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Platinum Super Contributor
buyinghouse
Posts: 5,879
Registered: ‎04-23-2011
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What's driving this crazy market in the BA? Wall Street/Technology?

   I have seen so many topics about how the house market has gone through the roof. The complaints about not finding homes are piling up, and investors and whoever is moving out of here is having the deal of their lives. Long lines are waiting patiently to enter an open house disregarding of the condition, be this a flipper, remodel or a dumpster. Is it the money floating around after cashing in the stock options? Is it stupidity? What is it?

 

   What worries me is the fact that foreigners, without any sentiment, without any intention of living here, are buying these properties to rent or simply to own it expecting higher returns down the road while he or she leaves on the curb native people who can't compete and are forced to rent or keep trying without any luck.

 

  We have heard of juicy deal the income work force receives through vesting on stocks from the company. We saw Facebook and others doing that and the question was thrown in the air; was that the impulse that skyrocketed the RE price on all types of homes?

 

  Does the success of many companies have incremented the pockets of those mentioned above to the fact that they are filthy rich from year one? Are they residents or citizens of this country as to have them stay and change jobs in case their companies go belly up or as I said they will be leaving and renting these homes instead of selling them continuing the low inventory that's visible by now?

 

  Is this new thing, be Facebook, Google and others, something that is not going to stagnate? I was working for a company in the SV and I could see the $millions they were spending just to be the king on a segment of the technology industry just to go belly up because at the end the projects were losers and they ended up being bought. That started a cycle that we all well know was the internet crash of the last century (hard to say last century, isn't it?).

 

  Thus, if these prices are to stay, somehow it will push some people to leave, yes, those who can't keep up with these increments on everything, taxes, price of produce, all sorts of food and commodities. Attrition will make move many out of this area because whether you believe it or not inflation has bitten all of us but some that earn good money won't feel it. I am feeling it right now ($20.00 in my pocket).:smileyhappy:

 

  Finally, for those who hate the so called Palo Alto/Cupertino towns, I wonder if the whole BA will become something like that where anybody that has a decent job ($50-$60K <) will not ever be able to buy the so called American Dream in this area.    

 

  Because if that's what some think, it explains why those who can sell don't want to. Maybe we are going to have another bubble but we don't want to admit it? Perhaps when the pass of time tell us that innovation doesn't have more room to create and Google and those big companies will start to close stores, like Apple that started to feel the pinch of the market not wanting it as much as before. Facebook? Google?

 

   Where's my crystal ball when I need it?:smileyvery-happy:

Gold Super Contributor
norcalnative
Posts: 3,277
Registered: ‎05-04-2009
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Re: What's driving this crazy market in the BA? Wall Street/Technology?

Free market - Global businesses and Global competition for jobs its only the beginning people. If your kids are not competitive in their area of interest be it wrenching on cars or selling the latest Software or networking products - or designing the latest batch of cures for disease - they will have a very hard life given there are plenty of smart people who can do those jobs on this little planet.

 

If you think prices today are crazy and some doomsday crash is happening in the future your going to be sitting around waiting for a long time. The wide spread financial structure and large range of industries and jobs create a situation where dips will happen but a complete crash would take an event on the scale of world wide threat to life - Super volcano for example to result in the doomsday theory.

 

Unless people stop coming to CA - and stop having kids our RE prices in the Bay Area only stand to climb with little ups and downs along the way.

Super Contributor
BAzx
Posts: 243
Registered: ‎07-08-2012
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Re: What's driving this crazy market in the BA? Wall Street/Technology?

Good ole internet era - it makes our world much closer for everything and everyone... Enjoy the faster pace of life.

Gold Contributor
mediaguru
Posts: 1,896
Registered: ‎03-03-2011

Re: What's driving this crazy market in the BA? Wall Street/Technology?

A "crash" in RE isn't likely to happen.

 

What is more likely is a stagnation.  If RE doesn't change value (or changes very little) while inflation occurs, salaries and commodity prices increase... then this is the equivalent of a "crash" because if your asset isn't keeping its value on pace with inflation, then it is essentially depreciating in value.

Silver Trusted Contributor
Michelle1x
Posts: 1,063
Registered: ‎02-17-2008
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Re: What's driving this crazy market in the BA? Wall Street/Technology?

