patrick.net

pkennedy says

Housing is simply following inflation, and inflation in the bay area runs higher than the country side, like all big cities.

The words are, "like all big cities". From what I know, prices in big cities hardly correct, and recover quickly to a new high. Although SV is a suburb, it is so well-known that many apolitical techies from all over the world prefer SV than elsewhere. In SV, technical skills are more critical than ability to navigate corporate and playing office politics. In other places, the opposite is true.

E-man says

I'm afraid that you will be proven wrong again. I was one of those in 2009 predicted that interest would go to 6%. Who would have thought? So I don't mind for being wrong again.

Good luck with your bet. :o)

I don't think it'll be a crash. But I think (in retrospect) easy money is over for that temporary explosion of flippers. Maybe some parts of the country is still going to be flipper ahoy... after all there are those constant reality tv shows showing constant flips.

pkennedy says

Businesses are already paying an arm and leg to do business in the bay area, or downtown SF, they're doing it for a simple reason -- the best talent is here, and with that, the best talent is always in contact with more of the best talent, bouncing off ideas and becoming better.

How do you explain why SV companies employ more outside CA than Santa Clara County... Just like GE, United Technology, or any other companies... Locations are no longer limited to one region. What you said, was only true during the 70s and 80s.... it stopped in the 90s as SV companies expanded far more in other states.

If your a head of operations, paying arm and leg will get you fired for being financial irresponsible.
these people are looking at margins and bottom line returns ... not what some Landlord or Realtor has some delusions about.

Just look at any Career page for a SV company... its pretty obvious.

hrhjuliet says

Thank you, but I own a home in the Bay Area, and if we would curb foreign investors and invest in our own country and community then we would all have a better quality of life. I find it disturbing that almost every hard working family I know of in the Valley has no hope of owning in this grossly inflated market and are paying outrageous rental costs. It is sickening,

Huckers and Scammers have come to the valley and twisted our economic success for their own benefit... there are not interested in any balance in this market. Ask your local realtor how long they been here ?

pkennedy says

Housing is simply following inflation, and inflation in the bay area runs higher than the country side, like all big cities. That's why e-man said that housing will get more expensive after each cycle -- it will

Inflation is a national statistic and there is no evidence that prices increase faster in the bay area - except housing.

But housing prices have increased faster than inflation nation wide since the 80's. People who think this is a normal and permanent trend don't make any sense. Wages are increasing slower than inflation, but housing will permanently increase faster? This doesn't make sense. What we are seeing is an historical anomaly due to macro trends, that will change eventually. In this context, a 2 years jump in prices means absolutely nothing.

People who think the bay area is so rich that housing can permanently stay at prices that are now above the top of the housing bubble, are suffering from short term bias. The region is simply under the money tap. It is disproportionally impacted by larger policies. And this too will change in time.