May 18, 2015

11x!! San Jose’s Median Home Price to Median Income Ratio!

Congrats to San Jose!

The median cost of a house in San Jose is $900,000

A stately row of Victorian-style houses in San Jose, Calif., where the median household income is about $30,000 above the national average.

The median price for a previously owned single-family home in the San Jose, Calif., metropolitan area just hit a whopping $900,000, according report released Monday.

That first-quarter price was up 11.4% from a year earlier, and more than four times the U.S. median of $205,200, the National Association of Realtors reported. It’s important to note that these price figures are for the median, not the mean, meaning that there are as many homes that cost more as those that cost less than these levels, whereas a mean price could be skewed upward by a number of high-value transactions.

The national median income is about $51k, which means the national home price/income ratio is about 4x… but San Jose is special! It’s median income $30k more! Thus, it is around $81k! And the median home price is $900k! That’s a home price/income ratio of… 11x!

<sheds tears>

Oh San Jose. For so long you’ve been lagging behind some of your other Silicon Valley peers. For so long, we’ve all wondered how you could be called “Capital of Silicon Valley” when you were so damn affordable.

Well… now you’ve joined the club. Congrats on the ratio! 11x!

Burbians! Where do you think San Jose will be at the end of this year? 15x? 20x?

Comments (126) -- Posted by: burbed @ 5:28 am

126 Responses to “11x!! San Jose’s Median Home Price to Median Income Ratio!”

  1. deertick Says:

    Bubbly-bub-bub-bub.
    Did the income to price ratio get as severe during the last bubble? I believe last time it peaked out at around 10x’s?

  2. Sreeni Says:

    The stocks have hit P/E ratio of over 22. There is no reason for San Jose to lag NASDAQ. Assuming that median income shoots to $85K by end of the year and a reasonable estimate of 12x P/E by end of this year, the median price should hit $1.02million. Perhaps I am conservative here.

  3. Dewane Says:

    It just doesn’t make sense here, but how many people do you know are waiting on the sidelines for the price to go down? For that reason, I don’t think it can go down that much, because the waiters will bring it back up.

  4. deertick Says:

    Its basically no different than what it was like during the last bubble. There are those who are either financially more reasonable and know when they can’t rationally afford prices now and thus waiting and then there are those who are simply throwing money at any and everything more to try and win bids against other buyers. Its full-on frenzy now and very much reminds me of the 2003-2005 era of the last bubble.

  5. Alex in SJ Says:

    Here we go again … Plus there are tons and tons of people making poverty wages in SJ … I made a bit over 10 grand last year and that’s my best year since 2008.

    I theorize that every time a techbro is created, we get 2 more homeless people, maybe 3. Zero-sum game and all.

  6. Alex in SJ Says:

    http://paloaltoonline.com/square/2015/04/24/are-ghost-homes-becoming-a-problem

    Relevant article – foreigners with suitcases full of money buying houses often sight unseen.

    Bubble up!

  7. Real Estater Says:

    Such statistics are meaningless in the Bay Area. When there are only enough homes for 10% of the population to own, it’s the income of the top 10% that matters. When you apply the proper filter, you get a very different number. The fact is that most prospective home shoppers in the Bay Area can afford the homes, as evidenced by the overbidding. It has nothing to do with bubble. As a matter of fact there has never been a bubble in the Bay Area. The only time homes dropped in value was right after the banking crisis, which was a rare, one time historical event that will never happen again. The Bay Area market recovered quickly, I remember going to open houses soon after that period, and there were plenty of multiple offers back then. When I bought my second house in Palo Alto in 2011, I had to compete with 11 other offers, and that was the best time to buy a home.

  8. Bill Lumberg Says:

    Give me a break. Housing tanked in 2000 and it tanked in 2008 and it will tank again in the future.

  9. Sd Says:

    Not until the funny money from China runs out that’s what inflated RBA real estate. Open houses are 90% Chindian here now.

  10. Bill Lumberg Says:

    It should run out at some point. Seems what’s driving it is the unprecedented anti-corruption crackdown by the Chinese president. At some point the corrupt money being laundered through RBA real estate will run out. It has to.

  11. Real Estater Says:

    Housing only tanked in the outskirts. Impact on the Real Bay Area was quite brief and not very severe. If you are a long term investor, you go by what happens majority of the time, rather than by anomalies.

    Waiting for Chinese money to run out is like waiting for the ocean to dry up. It may happen some day, but not in your lifetime. Keep in mind China has the biggest economy in the world right now, and corruption is only a small part of it. Majority of Chinese money is legitimate hard earned money. Again, don’t look at the exceptions, look at the primary scenario.

  12. CBVA_AA Says:

    @Real Estater

    What you are saying applies to Palo Alto, Menlo Park, maybe Mountain View. what else?
    I remember people and houses quite under-water in 2008, outside the towns mentioned above. Oh yes, I was also renting at 1500$ a 1bd/1br in Palo Alto in 2010.
    I have colleagues that bought in 2011-2012 and they candidly admit they wouldn’t be able to buy now. They were first time buyers.

    Questions:
    – how many people, I mean local people, that work here in Bay Area, own a house?
    – what’s the percentage of people living here that own more than 1 house?

  13. BayFan Says:

    Guy1>>I can’t believe that we are so open and ok with Chinese money laundering through US real estate. It’s unbelievable.
    Guy2>>Actually, I think you’re mistaken. Chinese own your money. They are very generous to allow you to buy here< Trade imbalance -> Chinese Money being laundered back into US + Maternity Tourism -> Giving aid to Pakistan -> US Resolving to fight Terrorism -> Market collapses … this all makes complete sense to me…
    And btw: don’t blame the Chinese they may get annoyed and take their highly ?able money somewhere else – Australia anyone? Please use the search function to find more…
    http://news.yahoo.com/us-crackdown-chinese-maternity-tourism-la-200808957.html
    http://money.cnn.com/2015/04/20/news/economy/pakistan-china-aid-infrastucture/

  14. deertick Says:

    Sorry but Palo Alto, Menlo Park and all the other supposedly “safe” real estate areas did in fact go down in value during the recession. Sure- not by a whole lot, but when you consider how much the homes are there even a 2-3% drop represents a huge loss of overall value. Not that I care. Palo Alto and those other areas are overpopulated, crowded suburbs trying to disguise itself as a hoity-toity enclave.

    But on top of that its not just that the overall Bay Area ( including those aforementioned towns) lost value, but more that there were several years where prices were stagnant. That’s as important as value lost overall.

    Anyone who proclaims that prices won’t fall again surely doesn’t recall recent or more distant past history. Prices will in fact fall once more. Its a natural and expected part of the overall economic cycle. Just like the stock market there are booms and busts and housing is tied at the hip to the stock market in general.

  15. CBVA_AA Says:

    By the way, can I try to summarize?

    Postulate: economy goes in waves

    Corollary #1: if you do not have money enough, it’s very unlikely you’ll get more, expecially after economy downturn

    Corollary #2: if you have money, it’s very unlikely you’ll ever fall in corollary #1 case. You’ll keep just getting more when economy starts rising again

    Facts:
    – 1% getting reacher then before the 2008 crash
    – CEO’s, VP’s salaries increasing
    – homeownership in America is at the lowest level since 70’s
    – wages increase not up to speed with inflation

    Big companies prefer getting debts rather than bring-in capitals from abroad and pay taxes on it. They could pave the entire California with gold, or simply pay better benefits, but I guess this is not the main goal…

  16. maryjane Says:

    For the people waiting for the bubble to pop – my take on it is that during the last recession there were a lot of subprime loans and people barely making their mortgage payments. This time around I see many people shoving each other aside to pay all cash. The people buying in the RBA aren’t pretending they’re rich. The are rich and they want to live here. Recently a house in SF went for more than double over asking. That takes a certain kind of mindset and a lot of money. There may be a mania involved but this time it’s backed up with money and it’s money from all over the world. At this point I feel the only thing that could make a dent in this bubble is an earthquake but even then it would only shake confidence for a while. I look at the Marina in SF which was a pile of rubble after the ’89 quake and no one seems to remember – just like no one seems to remember where all the toxic waste dumps were. I’ve lived here a long time but this is the most bizarre I’ve ever seen it.