No way to prove this of course, but I think some of the issue is the secular bear market we are experiencing in stocks.  The stock market has been flat for a decade, yes there are individual wins here and there but it is something of a minefield and after the 2008 market crash, tons of people won't touch stocks.  Real estate is getting all that money.

Gold Super Contributor
norcalnative
Posts: 3,277
Registered: ‎05-04-2009
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Re: What's driving this crazy market in the BA? Wall Street/Technology?

Michelle - if you think the market has been flat for a decade - your operating with printed stock trend books printed back in the 70's.

 

Any investor worth their salt knows - that a market that does not fluctuate ie MOVE generates little income. The past 4yrs market investors have seen some of the largest gains and profits in over a decade simply because the Market has had large movements up and down thus generating Large returns.
 

Money is not made in a stable market its made in a instable market where values move up and down. Losses only occur when your forced to sell at a loss or cannot buy more at the lower price to off set your risk at the higher prices.

 

At no point in time in the past has the Stock Market been more accessible to the general public and easy to execute trades than today! Do people loose money? Sure they do but for every Looser there is a Winner. That is how the market works.

Silver Contributor
bld999
Posts: 473
Registered: ‎04-15-2011
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Re: What's driving this crazy market in the BA? Wall Street/Technology?

1] Supply shortage, [ insert personal list of causes here]

 

2] Smoking economic sector, ie tech with attendant high salaries, people spinning the wheel on startups with vc's ready to place bets. Money washing in and out like the tide.

 

I used to use Minot , ND as an example of location effects on valuation. eg, 425k where it sits, and 113k in Minot. Not now.

What do you suppose will happen when the oil gives out?  There is even a shortage of women in Minot, but the ratio will reset when all the roughnecks leave.

 

Will tech and innovation collapse in SV? Answer that and you can draw a credible long term graph of price.

Gold Super Contributor
Jil
Posts: 3,136
Registered: ‎10-24-2011
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Re: What's driving this crazy market in the BA? Wall Street/Technology?

People Living in BA 

Their saved Money

 

BA is unique with high competition with "Come what may, let us face" attitude.

 

The current drive is by well earned, well saved money. All those software intellectuals are very good players of stock market.

 

Only few people are actively looking at this forum.

Others never care about the rants going on here.

 

They are driving this crazy market in the BA

Silver Trusted Contributor
Michelle1x
Posts: 1,063
Registered: ‎02-17-2008
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Re: What's driving this crazy market in the BA? Wall Street/Technology?


norcalnative wrote:

Michelle - if you think the market has been flat for a decade - your operating with printed stock trend books printed back in the 70's.

 

Any investor worth their salt knows - that a market that does not fluctuate ie MOVE generates little income. The past 4yrs market investors have seen some of the largest gains and profits in over a decade simply because the Market has had large movements up and down thus generating Large returns.
 

----------

 

Yeah whatever norcalnative.

The big money in this town consists of many that have $20 million + to invest, SOMEWHERE.  These people are dependent on market indices not some specific hot stock.  These people are certainly "investors worth their salt".

 

Platinum Super Contributor
buyinghouse
Posts: 5,879
Registered: ‎04-23-2011
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Re: What's driving this crazy market in the BA? Wall Street/Technology?

    It seems to be that inflation has taken its course here. The availability of cash, lots of them in hands of people that perhaps never owned, not even dreamed about owning a home may be a part of this equation. For them, coming to the US and in 2 years they are ready to buy with the help of those banks that deny the same treatment to the native is something to take in consideration.

 

   I don't want to expand my comments guys, but I have seen a drastic change of attitude and many things I can't elaborate in this Bay area. In short words, I would say this is not the America I knew or got to love since day one.

 

  By the way, finally I am using my new computer ('cause of it I am broke:smileyvery-happy:), a Dell Inspiron, I5330. I needed it to start some business online that I couldn't because the older one didn't know if she was a computer or my teacher spanking me:smileyvery-happy:. I would highlight and try to copy but no avail. It would stop in the middle of the highlighting and so on. I think she smelled I was going to have this new lover because she started to behave 2 days ago. Too late, I had lost love for her....:smileyvery-happy: