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Well, the NASDAQ[0] and DJIA[1] are both off 3% for the day right now, along with every other index around the world. Or, to talk about price movements that are

Well, the NASDAQ[0] and DJIA[1] are both off 3% for the day right now, along with every other index around the world. Or, to talk about price movements that are probably a bit more noteworthy, crude oil futures on NYMEX[2] are down ~7%. It's been kind of a (minor) bloodbath so far in the markets today. So, a 10% drop for a young, growth-oriented company is not terribly surprising on a day like today, I'd think. 0: https://www.google.com/finance?cid=13756934 https://www.google.com/finance?cid=13756934 1: https://www.google.com/finance?q=INDEXDJX%3A.DJI https://www.google.com/finance?q=INDEXDJX%3A.DJI 2: http://www.marketwatch.com/investing/future/clg6 http://www.marketwatch.com/investing/future/clg6

the-dude 11y ago
Not only today, almost all of this year. FED + China + Oil.
haldean 11y ago
Tech looks like it might be doing a little worse than the rest, too: https://www.google.com/finance?catid=us-TRBC%3A57&sort=MARKET_CAP https://www.google.com/finance?catid=us-TRBC%3A57&sort=MARKE...
boomzilla 11y ago
Well, for some people, myself included, the not-going-so-well recent IPOs (Square, Box, etc.) would help deflate the pressure on housing prices in SF/BA. I feel for the workers at these company, but it's becoming impossible to raise a family here when the rent/mortgage is creeping up to more than half of most people's salary.
- dantillberg 11y ago
  Ha, yes. I don't own a home, but I would like to someday, so I'm always confused how news about falling home prices is treated as "bad" in general in the media. For me, I celebrate the news. I want housing prices to go kaboom so I can afford one.
  - jmagoon 11y ago
    Yes, but as soon as you buy one you will want housing prices to go up, just like any investment.
    - bunderbunder 11y ago
      Especially so for an investment like housing, where rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "investment" to fare much better than sticking money under the mattress would. Sorry for the barb, but that meme (your house as an investment) really bothers me, because it has the potential to do a lot of damage. It's like penny stocks. Sure you can make money if you really know what you're doing or get lucky, but by and large the idea that it's a good investment originates with people who've a financial interest in convincing you to buy some.
      - djrogers 11y ago
        >rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "investment" to fare much better than sticking money under the mattress would Pretty shortsighted view there, and demonstrably wrong. Historically housing prices have always risen faster than the rate of inflation - both in 'popular'neighborhoods and elsewhere. Take almost any 10 year period of time and you'd be very very hard pressed to find a region where housing prices didn't dramatically outpace inflation.
        avn2109 11y ago
        Is this true in all countries, or just the ones (like my country, the USA) where the real estate market is rigged by various government/incumbent entities?
        bunderbunder 11y ago
        Yes, but if you're looking at them as an investment then you need to look at the overall picture. Just looking at prices over time is interesting, but it doesn't give the financial picture from the perspective of a homeowner because it ignores taxes, maintenance and repairs. Once all that's factored in the picture tends to get a lot less rosy. For example, over the past 25 years the average price of a US home has grown by about 14% in real terms. I'm too lazy to calculate out what that would be as an annual percentage rate, but it's definitely lower than the average US property tax rate, which I believe is a smidge under 1%. So already, even without considering other expenses, houses tend to be gradual money losers on average.
- pyrrhotech 11y ago
  This is a given and has already happened twice in the past 20 years. Housing is in a bubble in the Bay area yet again and history always finds a way to repeat itself. I do think we've learned some and that the economy is stronger now than the previous two crashes, but a 15-30% drop across the board seems reasonable.
- aaroninsf 11y ago
  Preach, sibling! My wife and I have put in more than 20 unsuccessful offers attempting to stay in our unfortunately popular neighborhood in the last two years. We have been chasing the affordability train for some years now, our increasing bids never getting ahead of the frenzy... (today, it seems we're at peak market and it'd be foolhardy to buy perhaps...) NB: we don't just 'move further out' not only because of 20 years of community, our love of bike commuting, and our great 'hood... ...we are bound by the location of our excellent public school. Non-parents may not realize the staggering import of lucking into a K8 public school you truly love... for two siblings in SF, staying in our school instead of paying for some private (assuming we could get into one) will amounts to well over half a million dollars in post-tax income over the next decade... We too are part of the tired story of 'middle' class (by SF standards... :P) professional families with 2x full time incomes finding it almost impossible to hold on to a life of modest middle class comfort in SF (where middle class means: a 1000 sq ft 2 bedroom home for family of four; one 25K car; public schools; etc.)
  - beachstartup 11y ago
    in my opinion, you're not really competing with those people, the real money that moves those markets comes from overseas. the local tech people just rent from the real owners. with a global equities slump more foreign money might pour into california real estate.
  - geofft 11y ago