  17. deertick Says:

    Nah. That’s sort of along the lines of ” Its different this time” sort of talk. Just in my small circle of acquaintances I know a few people who are just barely scraping up a payment each month for their mortgage and are likely totally reliant on their high paying jobs to facilitate those payments. In other words just like last time, many have put themselves in a rather precarious situation with little safety net. All it takes is one small hiccup in the local economy and the whole delicate balancing act for many will be upset.

    This sounds really old-fashioned but in an area like the Bay Area it simply takes longer to get into a position that enables a home purchase. What we might be seeing some of right now is a backlog of people who saved and saved for years during the last bubble and have that cash to bid. I bought 4 years ago after stashing away cash for literally a decade. In other areas sure- the typical buyer can just stick down a small down payment and call it a day. But here its no wonder you see most first time buyers in their 40’s.

  18. Sreeni Says:

    To an extent, we all have to agree that the Fed was able to recreate boom (or bubble depending on perspective). The question is whether what we have is sustainable financial conditions or is a bubble. I don’t pretend to know that though.

  19. deertick Says:

    If the question is will the current bubble keep going into perpetuity the answer is no. As mentioned before the RE market is tied to the stock market. Likewise local RE is tied to local economies. No national/state/regional economy can permanently stay in positive territory at all times. Hence this too will pass. Trust me: It very much seemed like the last bubble would last forever and ever too…

  20. Real Estater Says:

    The U.S. economy is fundamentally resilient. What triggered the downturn as much as everything else is that we got a dumb head for President who made a huge mistake in the Middle East that raided our treasury. If you add up all the corruption money in China it still does not match even a small fraction of the money we lost in that war. If you want another buying opportunity, we’ll have to elect a dumber President. I think that was also an once in a lifetime event that will not happen again.

  21. Real Estater Says:

    Correction:
    “was” that we got a dumb head for President

  22. Real Estater Says:

    Deertick says:
    >>Sure- not by a whole lot, but when you consider how much the homes are there even a 2-3% drop represents a huge loss of overall value.

    Real Estate is a long term investment. Who cares if it dropped 2-3% in a given year? You just live there.

    >>That’s sort of along the lines of ” Its different this time” sort of talk.

    Actually this time it’s the same. Bay Area real estate just keeps going up. If any of the concerns you raised is actually of consequence, then we wouldn’t be here talking about it now because there would be plenty of opportunities to buy.

  23. nomadic Says:

    If you want another buying opportunity, we’ll have to elect a dumber President. I think that was also an once in a lifetime event that will not happen again.

    Let’s hope so, but it doesn’t look promising.

  24. 2million$shack Says:

    Shortly after the Fed raises interest rates (planned for later this year), the stock market, tech sector and bay area housing markets will take a hit. We may even make it until the 2016 election but I don’t see this boom lasting much longer than end of 2016.

    I think this article is spot on: http://wrongtool.kostadis.com/will-happen-again/

  25. Alex in San jose Says:

    This time it’s different in that it’s cash rather than loans, but it’s still a bubble. It’s also what happens when we allow non citizens to own property here, something even Mexico isn’t dumb enough to do.

  26. Bill Lumberg Says:

    The problem is that real estate transactions aren’t subject to required reporting of suspicious activity and due diligence like virtually every other business transaction. And I believe foreigners (at least Americans) are able to own property in Mexico.

  27. deertick Says:

    I think we can safely assume that the resident, perpetual housing cheerleader hasn’t changed from the last bubble: Whatever facts are mentioned doesn’t matter and a robotic, ridiculously always- positive real estate related response will surely come as it did before.

    Here’s some very unscientific observations of mine: Prior to the implosion of the last housing bubble all of the many housing bubble blogs were FULL of comments. As in the ole’ Ben’s bubble blog would have 100’s of comments per post. Then the bust came followed by the recession that created. Comments dwindled down to the single digits. Fast-forward to now and lo and behold the numbers are going back up again- meaning more and more people are thinking of this latest market as being inflated.

  28. maryjane Says:

    I remember working in banking in NYC during the 80’s. The Japanese couldn’t buy enough real estate and they were paying top dollar to borrow any money they could get. People had lots of explanations about why they could afford to do what they were doing and anyone who said it couldn’t go on forever was considered naive. It was such a booming economy – what possibly could go wrong??? By 1995 the NYT reported: “The Mitsubishi Estate Company of Japan plans to walk away from its almost $2 billion investment in Rockefeller Center, the Hope diamond of world real estate.”

    I’m so glad this time it’s different. What are those reasons again?

  29. CBVA_AA Says:

    @maryjane

    …a difference? Easy!!!
    Chinese millionaires are many many more than Japanese people 🙂

    However, I do not think all is due to China. If all it comes to “money laundering”, all the world is the same.
    There is a lot of cash flowing around by itself, regardless of China. The real question to ask to understand a bubble is whether what is bought with that money is actually worth it or not.
    I see thousands of new apartements beeing built, almost everywhere.
    If the bubble will burst, I guess those kind of investments will be hit first and deeper. Maybe single family homes won’t: space is space, and that is not abundant I understand…

  30. Real Estater Says:

    >>I think we can safely assume that the resident, perpetual housing cheerleader hasn’t changed from the last bubble

    I would phrase it differently. The resident expert has been proven to be correct. During the depths of the great recession, it took guts and foresight to make statements about real estate having a positive future outlook. At that time, the amateurs were all saying the sky was falling. Where are they now? Where is Pralay and Madhaus?

  31. Real Estater Says:

    >>I remember working in banking in NYC during the 80’s. The Japanese couldn’t buy enough real estate and they were paying top dollar to borrow any money they could get.

    You need to keep things in perspective. How many Japanese were buying real estate back than vs. how many Chinese are buying real estate today? Back then the Japanese buyers were corporate. Today the Chinese buyers are private individuals, waves and waves of people with suit cases full of cash. There is not enough real estate in the Bay Area to satisfy the demand. There never will be. Chinese don’t want to go to Utah or Idaho or Arizona. They only want to come to Metropolitan areas like the Bay Area.

  32. deertick Says:

    “The resident expert has been proven to be correct.”

    Nope. I recall very distinctly that you always- and I mean always made assertions that the housing market would go on into perpetuity. There’s one important caveat: the housing market crashed in 2007-08 and remained stagnant with either zero or sluggish growth right up through 2011. Almost 5 years. That’s called a cycle. That’s also what the housing market does. It goes up and down. Meanwhile my stock investments have easily kicked the housing market’s rear in outright raw performance and gains.

  33. nomadic Says:

    deertick, it’s much less risky to use leverage on a real estate investment than stocks though. If you bought in the right place, real estate could have provided a better return since 2009-2010.

    I agree with your premise though: real estate goes in cycles.

  34. deertick Says:

    I don’t agree. The historical data out there also indicates that stock investments ( and when I say this I mean a broad investment strata) shows that overall the returns on stocks have been more consistent and in the end more profitable than real estate. Plus with stocks you don’t need to worry about termites, earthquakes, simple deterioration with age or other physical factors which are ever-present problems with wooden houses.

  35. Real Estater Says:

    Deertick says,
    >>There’s one important caveat: the housing market crashed in 2007-08 and remained stagnant with either zero or sluggish growth right up through 2011. Almost 5 years. That’s called a cycle.

    We covered this already. That was not a cycle, but a once in a lifetime opportunity. Imagine if you had listened to the contrarian voice at that time. You wouldn’t even need to look at stocks now. I don’t. Why bother with something that goes up and down when you can simply live in an investment that just keeps on giving?

  36. Bill Lumberg Says:

    “That was not a cycle, but a once in a lifetime opportunity.”

    I bet people that bought in 2001 were saying the same thing in 2007.

  37. mtv-renter Says:

    Real Estater, how does one live in an investment?

    I bought a house because the crazy rising rates favored buying and fixing my costs from future unknowns. In ~2 years, I have over $1M in equity due to the house basically doubling in price.

    So far, so good. How can I tap into this investment? I can sell the house, reap the gains, but now, I have to leave the area since other houses have appreciated, so I can’t really get into another one for less. I can sell and rent, but my current $6k/mo mortgage+tax is way below market rent for something large enough for my family, so i can’t do that. There are local rich people trying to cash in on the housing bubble by effectively buying preferred stock in your house (point.com), but they get all the upside, and you get the downside potential, which sucks if housing goes down.

