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If that were true, wouldn't you expect real estate prices around San Francisco not to be rising as fast as they are? Something is driving up wages around the s

If that were true, wouldn't you expect real estate prices around San Francisco not to be rising as fast as they are? Something is driving up wages around the startup hot-spots, isn't that a sign that there really isn't that much risk?

coreyoconnor 11y ago
Depends on the change of real estate prices relative to changes in wages. Wages can go up but after cost of living the effective wage might be quite low.
copsarebastards 11y ago
Real estate prices are not equivalent to real estate values. One could argue that real estate values have actually gone down because prices are driving out a lot of the culture that caused the real estate to be valuable in the first place. This disparity between price and value is called a bubble, and it will likely pop when the disparity between startup prices and startup values (the tech bubble) pops.
x0x0 11y ago
A big piece of that is nimby pricks up and down the peninsula are adding companies but very little housing, then dumping their housing needs on sf. viz mountain view authorizing some 2-5 million ft2 of office space for linkedin, et al, [1,2] and maybe adding a couple thousand homes [3]. Where are those thousands of new employees going to live? Not in Mountain View, pop 75k. So they have to get housing where there is housing available, and so lots of them will live in sf by necessity. [1] http://www.mercurynews.com/business/ci_28058088/google-linkedin-fight-mountain-view-office-space http://www.mercurynews.com/business/ci_28058088/google-linke... [2] http://www.bizjournals.com/sanjose/news/2015/05/06/in-stinging-defeat-for-google-linkedin-scores.html http://www.bizjournals.com/sanjose/news/2015/05/06/in-stingi... [3] http://www.mv-voice.com/news/2015/05/15/housing-dealt-setback-in-north-bayshore-decision http://www.mv-voice.com/news/2015/05/15/housing-dealt-setbac...
sundaeofshock 11y ago
Nope. The Bay Area is home to some major tech employers (Google, Apple, Oracle, Cisco, Salesforce, Intel, etc), and is also a major outpost for other big names (Microsoft, Samsung, Sony, etc). There are also a number of major employers in high-compensation jobs (finance, bio-tech, law). Even among startups, there is a big difference between a scrappy little company of three folks and a company like Uber. Bottom line: there is lots of money floating around the Bay Area. As much as we might like to believe otherwise, the amount in small start-ups is just not that much.
- deegles 11y ago
  There's also a lot of overseas money being invested in real estate, driving up the prices. The same is happening in Seattle.
notacoward 11y ago
The same places that are startup hot spots are also full of even more people drawing big paychecks from Google, Facebook, Apple, and a horde of other no-longer-startups. That's probably exerting an even greater influence on real estate and rental prices.

coreyoconnor 11y ago

Depends on the change of real estate prices relative to changes in wages. Wages can go up but after cost of living the effective wage might be quite low.

copsarebastards 11y ago

Real estate prices are not equivalent to real estate values. One could argue that real estate values have actually gone down because prices are driving out a lot of the culture that caused the real estate to be valuable in the first place. This disparity between price and value is called a bubble, and it will likely pop when the disparity between startup prices and startup values (the tech bubble) pops.

x0x0 11y ago

A big piece of that is nimby pricks up and down the peninsula are adding companies but very little housing, then dumping their housing needs on sf. viz mountain view authorizing some 2-5 million ft2 of office space for linkedin, et al, [1,2] and maybe adding a couple thousand homes [3]. Where are those thousands of new employees going to live? Not in Mountain View, pop 75k. So they have to get housing where there is housing available, and so lots of them will live in sf by necessity. [1] http://www.mercurynews.com/business/ci_28058088/google-linkedin-fight-mountain-view-office-space http://www.mercurynews.com/business/ci_28058088/google-linke... [2] http://www.bizjournals.com/sanjose/news/2015/05/06/in-stinging-defeat-for-google-linkedin-scores.html http://www.bizjournals.com/sanjose/news/2015/05/06/in-stingi... [3] http://www.mv-voice.com/news/2015/05/15/housing-dealt-setback-in-north-bayshore-decision http://www.mv-voice.com/news/2015/05/15/housing-dealt-setbac...

sundaeofshock 11y ago

Nope. The Bay Area is home to some major tech employers (Google, Apple, Oracle, Cisco, Salesforce, Intel, etc), and is also a major outpost for other big names (Microsoft, Samsung, Sony, etc). There are also a number of major employers in high-compensation jobs (finance, bio-tech, law). Even among startups, there is a big difference between a scrappy little company of three folks and a company like Uber. Bottom line: there is lots of money floating around the Bay Area. As much as we might like to believe otherwise, the amount in small start-ups is just not that much.

deegles 11y ago
There's also a lot of overseas money being invested in real estate, driving up the prices. The same is happening in Seattle.

notacoward 11y ago

The same places that are startup hot spots are also full of even more people drawing big paychecks from Google, Facebook, Apple, and a horde of other no-longer-startups. That's probably exerting an even greater influence on real estate and rental prices.