    Yeah, the way that the public school district system happens to interacts with housing markets is a remarkably powerful way of impeding class mobility. If your family already has a home in a well-funded school district, or if you can afford to move there, you can do very high return-on-investment things for your children. (Or, as you mentioned, if you can afford a private school.) And moving your home is a market with very long timescales. Note that I am not saying that the school district system is somehow intrinsically morally bad, or that I know of a better alternative to it, just that it has this unfortunate result if you think class mobility is a good thing.
- rconti 11y ago
  It'll be easy to find a cheap place in Morgan Hill! SF/Peninsula, not so much. Prices never really went down by that much in '08 which was a real, honest-to-god housing crisis.. so a smaller tech deflation won't help much. .. Or so I hope, since I just bought an overpriced Peninsula house last year :)
- pound 11y ago
  Sorry to tell that but no, it will not really help with raising a family here. Sadly current prices are new normal and deflated pressure will just let them to not grow further up in near future. (5%-10% drop is nothing for affordability). On another hand looking at what it became I don't even feel sorry for it's future. SF is over and to hell with it. Just a whole bunch of douches.
  - woah 11y ago
    The real douches are the millionaire homeowners who pushed for restrictive zoning laws for so many years. They've made their fortunes, at the cost of SF mostly only being affordable for the rich.
    - pound 11y ago
      1) "millionaire homeowners" is pretty much definition of SF. And while roughly 1/3 of SF residents are renters big part of them are temporary here (boom and bust nature of this place, you can call them carpetbaggers) and are just douches who are not homeowners. 2) Doesn't matter who exactly are douches or who can afford SF. SF is ugly place and no victorians can help it. Bigger problem though is that rest of the country can be even uglier.
      - pound 11y ago
        I'll add that people are romanticizing SF based on its past. Long gone past. Present is ugly.
- anjc 11y ago
  It might do more than just deflate pressure a little...
- rdl 11y ago
  On the rent front, I doubt it -- salaries are just increasing to match. All-cash comp in the 300-500k range is surprisingly common (at least for 10+ year experience people in hot fields); add any luck on equity, and 2 incomes, and you can afford SF rents as they stand. Being able to reliably get a $300k/yr cash salary (salary+bonus, but still cash) seems more related to absurd rents than 10% of people getting huge equity payouts (which tend to not even be that huge). I also think a lot of people who get $1-5mm equity windfalls often think "oh, buy a house somewhere else" vs. "a small condo in SF". (equity does affect the buy market; if there were a rate hike and China implosion at the same time, but people still had equity money, they'd probably be the majority of buyers.)
  - cm2012 11y ago
    Median household income in SF is 77k, just FYI. Only 16% of SF households make over $200k (this includes 2 earner households, which is probably most of these). This doesn't negate anything in your comment, just adds a little bit.
    - ralphael 11y ago
      I think this adds some necessary context to the previous "300-500K" comment.
      - rdl 11y ago
        Yeah, I meant scoped within peak-earning-tech-people.
  - ccarter84 11y ago
    Jeesh, 500k? Guess I'm in the wrong industry....
- roymurdock 11y ago
  Conversely, if the overall market is doing poorly (which it is), you'll get hit in your 401k/pension fund/retirement account. To which degree falling housing prices and falling savings funds would cancel each other out, I do not know. If it were just Box and Square that were doing poorly, you would be fine - these recent IPOs have relatively low institutional holdings as a % of total. Twitter, Facebook, Yahoo on the other hand - upwards of 60% of the stock is owned by institutional investors, AKA your retirement fund and Vanguard ETFs.
- pfarnsworth 11y ago
  It already happened starting in December. House prices are down and competition has dropped. We'll see if this trend continues in January but my bet is that price houses will continue downward. The only problem is that interest rates continue to be low, so some people will always have the ability to outbid others.
AngrySkillzz 11y ago
Tech stocks and small cap stocks tend to have a pretty high beta too, so it's not super surprising that Square's price would exaggerate recent market movements.
monkmartinez 11y ago
Your definition of minor is vastly different than mine.
myth_buster 11y ago
WaPo: Global markets plunge on oil/China fears. https://www.washingtonpost.com/news/business/wp/2016/01/20/new-turmoil-as-global-markets-plunge-on-oil-china-fears/ https://www.washingtonpost.com/news/business/wp/2016/01/20/n...
- ihsw 11y ago
  To add more context to this -- the markets have been sliding since Sunday due to Chinese intervention in the markets (including raising RMB reserves for Chinese banks), and there is a lot of shakeup expected from the lifting of Iranian sanctions and the Saudi Aramco IPO internal debate (could be largest IPO in history and it would be company with the largest market cap in history, yes bigger than Apple's). The environment should stabilize by 2016Q2.
  - arcanus 11y ago
    > it would be company with the largest market cap in history, yes bigger than Apple Apple is not remotely the largest company in history, when adjusted for inflation. The The Dutch East India Company, for instance, was worth over 7 trillion dollars at one point. Likewise, Standard Oil held a monopoly on all the USA's oil at one point and certainly had a several trillion dollar valuation. Saudi Aramco will be massive, certainly. But not without precedent in history.
    - elemeno 11y ago
      There was an article in The Guardian this past weekend about Saudi Aramco which estimated it's value at $10tn, which would definitely put it in a league of it's own when it comes to total value. Saudi Aramco – the $10tn mystery at the heart of the Gulf state - http://www.theguardian.com/business/2016/jan/16/saudi-aramco-10-trillion-dollar-mystery-heart-of-gulf-state http://www.theguardian.com/business/2016/jan/16/saudi-aramco...
  - chishaku 11y ago
    > The environment should stabilize by 2016Q2. Don't hold your breath.

the-dude 11y ago

Not only today, almost all of this year. FED + China + Oil.

haldean 11y ago

Tech looks like it might be doing a little worse than the rest, too: https://www.google.com/finance?catid=us-TRBC%3A57&sort=MARKET_CAP https://www.google.com/finance?catid=us-TRBC%3A57&sort=MARKE...

boomzilla 11y ago

Well, for some people, myself included, the not-going-so-well recent IPOs (Square, Box, etc.) would help deflate the pressure on housing prices in SF/BA. I feel for the workers at these company, but it's becoming impossible to raise a family here when the rent/mortgage is creeping up to more than half of most people's salary.

dantillberg 11y ago
Ha, yes. I don't own a home, but I would like to someday, so I'm always confused how news about falling home prices is treated as "bad" in general in the media. For me, I celebrate the news. I want housing prices to go kaboom so I can afford one.
- jmagoon 11y ago
  Yes, but as soon as you buy one you will want housing prices to go up, just like any investment.
  - bunderbunder 11y ago
    Especially so for an investment like housing, where rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "investment" to fare much better than sticking money under the mattress would. Sorry for the barb, but that meme (your house as an investment) really bothers me, because it has the potential to do a lot of damage. It's like penny stocks. Sure you can make money if you really know what you're doing or get lucky, but by and large the idea that it's a good investment originates with people who've a financial interest in convincing you to buy some.
    - djrogers 11y ago
      >rapid growth due to a shift in the popularity of your neighborhood is about the only reliable way for your "investment" to fare much better than sticking money under the mattress would Pretty shortsighted view there, and demonstrably wrong. Historically housing prices have always risen faster than the rate of inflation - both in 'popular'neighborhoods and elsewhere. Take almost any 10 year period of time and you'd be very very hard pressed to find a region where housing prices didn't dramatically outpace inflation.
      - avn2109 11y ago
        Is this true in all countries, or just the ones (like my country, the USA) where the real estate market is rigged by various government/incumbent entities?
      - bunderbunder 11y ago
        Yes, but if you're looking at them as an investment then you need to look at the overall picture. Just looking at prices over time is interesting, but it doesn't give the financial picture from the perspective of a homeowner because it ignores taxes, maintenance and repairs. Once all that's factored in the picture tends to get a lot less rosy. For example, over the past 25 years the average price of a US home has grown by about 14% in real terms. I'm too lazy to calculate out what that would be as an annual percentage rate, but it's definitely lower than the average US property tax rate, which I believe is a smidge under 1%. So already, even without considering other expenses, houses tend to be gradual money losers on average.
pyrrhotech 11y ago
This is a given and has already happened twice in the past 20 years. Housing is in a bubble in the Bay area yet again and history always finds a way to repeat itself. I do think we've learned some and that the economy is stronger now than the previous two crashes, but a 15-30% drop across the board seems reasonable.
aaroninsf 11y ago
Preach, sibling! My wife and I have put in more than 20 unsuccessful offers attempting to stay in our unfortunately popular neighborhood in the last two years. We have been chasing the affordability train for some years now, our increasing bids never getting ahead of the frenzy... (today, it seems we're at peak market and it'd be foolhardy to buy perhaps...) NB: we don't just 'move further out' not only because of 20 years of community, our love of bike commuting, and our great 'hood... ...we are bound by the location of our excellent public school. Non-parents may not realize the staggering import of lucking into a K8 public school you truly love... for two siblings in SF, staying in our school instead of paying for some private (assuming we could get into one) will amounts to well over half a million dollars in post-tax income over the next decade... We too are part of the tired story of 'middle' class (by SF standards... :P) professional families with 2x full time incomes finding it almost impossible to hold on to a life of modest middle class comfort in SF (where middle class means: a 1000 sq ft 2 bedroom home for family of four; one 25K car; public schools; etc.)
- beachstartup 11y ago
  in my opinion, you're not really competing with those people, the real money that moves those markets comes from overseas. the local tech people just rent from the real owners. with a global equities slump more foreign money might pour into california real estate.