    Meanwhile, I can sell my investments in 5 minutes to reap any gains (which I’ve done. 100% out of market now, anticipating a bubble pop).

    When the stock bubble pops, I fully expect that my phantom $1M in home equity gains will also return to whence it came.

  38. Dewane Says:

    You can’t live in a stock, so the stock/house comparison needs some kind of extra…I don’t know…caveat? However, the ‘there is no boom and bust cycle’ from the other side is laughable, and easily disproved from looking at facts (I have no relation to this site, just seems good): http://www.paragon-re.com/3_Recessions_2_Bubbles_and_a_Baby Looks like we have a couple of more years to go.

  39. deertick Says:

    We covered this already. That was not a cycle, but a once in a lifetime opportunity. Imagine if you had listened to the contrarian voice at that time.

    FYI here is a list of recessions in the US. As seen, calling the last recession a fluke is silly and if the downturn is somehow referred to as an “Opportunity”… well plenty of other opportunities are in the future.

    1836–1838
    1839–late 1843
    1845–late 1846
    1847–1848
    1853-1854
    “Panic of 1857”
    1860-1861
    1865-1867
    1869-1870
    Panic of 1873-1879
    1882-1885
    1887-1888
    1890-1891
    Panic of 1893-1894
    Panic of 1896
    1899-1900
    1902-1904
    Panic of 1907-1908
    Panic of 1910-1911
    Recession of 1913-1914
    Post WW1 recession 1918-1919
    Depression of 1920-1921
    Recession of 1923-1924
    1926-1927 recession
    Great Depression: 1929-1933
    Recession of 1937-1938
    Recession of 1945
    Recession of 1949
    Recession of 1953
    Recession of 1958
    Recession of 1960-1961
    Recession of 1973-1975
    Recession of 1980
    Recession of early 80’s 1981-1982
    Early 90’s recession 1990-1991
    Early 2000’s recession: 2001
    Great recession: 2007-2009

    So if we so-called covered it… you must have failed to comprehend.

  40. Alex in San jose Says:

    Fuuuuuu.. I graduated right in the middle of the early 80s recession… I also remember the early 90s one in southern California…. Two thirds of commercial space empty.

    Its nice to see so many of the old guard still here, although I’d Real Excretor is still around d, why can’t we have Surfer X too?

    I think we’re in the functional equivalent of 2005 right now…. Which means things will start to sag a bit next year, then slowly slide the year after, then the deluge the year after that.

    Plus the money laundering thing…. That will take some huge scandal, then there will be more scrutiny, which alone will depress prices.

  41. Real Estater Says:

    Why are we even talking about the history of U.S. economy? That’s a different conversation altogether. The Bay Area was booming when everywhere else was in recession. We are different, and we are special. We have a tech industry like nowhere else in the country. We have great weather when the rest of the country is buried in snow. We have Tesla. We have the Golden State Warriors. There is a reason Bay Area costs more, because we are #1.

  42. Real Estater Says:

    Alex says,
    >>I think we’re in the functional equivalent of 2005 right now…. Which means things will start to sag a bit next year, then slowly slide the year after, then the deluge the year after that.

    I laugh when I hear a made-up story like this. There is no basis behind it whatsoever.

  43. Real Estater Says:

    mtv-renter says,

    >>Real Estater, how does one live in an investment?
    >>I have over $1M in equity due to the house basically doubling in price.

    You made $1M by living in your house, and you are asking this question?

    >>How can I tap into this investment? I can sell the house, reap the gains, but now, I have to leave the area since other houses have appreciated, so I can’t really get into another one for less.

    First of all. You don’t tap into it. It’s your 401K equivalent. Would you tap into your 401K? It’s also your fail-safe. If you lost your job, worst case is you take $1M and move out of the area. Even in the worst recession your house will not drop $1M unless you set it on fire.

    I think your real question is, how do you have your cake and eat it too? Well, to do that you need own multiple properties. How is that possible you ask? Well, a good place to start is to ignore panicky people like Deertick and associate yourself with more positive people. Imagine a buyer for your property today. He could have bought two properties for the same amount of money a few years back. Well, I was that person a few years back when others were ruled by fear.

  44. deertick Says:

    “Why are we even talking about the history of U.S. economy? That’s a different conversation altogether. The Bay Area was booming when everywhere else was in recession. We are different, and we are special. We have a tech industry like nowhere else in the country.”

    ha ha ha ha!! Come on… seriously? Helloooooo?

    Sorry but my elderly neighbors disagree. The Bay Area has indeed been a hub for technology. Guess what the high tech industry looked like here in year’s past? We too have had booms and busts as these various sectors either changed or went away.

    Aereospace.
    Semiconductors.
    The first dot-com
    And so on.

    ALL of the above were major economic powerhouses of their time. Anyone who was around during the 80’s-90’s can easily tell you what it was like when

    A: The Bay Area lost almost all of its military bases and
    B: The Aerospace industry, which back then was HUGE also more or less folded up shop.

    How can anyone forget the lull in the Bay Area’s economy during the 90’s? It was bad. Really, really bad.

    So what was that about “Its different here”? Nothing because that isn’t the case.

    And as far as WHY discussing the history of the US economy is important… please show all of us a time in which the US economy took a dump AND the Bay Area was unscathed. Sorry- but that does not ever happen: California is instrumental in the US economy and any hit the economy takes affects California worse than most other states. That’s called history. That is why a sound financial understanding is also tied to a key understanding of market fluctuations.

  45. Bill Lumberg Says:

    I think Real Estater is trolling you, Deertick.

  46. maryjane Says:

    “The Bay Area was booming when everywhere else was in recession. We are different, and we are special. We have a tech industry like nowhere else in the country. We have great weather when the rest of the country is buried in snow. We have Tesla. We have the Golden State Warriors. There is a reason Bay Area costs more, because we are #1.”

    Why am I picturing RE in a short little outfit waving pompoms??

  47. Dewane Says:

    I graduated from SJSU in 1986 and the only jobs available were Army! Navy! Air Force! Marines! Very, very few companies from then are still around – IBM is the only one I can think of that is doing well. HP is in its death throes and the “HP Way” is gone. I just rode my bike on the Bay Trail on Memorial Day, Lockheed still owns a ton of land out there (like two or three miles on each side). FMC (of the infamous Bradley Tank) is gone. My first full-time job, ROLM, is torn down and serving as parking lots for Levi Stadium. It’s been boom and bust forever here.

    Another thing to think about is interest rates, which have hit absolute bottom. Rates in the ’80s were 15 percent and up. Rates will have to go back up sometime.

  48. Sd Says:

    Last time it was the Japs that bought bubbalishus real estate this time it’s the rotten commie Chinks and their commie ilk the Indians= Chindia. It will crash again then it will be time to buy at normal prices.

  49. BayFan Says:

    Real Estater>>If you add up all the corruption money in China it still does not match even a small fraction of the money we lost in that war.
    Uh Huhh – So what does the money lost in war to do with corruption money in China?

    Alex>>I think we’re in the functional equivalent of 2005 right now………
    Alex did you just hear me saying the same thing in my mind… I think you did……

  50. Petsmart groomer Says:

    Same old arguments. No mention of diversification.

    Good to see threads with 50 comments again. Too bad it now takes 2 weeks to get there.

  51. Alex in San jose Says:

    Hahaha bayfan…. I come here, Real Excretor is trolling away, and there’s an ad for NINJA loans on the sidebar, he he bubbles tickle my nose!

    The way to make the house vs. investments thing work, I think, is to rent but rent a very modest place, live below your means and I dunno invest in vanguard funds? Isn’t vanguard the idiot proof way to invest?

  52. Real Estater Says:

    >>Sorry but my elderly neighbors disagree.

    They disagree because they lived in a different world when Silicon Valley was like San Joaquin Valley. The world has changed significantly and it’s really irrelevant to talk to your elderly neighbors about the old times.

    >>Very, very few companies from then are still around – IBM is the only one I can think of that is doing well. HP is in its death throes and the “HP Way” is gone.

    That’s actually a good thing. Silicon Valley is constantly refreshing itself. If you go to a place like Detroit you will still see the same 3 companies there and that’s why we are different.

    >>Uh Huhh – So what does the money lost in war to do with corruption money in China?

