from lot size, but it's just about seven times smaller than the house effect. Across a single city, prices are highly more dependent on house size, not lot size.

• Go from a 1,500 to a 2,500 square foot house on the same lot: price goes up about 45 percent.
• Go from a 5,000 to a 7,500 square foot lot with the same house: price goes up about 4 percent.

So why is land so cheap at the margin? The likeliest answer is that you aren't allowed to use it. Peninsula cities cap what you can build through floor area ratio, lot coverage, and setbacks, so past a point the extra lot square footage is yard you can never build on. You might love that yard, and it still doesn't convert into finished square footage, which is what the price is actually tracking. I can't prove that mechanism with sales data alone. It's the explanation that fits, and it's why I'd check a parcel's zoning before I believed any lot-size premium.

Stack those two together and you get the comparison that made me go back and check my work. Take a 2,500 foot house on a 5,000 foot lot, and next to it a 1,500 foot house on a 7,500 foot lot. On these coefficients the second one comes in about 28 percent cheaper with 50 percent more land. Smaller house, bigger yard, materially less money.

To be precise about what that is: it's what the model implies for two otherwise-average houses in the same city, not two specific sales I can point at. The condition caveat below matters here.

If you're just buying a house to live in, the useful version is that the big-yard listing is probably not costing you what you assume, and if you're selling, that extra land is not paying you what you assume. If you're buying to demolish, it's sharper than that. You're paying a premium for square footage you intend to send to a landfill, and the land you actually came for is the cheap part of the bill.

Here's what that looks like on five real sales, all of which closed on July 24th:

City	Price	Home sqft	Lot sqft	$/lot-sqft	$/home-sqft
Burlingame	$2,750,000	2,053	5,398	$509	$1,340
San Mateo	$2,121,000	1,530	5,002	$424	$1,386
Redwood City	$1,675,000	900	5,100	$328	$1,861
San Mateo	$2,285,000	1,769	7,609	$300	$1,292
Burlingame	$1,900,000	1,550	7,500	$253	$1,226

The two Burlingame sales are 2x apart per lot foot and 9 percent apart per house foot. But the sale that stands out at is the Redwood City one. At $328 a lot foot it looks like the cheapest land on the list, 40th percentile for that city. Per house foot it's $1,861, the 97th percentile. One transaction, and depending on which number you pick it's either a bargain lot or the priciest house in town. A 900 square foot cottage will do that every time, because the price per foot of house climbs as houses get smaller.

Now the objections, because they're fair and I'd rather raise them than have them raised for me.

• Small sample size - only 2 months. My Peninsula coverage is 132 sales in June and 180 in July and almost nothing before that. Longer windows barely move the coefficients, but that's the same sales being counted again, so it's a consistency check and not independent confirmation.
• No home condition controls. I don't have year built, condition, or finish level. Bigger houses tend to be nicer houses, so some of what I'm calling a house-size effect is really house quality. I can't separate the two with what I have, and that's the caveat I'd attack first if this were someone else's post.
• I'm not claiming land is worthless. Burlingame's lot coefficient came out slightly negative, but the standard error is larger than the estimate. Pooled across the eight cities the lot effect is positive and small.
• Cupertino stands out. Eighteen of nineteen cities I checked show a tighter spread on the house metric, but not Cupertino. On a measure less sensitive to outliers it's sixteen of nineteen.

If you want to run this on your own street, here's how.

1. Get sold comps with both square footages. Sold prices, not asking prices. Take the lot size from the county assessor's record rather than the listing, because listings round it or get it wrong. Skip condos and townhouses, where lot size means nothing.
2. Don't compare the ratios. Run a regression. Dollars per lot foot and dollars per house foot both divide by lot size, so both will fool you the same way. Price against house size and lot size separately won't. It's twenty lines of code, or one spreadsheet function.
3. What it means if you're buying or selling. House size moves the price about seven times harder than lot size does. Buying: the listing with the big yard is priced as if the yard is barely there, so compare on house size. Selling: the extra yard you're counting on probably isn't in your number, and the finished square footage is.
4. What it means if you're buying to demolish. The cheapest way to get a lot is to buy the smallest house sitting on it. And don't shop on dollars per lot foot, or you'll end up with that 900 foot cottage that looked like cheap land. Price the whole thing instead: what the lot costs, and what you could build on it. Working land value backward from finished value minus costs and profit deserves its own post.
5. Look at what's being built near you. Permits are public. Mine this cycle show 26 demolitions in Hillsborough, 5 demolitions and 3 new builds in Atherton, 42 new builds in San Mateo, 2 in San Carlos. Burlingame sold at 107 percent of list in 38 days last week, and every city in my table went at or above asking.

None of those five is a teardown in my data. They're ordinary resales to families who wanted the house.

If you own a small older house on a big lot, that cuts both ways for you. The good half: small houses carry a premium per square foot, and the Redwood City sale in that table is the 97th percentile in its city on that measure. The bad half: your land is adding roughly 4 percent for every 50 percent of extra lot, so most of that yard is not in your price at all.

If you own a small old house on a big lot, that's you. Your yard is barely in your price. The people who would pay for that yard are running the opposite calculation, valuing the land and treating your house as a demolition cost, and they aren't the ones bidding on your listing.

Someone planning to replace the house runs the calculation in reverse, pricing the land and treating your house as a demolition cost. Whether that ever helps you depends on whether they see your listing. I'd want to know all of that before I picked an asking price.

None of this is proprietary. Public assessor data, public sold comps, and a regression you can run in an afternoon.

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EDIT: Two commenters pushed on this and one of them changed part of the result, so it belongs up here rather than buried in the thread.

u/bayareainquiries suggested there might be a minimum viable lot size, below which lot area starts to matter a lot more. u/anappraiser made the same point from the appraisal side, that lot value is not linear. They're both right, and the flat +0.11 I reported was hiding it.

Re-run by lot size quartile:

• under 5,400 sqft: lot elasticity +0.29
• 5,400 to 6,600: +0.50
• 6,600 to 10,222: −0.17
• over 10,222: −0.19

Adding a squared term for lot size lifts R² from 0.691 to 0.712 with negative curvature, so the relationship genuinely bends instead of being flat.

What that changes: "lot size barely matters" only holds above roughly 6,600 square feet. Below that it matters quite a bit, and my headline number averaged across the bend.

What it doesn't change: within a city, house size is still the larger term in every quartile.

And u/anappraiser's broader point stands on its own. This is a regression on improved sales, so it does not isolate the contributory value of land, and house size is carrying condition and quality that I can't separate out with this data.