patrick.net

Nomograph says

You people should just buy your cheap shitty East Bay houses and quit whining about prices on the peninsula. Face it, you just don't make enough money.

Explain home prices in Bay Area from 1992 to 1997 ?

Why was it so much cheaper compared to income vs today ?

That was before all the IPO cash outs.

Netreality says

That was before all the IPO cash outs.

let Nomohead answer the question... he seems to be able to speak about East Bay and Peninsula.. and Northern California in general.

Netreality.. didnt we have IPOs before ... there were well over 300+ public companies that IPO'd by 1994.

We didnt see neither overvalued tech stock or housing bubble at the magnitude we recently had !

Nomograph says

You people should just buy your cheap shitty East Bay houses and quit whining about prices on the peninsula. Face it, you just don't make enough money.

Most of the people on the peninsula are house poor morons or people who have been here for 20-25+ years. I personally know many house poor. Its insane, and the schools stink on top of it all.

Most of the smart people who have not won a "lottery" , RSUs or a startup pop are moving out. See you all later.

Between rent control, prop 13 and idiotic zoning and fools in 1950s moldy rickety earthquake-deathtrap termite laden tiny with knob and tube wiring who are living WAY worse than poor people in a double wide trailer do keeping the zoning the way it is, you can see how idiotic regulations and rules have caused the valley to turn into a unaffordable, bad schools, anti family anti middle class hole. The pay here is no longer enough to offset cost of living. not even close. Unless you have big RSUs or are company executive or senior sales, this dump is no longer paying nearly enough to live here. Its a sad, burned out husk thats way more like Wall Street than like the innovation valley it used to be long ago.

Im done. Its not worth it. The quality of life here is much, much lower than you think. I know because I visit people making less than half what I make in normal areas, they have a LOT more fun as a family than here.

thomas.wong1986 says

Why was it so much cheaper compared to income vs today ?

Because in those days there were not so many new monied wealthy folks pouring in from overseas places like there is today. Those days were before China and India became juggernauts.

Facebook has fewer employees than Yahoo is about to lay off.

Even if every one of those employees gets millions (they won't), they're not all buying even one house.

The net effect on house prices will be approximately zero.

B.A.C.A.H. says

Because in those days there were not so many new monied wealthy folks pouring in from overseas places like there is today. Those days were before China and India became juggernauts.

I thought that the BS, which was fed to the gullible people of the Bay Area in 2006, in order to justify high house prices was pretty ludicrous, but this one really takes the bate.

B.A.C.A.H. says

Because in those days there were not so many new monied wealthy folks pouring in from overseas places like there is today. Those days were before China and India became juggernauts.

I guess,you are not familiar with the term "reverse brain drain". I'd leave up to you to research that and find out what numbers of immigrants(with or without $$ bills) are pouring in or leaving US. Immigration numbers are recorded by state department. So can you prove that H1-B are coming from China/India with money? LOL. I don't think so. E2 investor Visa? How many were awarded by state department to people from China/India,in last 10 years? How many family based immigrants came here from India/China with so many $$ bills. Yeah,yeah China/India decides US home prices. Thanks for cracking me up. LMAO.

Of the people that I know that bought $2 - 10m places in MP/PA/LA/Atherton/Woodside over the last decade, most had major stock payouts from Google, Apple, Facebook, even Yahoo, Sun, Network Appliance, a while ago, or worked for a VC firm. They didn't buy based on their salary.

Also, back in the 90's it wasn't so easy to see the API scores & demographics of all the local school districts. With more information, there is far more consolidation into the most "valuable" locations & schools. With ignorance comes bliss.

Even if only 10% of facebook employees decide to buy, that will affect the market since there are so few decent properties for sale right now.

anon595 says

Even if only 10% of facebook employees decide to buy, that will affect the market since there are so few decent properties for sale right now.

You're talking about ~300 sales. That's about a week's worth of sales in the BA, maybe a 2% increase in a year.

Furthermore, it's not like the guy who got hired last month is looking at a million dollar payday when they issue their IPO.

There was a huge boom in the 90s and early 00's because there were dozens and dozens of companies having IPOs and making big payouts.

One company with a couple thousand employees is not the same thing.

Facebook is a over-valued worthless company that will go broke. If you own stock... Sell out!

Robber Baron Elite Scum says

Facebook is a over-valued worthless company that will go broke. If you own stock... Sell out!

Member of Banking Aristocracy

+1

Kevin says

There was a huge boom in the 90s and early 00's because there were dozens and dozens of companies having IPOs and making big payouts.

Not entirely just being IPO, yes many IPOs in the late 90s were overvalued by 200-400x PE 100x sales.

Just because you have an IPO doesnt mean instant millionairs.

What do you say about all the other IPOs that were not overvalued.. so where were the multi millionairs from that lot ?

Where are the millionairs from todays IPOs like Invensense or Calvium Networks. .... as a matter of fact were are the millionairs from back in the days of Intel AMD Seagate and Cisco.. not many were made. take a little salt when you hear about IPOs and mega-millionaires

December 17, 1999
Ariba Buys Tradex in $1.86 Billion Stock Deal

http://partners.nytimes.com/library/tech/99/12/biztech/articles/17ariba.html

The run-up in Tradex's valuation was attributed in part to FreeMarkets' astounding initial public offering last Friday. FreeMarket, an online auctioneer that went public at $48 a share, saw its shares zoom up to $280 in their first day of trading, giving them a market capitalization of $9.5 billion.

Wtf are you even talking about? Do you really want to argue that there weren't a bunch of people getting rich in the dot com boom?

bubblesitter says

Yeah,yeah China/India decides US home prices. Thanks for cracking me up. LMAO.

That is funny. The U.S., no. The Fortress, yes.

Just like, in reverse of the situation before WWII, expats did not decide home prices across China, just inside of The Shanghai International Settlement.

B.A.C.A.H. says

The U.S., no. The Fortress, yes.

Prove it. Prove that the money is coming from China. Are all of those immigrants coming here with how much money? You need to move out of your baseless China and Fortress theory. Even that cracks me up!

Funny story. I have a few friends working at Facebook. I talked to one the other day and asked if he was going to buy when he got access to his shares on the open market. On paper he says he is valued at about 2.5m. His reply. "Hell no, have you seen the prices around here". I didn't dare tell him that people are counting on his kind to keep their over-inflated house price going. He talked more about the idea of doing nothing for a while. At 28 years old, and that kind of loot, housing might not be the first thing on your mind. He is paying $800/mth right now rooming with a few mates. He thinks that is expensive. ;)

bubblesitter says

B.A.C.A.H. says

The U.S., no. The Fortress, yes.

Prove it. Prove that the money is coming from China. Are all of those immigrants coming here with how much money? You need to move out of your baseless China and Fortress theory. Even that cracks me up!

In the bay area, money "from China/India" is certainly present, but it isn't money that was brought over by "rich asians". It's engineers working at apple, google, etc. That money would be there regardless of the engineer's ethnicity though.

Kevin says

In the bay area, money "from China/India" is certainly present, but it isn't money that was brought over by "rich asians". It's engineers working at apple, google, etc. That money would be there regardless of the engineer's ethnicity though.

Makes some sense. In that case they are Americans,not Chinese/Indians. It is still money they earned here. If they want to overextend and think this a new normal then so be it - But certainly money is not coming from China/India - that's BS.

bubblesitter says

Prove it. Prove that the money is coming from China. Are all of those immigrants coming here with how much money? You need to move out of your baseless China and Fortress theory

Further, do all Chinese and Indian nationals have that much money, and not care about getting good deals or have financial advisers, or do they ALL just plop down whatever any asks of them? I'd have to think at least half are savvy shoppers.

Kevin says

bubblesitter says

B.A.C.A.H. says

The U.S., no. The Fortress, yes.

Prove it. Prove that the money is coming from China. Are all of those immigrants coming here with how much money? You need to move out of your baseless China and Fortress theory. Even that cracks me up!

In the bay area, money "from China/India" is certainly present, but it isn't money that was brought over by "rich asians". It's engineers working at apple, google, etc. That money would be there regardless of the engineer's ethnicity though.

Peter Schiff has been warning for years about Chinese bidding up our real estate. We know for a fact that it happened in LA beginning in 2000. Most of us have heard the stories about limos pulling up in front of middle class homes in Pasadena with guys carrying suitcases full of cash. I moved to LA in 2003 and it was all the rage then.

bubblesitter says

Prove it. Prove that the money is coming from China. Are all of those immigrants coming here with how much money?

Did you not read my post? I did not write that the money is coming from China. I wrote that the new monied people are coming from places like China and India. They are new monied people, sending their kids to elite schools in their countries so that they can go to grad school, H-1, etc. here.

Yes, it is new wealth in those places, and it is a new wave of immigration from those places. And since they are elites with elite education, with their h-1's or green cards or whatever, they have access to jobs here than can pay for bidding up the prices in The Fortress.

That is what is difference from thomas.wong's halcyon days of the early 1990's.

You want proof? Just go visit Fortress Places like Cupertino and have a look at the people, especially the ones who don't look old enough to have bought their homes in the 1970's - 1980's. Or better yet take a look at the faces of the kids at the public K-12: somebody's got money or income or wealth to pay/borrow for Fortress Prices or Fortress Rents, and it ain't many haolies, brudda.

I don't think that they are all new monied immigrants though. I was getting some coffee at work the other day & I overheard some of my Indian coworkers talking. They are typical middle-class tech workers, and as far as I know citizens, and one was talking about how great the schools were in the area of Mountain View he just purchased a house in (Monta Loma). The other guy was congratulating him & then talking about how he bought a house in Cupertino a year ago for the schools.

I assume that their spouses work and pull pretty good incomes too. I bet that they saved for years and then borrowed as much as they possibly could to get in to those places. My fiancee works at a Taiwanese PC hardware company, and she says that many of her coworkers (Chinese/Taiwanese) have similar stories. They buy in Cupertino & Saratoga for the schools, and constantly bitch about the stress of barely making house payments. Lots of them also have hefty car payments too.

As I have said in the past, just because someone isn't white & doesn't speak English does not mean that they are FOBs with suitcases of cash. There is most definitely a cultural component driving this irrational desire to buy into "top schools," with many different facets. However, plenty of white Americans spew the same nonsense about "needing" to live [wherever] to get into schools. They probably aren't competing all that well in hot areas like Cupertino because American culture doesn't promote saving, whereas many eastern ones do. Guess who can make the down payments needed in these areas? It also helps a lot that Asians & Indians typically live multi-generationally, so grandma & grandpa can sell their place & give mom & dad the cash for the house that they live in with them.

NOW, the values of first or second generation kids are pretty different than those of their parents. They don't generally want mom & dad living with them when they are grown up, aren't quite as much of savers and don't seem be as mindless about the "top schools" stuff.

beemerbimmerman,

yep.

Wealth is wealth whether it's from the pooling of the family money or the gradual accumulation by the saving or the two-income techie big salaries to qualify for the big loans.

Wealth is wealth and that is what is required to pay the rent or the mortgage/property tax (or to buy for cash) in The Fortress.

Sure. It always sounds (to me) like you are trying to argue that wealthy foreigners/immigrants are the ones bringing loads of cash over here. There are some of those, but I suspect them to be a minority in the RE market here. I guess I don't count citizens or naturalized citizens to be "foreigners" once they get to that point.

And herr BACAH, it ist "bimmerman" jaa. Das "beemer" refers to zee BMW motorcycle, und zee "bimmer" refers to zee BMW autocar jaaaaaaaaaaa.

/awful internet German accent

bmwman91 says

It always sounds like you are trying to argue that wealthy foreigners/immigrants are the ones bring loads of cash over here.

I haven't ever wrote that argument, though some of that does go on, wealthy parents of families from places like Hong Kong, Singapore, Taipei, setting their kids up here. I know such people, you may too.

But there is also in much larger numbers a rise of new wealthy classes of folks in India and China, whose kids go to the elite schools in those places and the elite grad schools here. Many of them wind up here in the Bay Area with the big tech salaries that wind up bidding up the prices in The Fortress places.

This is different from thomas.wong's early 1990's when it was just a handful of rich fleeing Hong Kong or whatever.

B.A.C.A.H. says

And since they are elites with elite education, with their h-1's or green cards or whatever, they have access to jobs here than can pay for bidding up the prices in The Fortress.

Again you are contradicting yourself. Elites coming from China,so they must be bringing money from China,correct? Do you know that there is a cap on H-1 visas? Seriously,a guy with an H-1 can buy that Cupertino property? good luck on having people believe your elites from China theory.

bubblesitter says

Elites coming from China,so they must be bringing money from China,correct

I didn't say that. You did. I never said they brought the money bags with them. You said it.

Elite schools back home, elite grad schools here, gravitate to the Left Coast here with its H-1 jobs with the tech salaries, you know the drill. The pay can be quite good. Good enough to pay/rent/borrow for The Fortress.

I dunno why you are so hostile to these folks.

One time a Mandarin coworker such lady took me aside and discreetly explained it to me that our other immigrant coworker, a rare one who would bash Fortress Prices, did so because he was jealous.

Here's my observation about these things in bullet points.

* Post grad -level educated professionals, particularly Asians, who makes over 150K do not consider an API of under 900 as acceptable. It’s either private schools or the very best public schools, exceptions are very limited. Once you realize that, you will know that a family would rather bid on 1M Cupertino home than to live in Vallejo for free.

*Places like Palo Alto, Cupertino are among the most educated for a large town in America, Successful people generally make better decisions, don’t you think?

* A home is a pass-thru cost. The only permanent cost is the incremental property tax and interest cost associated with the mortgage, if any. Which is not that much considering the incremental earning power. All other living cost is about the same, notwithstanding the luxories.

* There is no sticker shock for most foreignors buying in the bay area.

* Facebook is just a symbol of the larger private local industry which are equity base, the most lucrative in this world by far. If Facebook employees are making it, to a smaller extent, so will Visa, Franklin Templeton, and 200+ other public companies in the immediate area. A lot of people have a lot more cash/paper wealth vs. October, not just Facebook employees.

* It doesn’t take a million dollar in cash to buy, just 250K and a good job, there are plenty where those come from. Essentially every Facebook employee can buy if they choose to. Stock option is not a one hit deal, it is a pipeline of exercise and grants. Facebook may also track companies like Saleforce, which would become 1K to 10K employee enterprise in 5 years. More stocks will be granted.

* Affording a home is a function of wealth + income. Once the wealth are made, they generally don’t disappear. The inventory of millionaires will be way up in 10 years while the inventory of SFH homes in the places that people want will not.

* People Like Edvard see’s very little step-down moving from say BA to North Carolina. For the Asians, Indians, etc. it is a huge step-down, and most likely a deal breaker no matter the cost. The demoprahic trend hasn't changed, domestic migration and interational immigration.

* Well off Parents tend to help their adult children buy homes. A Facebook employee who already owns in Cupertino will likely pass along enough money to their kids to buy their homes nearby, most likely in the vicinity. Asian parents tend to pass along some of their wealth to their kids earlier. That is why open houses are full of traffic and decent homes in good locations don't last a week.

* Outside money is significant. Most foreign students who attended a university here/Canada are generally wealthy or moderately wealthy and most can place a phone call to mom and dad at home to wire 200K-300K easily. Some comes as young as 10-12 years old, send their kids, with mom to the US for school while the breadwinner (usually in business stays in China) About 50% stays and 50% goes back. Most end up having dual homes. There are significant more Asian foreigners applying and being accepted to US and Canada universities.

*Even the poorer/older immigrants have way more money now than they use to. China is basically 80% public housing in the past and they have buy-out a lot of the residence in exchange for lump sum payments. They come in here looking poor but have a six figure USD bank account. To top it off, they get retirement $$ in china as well as use the benefits here.

SFace says

The inventory of millionaires will be way up in 10 years while the inventory of SFH homes in the places that people want will not.

That will surprise me considering what I've read about U.S. household savings rates. I would guess there will be more millionaires, but not that the statistic would "be way up." Didn't a lot of people just take themselves out of the running who might have qualified?

http://www.frbsf.org/publications/economics/letter/2009/el2009-16.html#3

SFace says

Post grad -level educated professionals, particularly Asians, who makes over 150K do not consider an API of under 900 as acceptable. It’s either private schools or the very best public schools, exceptions are very limited. Once you realize that, you will know that a family would rather bid on 1M Cupertino home than to live in Vallejo for fre

This is a little ridiculous though... I went to a low 800 API high school and never scratched the surface of what the school actually had to offer academically.

Asian buyers should realize their student would have a lot easier time being VALEDICTORIAN of a high 700 or low 800 API school. And realize that will look a hell of a lot better to colleges to be top of their class, instead of lost in the middle of the pack at some over 900 api school that no one outside of the area cares about.

Sometimes it's better to be a big fish in a little pond.

SFace says

Post grad -level educated professionals, particularly Asians,

SFace says

Successful people generally make better decisions

SFace says

There is no sticker shock for most foreignors

SFace says

It doesn’t take a million dollar home to buy, just 250K and a good job,

SFace says

People Like Edvard see’s very little step-down moving from say BA to North Carolina. For the Asians, Indians, etc. it is a huge step-down

SFace says

Outside money is significant. Most foreign students who attended a university here/Canada are generally wealthy or moderately wealthy and most can place a phone call to mom and dad at home to wire 200K-300K easily

bubblesitter, see ?

EDIT:
Was a long post. I think it was mostly rambling, so I cleared it.

bmwman91 says

They buy in Cupertino & Saratoga for the schools, and constantly bitch about the stress of barely making house payments. Lots of them also have hefty car payments too.

You summed up Indians and asians very well.

These bastard monkeys think that "top schools" is going to automatically make their children successful.

Most of them force their children to go into medical, law and engineering thinking that's they only way to make huge shit loads of money. Anything else is to them guaranteed poverty.

Those careers except engineering are no longer easy to make money in. Even engineering is becoming a bit more hard.

They are the biggest pussies I've ever known in my life. They only pick these careers because they are fearful and need some type of career which is rigged in it's salary. Medical is one career which is rigged by the American Medical Association to keep salaries artificially high.

But the salaries of doctors is beginning to collapse slowly.

They earn 300K a year working 60-80 hours and then blow it on some overpriced million dollar cardboard dump.

Buy a bmw/benz/lexus usually on a loan or on lease. And the rest of their money they spend on clothes to keep up appearances along with spoiling the shit of their little brats.

Indians/asians are the most cheapest and greediest people but they are defiantly NOT good with money, investment or saving. Their delusion to me is astounding.

They feel a 300K salary makes them super-wealthy....

That's actually no where near wealthy anymore. Decent and comfortable lifestyle? Defiantly. But rich? Fuck no.

2/3rds of doctors and lawyers end up broke at the end of their life. Remember that.

When you give fearful brain-dead peasants a little bit of money, they end up thinking they are more than what they really are.

The medical insurance scam along with the pharmaceutical cartel plus AMA limiting the number of doctors admitted into practice to purposely rig the salaries to keep them higher along with denying medical school admission for no fucking reason to well-qualified candidates other than limiting the number of doctors to perpetuate their propaganda of a "shortage of medical professionals".

The medical insurance system also drives up medical costs and thus salaries. It is an unsustainable ponzi scheme which will collapse and the yearly debt from this insurance system is paid by the tax payers.

Sorry to get off topic...

But the majority of these FOB indians and asians are involved in this profession.

And by the way...

Never ever deal with a Indian or asian when buying or selling real estate. They are the worst people to deal with. Very unreasonable and demanding more than what they deserve.

I predict that Asians and indians will be the poorest people when a crash in the whole economic system comes in America.

Cupertino will one day become like Detroit.

As what happened to the auto industry in Detroit will happen to the computer/technology/internet industry in Cupertino.

Only 100X worse. At least the auto industry actually produced something of real tangible value.

lol I love a good tirade.

I am not really certain that your berating of Asians & Indians is entirely accurate. I would extend it to PEOPLE in general. Whites, blacks & Mexicans want to do the exact same thing, but are apparently too lazy to put the work in to pull the salaries necessary to live the "$300k/year, live paycheck-to-paycheck" lifestyle. White folks (my people) crack me up the most. They tell their kids to pursue "whatever makes them happy" and then let them borrow $50k+ to study 17th century literature or something. Yeah...pursuing your passion is great & all, but you kind of need some common sense, and a lot more hard work if you want to do more than live at a subsistence level. At least the Asians & Indians force their kids to put some effort into it.

bmwman91 says

White folks (my people) crack me up the most. They tell their kids to pursue "whatever makes them happy" and then let them borrow $50k+ to study 17th century literature or something. Yeah...pursuing your passion is great & all, but you kind of need some common sense, and a lot more hard work if you want to do more than live at a subsistence level. At least the Asians & Indians force their kids to put some effort into it.

Tell me about it. I can't even count the number of people I know borrowing >$50k to get degrees in "communications" and archaeology. Yeah...good luck with that.

bmwman91 says

They buy in Cupertino & Saratoga for the schools, and constantly bitch about the stress of barely making house payments. Lots of them also have hefty car payments too.

You wont be hearing that from the predecessors (former homeowners). LOL! god forbid you even mention how much cheaper homes were before. Cupertino or Saratoga.

Robber Baron Elite Scum says

Cupertino will one day become like Detroit.
As what happened to the auto industry in Detroit will happen to the computer/technology/internet industry in Cupertino.

In the auto industry, you can always put more options into next years model plus inflation will increase the price of the autos sold in the future.

Its the opposite in tech land.. todays product does 10x more and will cost 1/10 then similar product 5 years ago.