    Because the war we started is magnitudes worse than any corruption in China. We took the world economy down, got thousands of our kids killed, and ended up with creating the biggest terrorist nation the world has ever seen. What we did makes the commies look like saints. Lots of people here like to blame our troubles on others but forgot to look in the mirror.

  53. Real Estater Says:

    Alex,

    First of all, congrats on having graduated. You think Vanguard is going to help you buy a place? What grade did you get in economics?

  54. Real Estater Says:

    Dewane says,
    >>I graduated from SJSU in 1986 and the only jobs available were Army! Navy! Air Force! Marines! Very,

    If you graduated in 1986, you should be rich now.

  55. Deertick Says:

    Nothing has changed.I was on this forum back in the last bubble and RE acted pretty much the same. It’s weird really. It’s like no matter what is said, a predictable response we will appear. As if magic unicorns blowing rainbows out their rears will always be the response no matter what facts are presented. The answer is always: ” the Bay Area is perfect! No wrong could ever happen here because…. Because… I am… The Bay Area! Nomad…. Nomad… Nomad… I am perfect! I am Bay Area!!!

  56. Real Estater Says:

    To be honest I don’t spend a whole lot of time thinking about real estate these days. My mortgage payment is less than $3K a month and my rentals are generating positive cash flow. Whatever happens to the economy or the real estate market isn’t going to have much consequences at this point.

  57. nomadic Says:

    Did you call me? (kidding)

    RE, you always point out “we” have Tesla. Why the hell does Elon Musk live in SoCal?

  58. Alex in San jose Says:

    The next big thing I see coming is tech spawning, breaking off into little techlets in places where there’s infrastructure, even if in need of repair, and where young workers can buy houses. Detroit I’m lookin at you, seriously.

    I’ve recently witnessed some fail involving dealing with a circuit board assembly house in Colorado, and moved us to a place literally around the corner from where I’m sitting now, but the fail was really not due to the distance, it was due to poor communication. Something easily circumvented by adopting videoconferencing, a technology the us govt has been using for decades to cut flying costs.

    Tech hubs could sprout in colorado, Detroit, any place with decent travel in and out. Which is a better buy for a young worker? A stucco shitbox in the bay area, or a big old house with good bones that much larger in a nice area in or near Detroit? Better funding for police, private security, and realistic gun laws would take care of the crime problem.

  59. Alex in San jose Says:

    Muskie probably lives in social because it’s nicer. I’ve lived there and even near the bottom of the income pyramid it’s nicer. I livednin a piece of shit Mobil home just outside Newport beach and the rent was 500 a month. Guess what? I could go back down there now and the rent is still probably unchanged. Maybe up a buck, buck and a half. It’s a 55 plus park now but if I saved up until I’m old enough, basically three more years, I could buy a unit for ten grand and there I’d be. From that park I could hop on my bike and coast right to the peninsula.

    Yes I work in the ecch that is tech now, and rake in its sumptuous rewards…. I’m all the way up to just under the poverty rate for an individual now! The only way I make it now is no don’t pay rent. The only way I could buy here is to finance, somehow, a couple hundred thousand for a trailer in hot as hell San Jose or Santa Clara, miles and miles from the sea. Whereas, cosa mesa has scads of these older, green leafy parks that are nice, just have to be old enough. Ten or twenny grand buys you in, ride to the beach.

    And for work? We all know tech is fucked. I’ve been working on my trumpet playing now that I have time, and while its a long term effort to get good, my busking pay keeps increasing. Maybe one of you will hear me playing sometime, in downtown mountain view or San Jose or…?

    As a good trumpeter, I can make a really solid living in socal.

  60. deertick Says:

    Tech hubs in other major/minor US cities has been happening for a long time already. Denver, Chicago, Atlanta, Austin, Boise, Salt Lake City, Raleigh, and others all have somewhat decent tech businesses.

    The one major factor is access to venture capital and the Bay Area has a TON of it. That and the sheer volume of tech here means there is a ready flow of talent.

    Now- will it stay like this forever? Its hard to tell. If I were to venture a guess it would be over how long the US can manage to hold on to its general dominance in tech: If another, specifically cheaper country becomes another significant competitor then who knows?

    Sometimes its easy to forget that back in the 20’s-70’s the US made over 60% of the world’s consumer and commercial electronics goods. The largest corporation in the world in the 30’s made Radios and electronics. We were the leaders in electronics innovation. The regenerative circuit enabled audio transmission. AM and later FM were also American inventions. Then starting in the 60’s Japanese companies started also making electronics and while cheaply made at first the quality got better and better to the point where companies like Sony were making superb TV’s, stereos and other devices- all at much cheaper prices. Within a few years all but a few of the major US electronics producers either went under or shifted all of their manufacturing overseas. Compared to then the US basically has no consumer electronics industry. The Northeast in states like New Jersey, Massachusetts, Upstate NY, and also Midwestern states like Indiana and Ohio were ALL major powerhouses in the electronics industry. That was the “tech” industry of that era. Now all that’s left are the names, the abandoned factories and office buildings and the millions of old surviving radio and TV sets that people now collect.

    Could the same happen to the tech industry in California? I hope not as that’s my bread and butter. But just like the economy the fortunes of stocks, corporations and entire industries are always changing.

  61. Alex in San jose Says:

    Deer tick your posts are some of the best here. You make a real point. Now for my dirty little secret, that I’m only making a very modest living in tech by helping my friend sell tech surplus. Yep, I’m not surviving in tech because of how good it is, but because of how good it was.

    I live in the finished office of this building, about 1000 sq ft with high ceilings stuffed with old test equipment that will never be made again. We just got in a box of old knobs and dials and stuff, like Bakelite old. Those will play well on eBay. $15 an hour part time and a free place to live that’s not too far from the light rail, and I can practice my trumpet.

    I get around by public transportation and my bike, may never own a car again because in the new normal, cars are not affordable things. I don’t see how I’d ever own a house either unless I moved to Detroit myself or I save up and buy a mobile home in a 55+ park, and as outlined, my quality of life would be tons better if I did that in coastal orange county down south. At least I’d see the ocean more than once a year!

  62. Alex in San jose Says:

    Before the crash, when I was still living in a real place and driving a Prius around, I forecast that tech would eventually be designed in Japan, China, or India, made in China, India, or Africa, and the USA would be almost completely out of the loop. I guess that’s pretty largely the case now, isn’t it?

    We in the USA are producing soft goods like movies and entertainment, software and apps. And that stuff can be done anywhere.

    We produce a lot of food and raw materials too, and I forecast that will our ace in the hole, although like Africa, those could end up the property of owners in China etc. And like the masses in Africa, we’ll be able to buy cheap game machines and smart phones to keep us pacified.

    That’s why I like the trumpet. It hasn’t changed for a couple hundred years, and the basic tech of it goes back thousands of years. There’s a huge shortage of people to play taps even now, and we’ve got millions of veteran funerals coming up. I’m reminded of a character in the book The Jungle by Upton Sinclair. The tech of the time was meatpacking, and the characters were all wearing themselves out doing it. The one character was a violinist, and actually made more than he did in the plant, playing for all the socially mandatory wedding and funeral etc parties. But, it was shameful to not work in the plant, so he toiled away until he hurt his hand, could not work, and could not play, and eventually starved to death. Why didn’t he just stick to his violin?? Tech comes and tech goes and everyone, even in that book, thinks they’re going to own a house and live well, and they just end up poor and worn out. It’s an excellent, if depressing, read.

  63. Dewane Says:

    There is a lot to be said that the invention of the shipping container and containerized shipping is what caused manufacturing to go belly-up in the US. Invented, I might add, by an American (former CEO of Sea-Land). Before, shipping costs made it too prohibitive for foreign goods to make much of a dent.

    That’s a good joke about me being rich, I had other priorities at the time – friends, relationships, free time – and being rich was not one of them. As that guy in Citizen Kane said, “It’s no trick to make a lot of money…if what you want to do it make a lot of money.” If chaining yourself to a bunch of property makes you happy, more power to you, but it’s not everybody’s idea of happiness.

  64. Alex in San jose Says:

    There’s a corny little book out there called The Wealthy Barber, that shows how you can do well owning, or renting, of course when it was written the interest rate, and so the return on investment, was Mich higher, but still, one of the characters does well by renting a small place and saving.

    In my own case, saving up several grand and buying a mobile home in a mature folks park makes sense, because I could have quite a nice place for the space rent which would otherwise only rent a room in someone’s house.

  65. Real Estater Says:

    Dewane,

    Why does there have to be a conflict? Owning a house means you can have lots of friends over and party any time you want. I had a great time doing exactly that!

  66. Alex in San jose Says:

    I’ve had some nice apartments and partying was totally OK but its hard to pry friends away from their own personal treadmills.

    I could seriously drop a thou and rent a really nice place for a weekend and invite a bunch of people for free food and booze and party time and 99% of them would turn it down, too busy.

    Its not the places we live in that keep us from partying, just look at the wetback Mexicans who manage to have a wonderful time at the local park. Who’s smarter?

  67. BayFan Says:

    The Chinese are taking your houses and they will take down your iconic companies too (read Apple/Google/Facebook). Read Internet Trends by Mary Meeker from KPCB. http://www.kpcb.com/internet-trends
    The Chinese government has been stifling US internet company penetration for years and the strategy has enabled Chinese Internet companies to flourish (e.g. censoring of Google has led to rise of Baidu). Multiple instances of un-announced firewall shutdowns, Hong Kong re-routing and government provider licenses nightmare while working with a US internet company trying to operate in China and son on… The Chinese government is making it next to impossible for our brands (Facebook, Google, Twitter, LinkedIn) to exist in China.

  68. BayFan Says:

    >> To be honest I don’t spend a whole lot of time thinking about real estate these days.
    OK glad to know
    >> If you graduated in 1986, you should be rich now.
    What was the cut-off year of graduation to get rich?
    >> We took the world economy down, got thousands of our kids killed, and ended up with creating the biggest terrorist nation the world has ever seen. What we did makes the commies look like saints. Lots of people here like to blame our troubles on others but forgot to look in the mirror.
    Let’s not spit in the plate we eat from, if you have such a high dislike for the US of A and its policies – one word “move” … and I am sure you’ll get a buyer in no time for you RBA home…
    IMHO – I think we are witnessing tech bubble right now which could start deflating end of year to mid next year… I also see few mergers/acquisition happening…

  69. BayFan Says:

    @Alex – I think if you had a high profile Silicon Valley CEO/Executive/VC as your partner your music career could instantly take off. Search Holzwarth – Uber CEO girlfriend…

    Ok I digressed. On the topic of real estate, could we get some polling when and where this all is headed… few friends who are looking to buy – thankfully I already bought in RBA, are holding off and they say things may come down a bit in 2016? What do other experts here say? RBA lags other cities with respect to downward trends. What are the indication from other places such as LA, San Diego etc?

  70. Real Estater Says:

    BayFan,

    USA is about freedom, including freedom to criticize its policies. If you don’t like it, MOVE!

  71. maryjane Says:

    My feeling is that we’re close to the top of the bubble. Certain areas will keep their value but people are going to choke on paying a mortgage to live like a peasant. The pent up demand is almost painful to witness. This week I looked at what was billed as “Sea Cliff single family home” in SF. It’s on the market for $700,000. The reality was that 1) it’s not in Sea Cliff, 2) it’s only a home for a family of one and 3) it’s an earthquake shack from the 1906 quake. It was pretty much a plywood shed that had been added on to over the years. It needed to be taken down the the studs and then you’d have to replace the studs (and foundation). It was full of 30 somethings who were trying desperately to make it work in their minds. It would take $1,000,000 between the purchase and renovations and then you’d have a bus running ten feet from your living room window every three minutes. All for less than 1,000 sq.ft. Of course if it sells this week it’ll tell me the bubble still has room to grow.

    I think Alex in San Jose could be right about tech moving to places where workers can afford to buy (or rent). Yes, the Bay Area is great but so are a lot of other places and the smart employer is going to figure that out. People who have worked hard don’t want to live in earthquake shacks, even if they are in SF and paying the median rent of $4,225 for a one bedroom apartment isn’t going to help anyone save for a downpayment.

  72. Alex in SJ Says:

    BayFan – I think I need to get a lot further along in the Arban’s book before I think about looking for an angel investor lol.

    Actually, for now my target is to be good enough to play at the farmer’s markets and make that sweet $50-$100 an hour for the few hours it’s “hot” and just general street playing all over. I honestly feel there’s a much more solid living in that than in tech.

  73. This will end badly Says:

    This is all going to end badly. The world will not need Silicon Valley or anything the Real Bay Area “produces” very soon. America once owned high technology, be it electronics, computers, materials sciences, aircraft engineering, etc. But that’s no longer the case.

    In the field I work in which is cancer research, once upon a time no country in the world could compete with America. Now you can stuff a world class lab into a shipping container and send it to China. Presto! Instant leading edge biotech lab. All you need are scientists (which in this country are all Chinese) and the medical infrastructure to support medical research. This is where China lags compared to America.

    But once the Chinese figure out how to elevate their standards of care and can offer state-of-the art therapies to even a fraction of their population, they too will be able to conduct leading edge clinical trials and their biomedical industry will take off.

    So pretty soon the world won’t even need American biomedical technology. What else do we do here that other countries can’t do? We still make the best jets and defense hardware, but what good does the F-22 do when the bad guys are using suicide bombers packed with 20 pounds of explosives?

    The Chinese are too smart to waste BILLIONS of dollars fighting wars that can’t be won–they’ll just let the foolish Americans keep the oil sea lanes open!

    Face, the jig is up. The center of the economic and political world was in Europe in the 19th Century. It was in America in the 20th. It has now moved to Asia in the 21st.

    If anyone thinks that Facebook and Apple are the vanguards of American industrial and economic might, then I need to have some of that stuff.

    We’re a bunch of idiots now….

  74. michael Says:

    I agree that the top cannot be far away. I drive by the Facebook campus in Menlo Park everyday. They have expanded across the street and constructed an eyesore of a building. They put trees on the roof to create greenscape. The traffic has been made worse by additional lights and buses. I marvel at all the hustle and bustle of the programmers like little bees. Too bad Facebook produces nothing.

  75. burbed Says:

    >Too bad Facebook produces nothing.

    http://finance.yahoo.com/q/ks?s=FB+Key+Statistics

    Gross Profit (ttm): 10.31B
    Profit Margin (ttm): 20.80%
    Operating Margin (ttm): 35.83%

  76. Bill Lumberg Says:

    Mr. End Badly, China and Chinese scientists need to get their fabrication problem under control before they become a legitimate threat to the US. Honestly, do you really believe anything published with all Chinese authors? I know I don’t. Even a Chinese first author is enough to raise my level of suspicion.

  77. This will end badly Says:

    Bill Lumberg–You question papers with Chinese authors? You obviously don’t work in research in this country. Everyone in my lab was born in China. Many are U.S. Citizens or have Green Cards. They are faculty members at every major university in this country. They are first author on countless papers published in the best journals.

    Your ignorance exemplifies how clueless Americans are to the situation of immigrants from Asia–people here reduce Chinese immigrants to that stereotyped deep pocket party official who got rich by stealing from the masses in China.

    I’ve got news for you, the Chinese and other immigrants from Asia have been coming here for decades and they work hard and have been successful in becoming an important part of the upper echelons at American teaching and research institutions. Their children are going off to the best schools and becoming successful professionals as well.

    Some are now returning to China and taking their knowledge back to the old country where it is needed. And in 10-20 years, China will have more opportunities and technology there than we have here.

    American kids can’t even do algebra. The only thing they’re good at is playing on their iPhones. We will be buried by the Chinese, Indians, Koreans, Japanese and the rest in Asia.

  78. CBVA_AA Says:

    @Burbed

    ..FACEBOOK: the biggest and most lucrative sandwich board ever made in human history…

    So, after all this talking: WHEN WILL I BE ABLE TO BUY A HOUSE HERE IN SILICON VALLEY?

    I’m tired of spending 100$ a month in Calottery tickets… 🙁 🙁

  79. Bill Lumberg Says:

    Mr. Ends Well, my guess is that you are an RA. This isn’t the place to debate credentials, though I’m sure mine compare quite favorably to yours. I stand by my comment and suggest only that if you continue to work in science you’ll come to understand what I’m talking about. There’s a reason that the lack of reproducibility in the literature, specifically the biomedical literature, correlates perfectly with that astronomical increase in Chinese/foreign postdocs. Here’s a link to get you started should you want to learn more about the problems with Chinese science.

    http://news.sciencemag.org/asiapacific/2014/10/copycat-papers-flag-continuing-headache-china

    And a link suggesting you should probably be more skeptical of the literature.

    http://www.nature.com/nature/journal/v483/n7391/full/483531a.html

    I’d also point out that the same problems with Chinese science (cheating, generally) impact the Bay Area housing market (cheating their government, laundering money through Bay Area real estate).

  80. This will end badly Says:

    Lumberg–You have no credentials, not stated or verifiable. Besides, your broad generalizations mean nothing as in, you’ve only demonstrated that you can link to two journal articles. This hardly supports much of anything.

    Chinese this and Chinese that. That’s about all this discussion about the Chinese is worth. Let me suggest that this Asian bias here is very similar to the Asia (particularly Japanese) bias that the RBA had in the early part of the last century.

    And then there was that little dust up with Japanese Relocation also caused by white people who harbored unfounded beliefs about that group of Asians.

    Today we have new Asian targets and people making dumb remarks about them. This time, of course, is that China, Japan, India and the rest of Asia can fight back as in they are going to bury us dumb Americans with better products, services and stronger and more substantial economies.

    Just what does America do now that is so valuable? Answer that Mr. “I have better credentials”.

  81. Bill Lumberg Says:

    You’ve added nothing to our conversation, Mr. Ends Badly. I certainly don’t see any parallels between allowing the Chinese to use dirty money to buy real estate and putting Japanese people in internment camps during war time. Take care Mr. Ends Badly, and best of luck with your career in science.

  82. This will end badly Says:

    Lumberg: DIRTY Chinese money? Where?! SHO ME DA MONEY! What dirty Chinese money buying up RBA real estate?

    And how much of this supposedly dirty money has been allegedly used to buy this RE?

    I thought you were whining about the “lack of reproducibility” and Chinese postdocs?! I thought you were saying that Chinese had a “fabrication” problem.

    What about “dirty” American (ie, white people) money buying up RBA real estate. Or dirty Russian money. And lets not leave out dirty Mexican money!

    Or is the only “dirty” money messing things up Chinese?

    Tell you what, why don’t you share some more links from Science on incompetent Chinese postdocs! And what about all of those tenured Chinese professors at Berkeley, Stanford, UCLA, Harvard and MIT?! Are they part of this “fabrication” problem?

    And you still haven’t told us all what exactly us Americans are needed for. Facebook games? Apps for iPhones? Is our “New Economy” built on teenagers staring like zombies at smartphones?

    WOW! That’ll show those corrupt Chinese/Indians/Malaysians/Koreans/Vietnamese/Japanese!

    We’re so screwed. Don’t worry. 30 years down the road the Asians will own all of this overpriced RBA real estate and we’ll be able to rent it from them. It will never be “affordable”.

  83. Alex in San jose Says:

    There’s the whole truth and honesty thing which western culture esteems, and Asian culture holesnin contemp. The only class where fudging data was the norm was taught by an Asian prof, and the profs asian boss would not hear any complaints from a non Asian such as myself. Asians need actual honest and creative people to tell them what to build, they are worker bees, not inventors. Yes they may well try to take over the world, there are lots of Han Chinese for instance and in their hearts of hearts they consider anyone not Han Chinese to be on the order of cockroaches. But if they are successful, science and progress will come to a screeching halt.

  84. Alex in San jose Says:

    Here’s an example, this fucking horrible tablet, made in China, and worse than a us made commodore 64.

  85. Real Estater Says:

    I just ordered a bunch of E14 base LED candle lights all the way from China. Why? I can’t f**k’in find it at Costco, and Home Depot wants to rip me off by charging $16 a piece! Chinese products are the best man. Great selection. High quality. Low price. It’s a consumer’s dream. These days I always check Chinese websites to buy stuff. With all the money I save I have discretionary income to spend at Starbucks and Whole Foods.

    Now sure what all the debate is about. If money buys me latte it’s good money.

  86. Real Estater Says:

    Honestly I don’t feel the problem is China. The problem is bigoted people having trouble reorienting themselves. I sense a whole lot of insecurity out there. On the contrary, most of the Chinese I’ve met are pretty friendly toward Americans. My advice is just take it easy. The threat is self-imposed and imaginary.
    The good news is that the bigots seem to like Chinese women. The psychology seems weird, but it might just serve to neutralize them a bit…

  87. Alex in San jose Says:

    Where I live now is very heavily Chinese and I have zero problems. I love shopping at SF (Shun Fat) up the street, the people are nice and that market has cool stuff. But the is much more about going through the motions than critical thought. So the checkout girl will wear gloves because gloves are clean, right? But the checkout area will be filthy. Remember China is not only about tons of cheap and rather good products, but it’s also the land of fake eggs, IP theft, and Melamine.

  88. Real Estater Says:

    Alex,

    Have you been to China? When I went to China the places I stayed at were cleaner and newer than the United States.

  89. This ends badly Says:

    Alex: At least the Chinese checker is wearing gloves. At “American” grocery stores, the checkers’ hands are filthy, the checkout area is filthy, the floors and store is filthy, and the homeless people hanging around outside assaulting you for cigarettes and money are worse than filty.

    And at least in China, there aren’t 100 people shot in a weekend in Bejing or Shanghai (unlike N.Y., Baltimore, Chicago, St Louis, L.A. etc).

    And of course America doesn’t practice espionage on its own innocent citizen by spying on our emails, phone calls, internet traffic etc. Or at least there’s no online crime here in America.

    Or we don’t have food outbreaks that kill people with poisonous cantelopes or chicken.

    No sirree Bob, this is Merica where we are free to get our free EBT card and buy beer (which is illegal but if you don’t know how it’s done, you ain’t too sharp).

  90. Alex in San jose Says:

    The non Asian places I shop at are much cleaner, and the only reason Shun Fat doesn’t have tons of homeless folks out front is they now have a security guard to run them off.

    I was waiting at the Palo Alto train station and noticed Survey Monkey has an immense building across the street… Wait a minute, what do they do? Do they actually create any value?

    I have not been to China but I remember the athletes who went there in preparation for the Beijing Olympics and in the actual Games, had cute names for the food like “chainsaw chicken” they’d never experienced food that bad.

  91. Alex in San jose Says:

    Oh, another great thing about Shun Fat…. Gary Coleman lives on, and works there! Don’t believe me? Go there and see. The lunch special is very nice. And Gary Coleman in his security guard uniform will watch over you and keep everyone safe.

  92. Alex in San jose Says:

    Real Excretor those high end screen shots don’t square with someone who can choke down Starbucks swill, that shit is disgusting. I can understand liking Whole Foods, I go there too. If you like Chinese stuff so much, where’s your Pu-Erh tea? Tons better than coffee.

  93. This ends badly Says:

    Alex: There’s the whole truth and honesty thing which western culture esteems, and Asian culture holesnin contemp. <<<

    Huh? Western cultures esteem honesty? WTF? Shirey, you have to be joking!!!!

    And where did you drag out that dead cat about Asians aren't creative and are just mind numb robots who aren't creative? Have you heard of Sony, Panasonic, Toyota, Honda…..?

    If I remember correctly people were saying this nonsense about the Japanese and then one day, in fact overnight, the American consumer electronic business disappeared and then Detroit became a dump (as in who in the hell wants to buy a Ford, GM or Chrysler car).

    And so the cycle repeats itself with Americans saying this same nonsense about the Koreans. Whoops! Wait, Samsumg and Hynundai ain't being laughed at anymore.

    Okay, lets take it out on the Chinese! For the less educated on this board, you might want to consider that even though it was true once upon a time, that the Chinese could only produce poor quality shovels, this may not be the case today or in the not so near future.

    And I keep asking, WHAT DOES AMERICA MAKE THAT THE ASIANS CAN'T? If you answer F-22s and smart weapons systems, you are correct. But the last time I needed an F-22 or saw one parked in a garage in this country, well I can't remember.

    Americans are so dumb that they actually think that you can base an economy on companies that don't sell anything. Click, Click, Click. Making money when people click on ads. That's one helluva a business model and one that will secure the future of America.

    So when will RBA real estate be affordable again? Who cares because one day no one here will have jobs that pay enough to rent a crap shack. That monstronsity that Apple is building will be an attraction for urban explorers.

    No one here seems to be old enough to remember the days of the Real Silicon Valley. Those were the days. Today, it's not even a bad joke in comparison. So go ahead an buy now! The future is so bright!

  94. Alex in San jose Says:

    Asian companies hire american creators and designers, like Ideo and Frog Design, plus as has been discussed here, it’s Americans who taught them JIT, tons about manufacturing etc. The Japanese have done the best because they’ve essentially bent over backwards to become at least faux-Western, look up the Meiji Restoration.

  95. Alex in San jose Says:

    I certainly agree with you about the click economy, I mean, WTF?? The latest Apple products are crap that break within a year so now after being an Apple-oid for over a decade I now avoid all Apple products, good luck building their monstrosity, they’re not getting a dime from me.

    That’s going to be the next buzzword and you heard it here first – the click economy. Kinda like the sound of crickets that will mark the economy after the next crash.

    OK so what does the US make that Asians can’t? Rice. Wheat. Alfalfa. Decent shoyu if you ask me but I can’t help it I was raised on Kikkoman.

  96. BayFan Says:

    >>buried by the Chinese, Indians, Koreans, Japanese
    Fact: Its a huge insult for Indians, Koreans and Japanese to be compared to or grouped together with “Chinese”… As I am told they’d rather be grouped with walking zombies than “Chinese”…

    >>So, after all this talking: WHEN WILL I BE ABLE TO BUY A HOUSE HERE IN SILICON VALLEY?
    Soon… I would say end 2015 beginning 2016 we will start to see market soften…
    http://sanfrancisco.cbslocal.com/2015/05/26/silicon-valley-exodus-is-real-even-techies-cant-afford-the-bay-area-anymore/

  97. Real Estater Says:

    It’s like the NBA Playoffs. If you lose, you leave.

  98. Real Estater Says:

    Fact: There are tons of Indians, Koreans Japanese, and Americans working in China.
    Fact: Chinese culture is highly regarded by Koreans and Japanese. Many Koreans want to learn Chinese. Japan already borrowed the Chinese writing system long ago
    Fact: You don’t see many Japanese in the U.S. anymore. Why? After Japan’s economy tanked, most have made their way to China in search of better opportunities.

    You can hide under a rock, but facts are facts.China is the most admired nation in the Far East right now.

  99. Bill Lumberg Says:

    If it’s so great why are so many rich Chinese fleeing? Maybe it’s the pollution, maybe it’s the censorship, maybe it’s for greener pastures.

    http://www.cnbc.com/id/102001188

  100. This ends badly Says:

    China is the most admired nation in the Far East right now? LOL!!!!!!!!!!!!!!!!!

    Where do yo find this nonsense? China is the most FEARED nation in Asia right now, that’s the correct statement.

    Don’t you watch the news? Just recently the ASEAN nations issued a statement condemning China’s actions in the South China Sea. China is muscling in on Vietnam, The Philippines, Japan and everyone else who claims those islands.

    The relations between China and Japan are just moving south. China is clamping down on democracy advocates in Hong Kong–can you say Tiannamen Square II?

    The number one thing that wealthy Chinese want to do is LEAVE China.

    I know many kids of affluent Chinese that have graduated from American universities or done postdocs here and who are going to become permanent residents. The number one goal for educated and successful Chinese now is to get their kids to America.

    If they can’t get here, they send them to Canada. And then they make their way here.

    But the vast majority of Chinese simply don’t have this option. After all, there are over one BILLION Chinese. So it’s not even remotely possible that even a small proportion can send their kids to America.

    The number that are getting here is just a tiny proportion compared to the entire population. Most Chinese are stuck in China.

    The most admired nation is Asia is Japan, no questions about it. They are so much further ahead than China and Korea it’s not even a close race.

  101. Real Estater Says:

    >>Where do yo find this nonsense?

    This is no nonsense. You guys need to sanitize yourself from years of American propaganda and start thinking for yourselves. Check out a few articles with more substance:

    http://www.vanityfair.com/news/2015/01/china-worlds-largest-economy
    http://www.ft.com/cms/s/2/962a905a-70a3-11e4-9129-00144feabdc0.html#axzz3LTzp2jbP

  102. Real Estater Says:

    >>Just recently the ASEAN nations issued a statement condemning China’s actions in the South China Sea. China is muscling in on Vietnam, The Philippines, Japan and everyone else who claims those islands.

    ASEAN is leveraging U.S. interest in these waters to further its own self-interest. It’s all politics here. You need to ask yourself why does the U.S. have any business whatsoever in waters so far away from its borders?

    >>China is clamping down on democracy advocates in Hong Kong–can you say Tiannamen Square II?

    The deal negotiated for the return of HK was “50 years no change”. Which side is trying to break the contract now? From what we can see, China has been living up to its end of the deal.

    >>The number one thing that wealthy Chinese want to do is LEAVE China.

    Oversimplified, dumb statement. Wealthy people around the world all do what wealthy people do. They spread their risks. They have money and properties everywhere. You obviously haven’t been close to many wealthy people.

    >>The most admired nation is Asia is Japan, no questions about it.

    As I already mentioned, Japan has been learning from China for Centuries. It’s a copycat nation and its future lies in China. Go study some history and you’ll find out some of the key inventions in the world including paper, printing, and gun powder all originated from China. Read the articles I linked above, and you’ll see why it’s a matter of time before China returns to historical norms.

  103. Alex in San jose Says:

    China nownie like Japan in 1986.

    Fortunately for China, they are big enough that after their economy tanks they can essentially pull up the drawbridge and do fine on their own and many Chinese in the US may well go back since they will not be popular in the US, keep in mind the many cases of espionage etc. that pop up all the time.

    Again I think we’re in the equivalent of 2005, RE will soften next year then another big haircut the year after.

  104. This ends badly Says:

    Real estator shill: Where do you get your knowledge from, the “Marco Polo Reader, 2nd Grade Edition”?

    Trolling at your level either takes a lot of talent or is just sad.

    As in the Chinese invented gunpowder and noodles? Who cares….

    The Japanese are a copycat nation? Okay, I’ll remember that when I go shopping for my next new car.

    Do you really like trolling like this?

  105. Dewane Says:

    I’d say that we have another year of insanity. Interest rates going up later this year should soften it a bit, then we’ll see a harder hit. However, note that if interest rates go up, a lower price will be offset with a higher interest rate for the short-term.

    My wife is a Han Chinese, and in her “heart of hearts” she doesn’t think of me as a “cockroach”. The level of ignorance spewed here is amazing.

    Living around here, we mostly see the best and most educated from around the world. We’re spoiled here, we really are. People like it here because it’s a great place to live. I’m from the Inland Empire, a great place to be from!

  106. Real Estater Says:

    >>Trolling at your level either takes a lot of talent or is just sad.

    It is sad when you cannot tell what is trolling and what is not. I just showed you two credible articles from credible sources validating what I just told you, and your best response is that I’m trolling? Back in 2009-2011 timeframe when I told people it was the best time to buy to buy a house, there were more than a few jokers here who called it trolling. Well, I wasn’t trolling then and I’m not trolling now. I bought houses and practiced what I preached. There are more than a few witnesses here and you can probably still dig up the old posts.

    >>As in the Chinese invented gunpowder and noodles? Who cares….

    When I detect ignorance I try to help, not so much to help you personally as to help you make the point you were trying to make previously.

    >>The Japanese are a copycat nation? Okay, I’ll remember that when I go shopping for my next new car.

    That would be useful, since you’ll be buying a car invented by the Americans.

  107. Real Estater Says:

    The dumbest comments are unsubstantiated, make-up scenarios backed by nothing. Does anybody disagree? OK, so far so good. Now let’s find some examples:

    >>Soon… I would say end 2015 beginning 2016 we will start to see market soften…

    >>It will crash again then it will be time to buy at normal prices.

    >>Again I think we’re in the equivalent of 2005, RE will soften next year then another big haircut the year after.

    >>I’d say that we have another year of insanity. Interest rates going up later this year should soften it a bit, then we’ll see a harder hit.

    >>”This will end badly”

    What is more telling here is the psychology behind these predictions. The “have nots” all want an opportunity to get back into the game. There is a huge line of people like this both here and in the real world, which is exactly why the Bay Area real estate market is going as strong as ever.

  108. Alex in San jose Says:

    I just heard on the radio today that there’s a way to get a quick green card to live in the US, all you have to do is pay a. Half million to the US government, and do something that provides jobs, like start a business or bui?d a bug?ding, or I guess a house or three…. I heard this on NPR not AM radio.

    The vast majority of people taking advantage of this are Chinese. Yet another thing pushing the current Yellow Peril.

  109. Alex in San jose Says:

    Dawane here is what I have seen with own eyes living in Sunnyvale.

    An Indian guy graduates at the top of his class from IIT which is like the Indian MIT, some say tougher. So the guy’s super smart. He takes some americans job in Sunnyvale, and after he’s settled in, his arranged marriage wife from the old country is sent over, she has a very average IQ. She’s good at having kids though and soon they have a fine brood, five or six of them. They are all convinced they are going to be engineers! Why not? Dad is!! None of them have won the genetic lottery their father did, they’re all very average, they do not have their fathers love of technical subjects and math, nor do they have his work ethic.

    Continued…

  110. Alex in San jose Says:

    Its the Indian version of the guy I work for. He’s a certifiable genius. His wife is fairly sharp. Their kids are very very average. The difference is, his kids don’t mind being a flight attendant, a help desk helper, and a part time massage therapist who lives at home in his 40s. They do not feel they are entitled to an engineers job as a sort of caste assignment.

  111. Real Estater Says:

    Burbed,

    Please kindly remove all racist postings from this thread. Racism is out of step with current American values and has no place in this forum.

    I’d like to welcome all nationalities to come join us, especially those who bring suitcases of cash. As Dewane correctly pointed out above, Bay Area is for the best and most educated. Losers are welcome to move out or go back to where they came from.

  112. Real Estater Says:

    Alex says,
    >>I just heard on the radio today that there’s a way to get a quick green card to live in the US, all you have to do is pay a. Half million to the US government, and do something that provides jobs

    Read my lips. This is official U.S. policy: We welcome all foreigners with suitcases of cash. It doesn’t matter if they are male or female, sharp or average, IIT or MIT. Stop wasting your time telling us about useless stuff.

  113. Alex in San jose Says:

    Almost all nations welcome those with suitcases full of cash, I’d be very welcome in Switzerland if the suitcase is fat enough. But the fast lane green card for a half mil does a bit toward explaining the current bubble.

    I agree Dawayne, this is a kickass place to live. I love hopping on my bike and 15 minutes later be heading back from Japantown with some sashimi, a bento, and some great vegetables. I love being able to fork over about $20 for a round trip train ticket and spend a day in the city. Killer Pho is mere minutes away, even past midnight. I know a number of colorful, and some musical, characters downtown, and I get to work for a genuine rocket scientist. Even though I make about 1/10th what they do, I can eat at the same places the techbros do without breaking my budget because I’m not supporting a car loan, a mortgage, or even putting some slumlords kids through Stanford.

    I’ve considered bugging off to new Orleans or someplace considered cool but other places just can’t compete.

  114. Dr. Chorillo Says:

    I was in China back in 2006. Traveled for about 2 months. Took public buses, trains, and planes. In the interior, much of China resembles Europe in the Middle Ages or America around the dawn of the industrial revolution. People living in shacks with no running water, or mud huts and caves.

    And I’m talking MILLIONS of people living like this. At every train station throughout the country, I saw hundreds of peasants who looked like they stepped out of a Cultural Revolution recruitment film, just milling around, sleeping on their duffle bags, hoping for work.

    Currently, you’ve got something like 650M plus people living in rural China. TWICE the population of the USA. Many of them restless ethnic minorities. Poor, looking for work. Hungry.

    Contrast that rural poverty with the modern China most tourists see. I’ve stayed in those beautiful hotels, eaten at great restaurants in Shanghai and Beijing. It’s as great as many of the posters here say it is. But the rural masses KNOW about the modern China now, and it’s making them restless. They are going to want a piece of that pie, however small. Is there enough to go around?

    How modern China continues on its path of modernization with these 650M+ rural people in tow — many of whom live like medieval serfs — remains to be seen. It will likely not be an easy journey.

  115. Bill Lumberg Says:

    “Losers are welcome to move out or go back to where they came from.”

    And this is where we run in to problems. It’s become so out of control that a few years can determine “winners” from “losers.” That 3/2 in San Carlos for $750k while expensive, was still attainable for many back in 2012. Fast forward to 2015 and that same place is now $1.3 million, out of reach for all but those who hit the IPO lottery. Is the person who had the money in 2012 on account of being 3 years older and starting their career 3 years earlier more successful than a guy with the same job that started 3 years later? Is Mr. 3 Years Later a loser? Isn’t Mr. 3 Years Earlier calling Mr. 3 Years Later a loser kind of like the rich kid who was born on third base but acts like he hit a triple?

  116. Real Estater Says:

    >> Isn’t Mr. 3 Years Earlier calling Mr. 3 Years Later a loser kind of like the rich kid who was born on third base but acts like he hit a triple?

    Does it really matter? We are a market driven economy. The market wins every time. When there are excess people that cannot be accommodated by the market, those people will have to move out. In business, as in life, part of it is about talent, part of it is about timing, and part of it is luck.

  117. Real Estater Says:

    >>In the interior, much of China resembles Europe in the Middle Ages or America around the dawn of the industrial revolution.

    We have another make-up story here. I have traveled recently to those places too, and China’s interior infrastructure makes America look like a third world nation in many respects.
    This building just opened, and it’s smack in the middle of China where people supposedly live in the “Middle Ages”:

    http://youtu.be/tn9hoo6cZFc

    Again, seeing is believing. No more make belief stories please.

  118. Bill Lumberg Says:

    Not to drag out this ridiculous China-related thread (which, I know, I contributed to) but Chengdu, China’s 4th largest city, isn’t exactly what the previous poster is talking about.

  119. Real Estater Says:

    How many people in America live in an urban environment? It’s got to be less than 1%, as America only has three real cities: New York, San Fran, and Chicago.

    If an alien lands on earth and visits China’s cities and compare it to ours, they must think China is the world’s #1 economy. Wait, that is actually the case.

  120. Bill Lumberg Says:

    That’s not completely agreed upon.

    http://www.bbc.com/news/magazine-30483762

  121. Bill Lumberg Says:

    And I’m not sure why you’re excluding places like LA, Boston, Atlanta, Washington DC.

  122. Alex in San jose Says:

    Dr Chorillo, I was living g in a very rural area, gilroy, until a few years ago. There was often more horse than car traffic on the road I was on and it was not a minor road. There were and are old time type hobos wandering around, picking up cigarette butts and carrying bindles. Tons of homeless folks walking the five or more miles to the downtown and back. Its really like the 1930s down there.

    This is why people are moving to the cities if they can. A commonly held belief is that one will survive hard times better in the country, but the reality is sky high crime, loony survivalist or rapture types who are mean as snakes, and general misery.

    So I can well imagine rural misery coupled with urban ease and sophistication in China, because its that way in the US.

  123. michael Says:

    Burbed,

    I suppose you consider facebooks business model sustainable?

  124. Dewane Says:

    Alex, Gilroy and the countryside of China can’t be compared to each other. You should listen to people who have actually been there, like Dr. Chorillo. The US is a developed country, and China is developing. In the hinterlands, there is no infrastructure, too many people and not enough jobs. The poverty is indescribable unless you’ve seen it – I mean, no paved roads, and humans providing the only powered transportation – the roads aren’t even wide enough for a car. I mean, a donkey cart would be a step up. Unless you go there, you can’t really imagine it. It makes the Ninth Ward look like Manhattan.

  125. deertick Says:

    “If an alien lands on earth and visits China’s cities and compare it to ours, they must think China is the world’s #1 economy. Wait, that is actually the case.”

    Assuming they could land… the pollution in China is now at epic levels. Cancer rates have also been increasing at equally epic levels.

  126. Bill Lumberg Says:

    http://www.marketwatch.com/story/foreign-investors-pose-threat-to-residential-real-estate-2015-06-15


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