Alright boys and girls. Time for a pop quiz!
What do you call this kind of graph?
Not sure? That’s ok. let’s look at this one:
Still not sure? Well, the answer is: hockey stick.
See, graphs like this usually represent situations like a company going public, or an amazing introduction of an amazing product/service.
So… what do you think these graphs were from? My portfolio, perhaps? My stock options, perhaps? Nasdaq? S&P 500?
Nope. The answer is: Real estate!
Here’s the first graph again…
Ah yes… the county of Santa Clara – the heart of Silicon Valley. I thought that was pretty impressive until I saw Sacramento:
It’s amazing to me how people’s incomes have almost quadrupled since 1997 in Sacramento – after all, house price increases usually reflect job growth right? Oh wait…
Well it must have been because they stopped building homes in Sacramento in 2004, hence the spike! Oh wait…
Maybe it was because Sacramento suddenly shrunk so there was less land… because they started making more farms so we wouldn’t have to import our food from South America and Asia! Oh wait…
I’m stumped. What do you think?