- geofft 11y ago
  Yeah, the way that the public school district system happens to interacts with housing markets is a remarkably powerful way of impeding class mobility. If your family already has a home in a well-funded school district, or if you can afford to move there, you can do very high return-on-investment things for your children. (Or, as you mentioned, if you can afford a private school.) And moving your home is a market with very long timescales. Note that I am not saying that the school district system is somehow intrinsically morally bad, or that I know of a better alternative to it, just that it has this unfortunate result if you think class mobility is a good thing.
rconti 11y ago
It'll be easy to find a cheap place in Morgan Hill! SF/Peninsula, not so much. Prices never really went down by that much in '08 which was a real, honest-to-god housing crisis.. so a smaller tech deflation won't help much. .. Or so I hope, since I just bought an overpriced Peninsula house last year :)
pound 11y ago
Sorry to tell that but no, it will not really help with raising a family here. Sadly current prices are new normal and deflated pressure will just let them to not grow further up in near future. (5%-10% drop is nothing for affordability). On another hand looking at what it became I don't even feel sorry for it's future. SF is over and to hell with it. Just a whole bunch of douches.
- woah 11y ago
  The real douches are the millionaire homeowners who pushed for restrictive zoning laws for so many years. They've made their fortunes, at the cost of SF mostly only being affordable for the rich.
  - pound 11y ago
    1) "millionaire homeowners" is pretty much definition of SF. And while roughly 1/3 of SF residents are renters big part of them are temporary here (boom and bust nature of this place, you can call them carpetbaggers) and are just douches who are not homeowners. 2) Doesn't matter who exactly are douches or who can afford SF. SF is ugly place and no victorians can help it. Bigger problem though is that rest of the country can be even uglier.
    - pound 11y ago
      I'll add that people are romanticizing SF based on its past. Long gone past. Present is ugly.
anjc 11y ago
It might do more than just deflate pressure a little...
rdl 11y ago
On the rent front, I doubt it -- salaries are just increasing to match. All-cash comp in the 300-500k range is surprisingly common (at least for 10+ year experience people in hot fields); add any luck on equity, and 2 incomes, and you can afford SF rents as they stand. Being able to reliably get a $300k/yr cash salary (salary+bonus, but still cash) seems more related to absurd rents than 10% of people getting huge equity payouts (which tend to not even be that huge). I also think a lot of people who get $1-5mm equity windfalls often think "oh, buy a house somewhere else" vs. "a small condo in SF". (equity does affect the buy market; if there were a rate hike and China implosion at the same time, but people still had equity money, they'd probably be the majority of buyers.)
- cm2012 11y ago
  Median household income in SF is 77k, just FYI. Only 16% of SF households make over $200k (this includes 2 earner households, which is probably most of these). This doesn't negate anything in your comment, just adds a little bit.
  - ralphael 11y ago
    I think this adds some necessary context to the previous "300-500K" comment.
    - rdl 11y ago
      Yeah, I meant scoped within peak-earning-tech-people.
- ccarter84 11y ago
  Jeesh, 500k? Guess I'm in the wrong industry....
roymurdock 11y ago
Conversely, if the overall market is doing poorly (which it is), you'll get hit in your 401k/pension fund/retirement account. To which degree falling housing prices and falling savings funds would cancel each other out, I do not know. If it were just Box and Square that were doing poorly, you would be fine - these recent IPOs have relatively low institutional holdings as a % of total. Twitter, Facebook, Yahoo on the other hand - upwards of 60% of the stock is owned by institutional investors, AKA your retirement fund and Vanguard ETFs.
pfarnsworth 11y ago
It already happened starting in December. House prices are down and competition has dropped. We'll see if this trend continues in January but my bet is that price houses will continue downward. The only problem is that interest rates continue to be low, so some people will always have the ability to outbid others.

AngrySkillzz 11y ago

Tech stocks and small cap stocks tend to have a pretty high beta too, so it's not super surprising that Square's price would exaggerate recent market movements.

monkmartinez 11y ago

Your definition of minor is vastly different than mine.

myth_buster 11y ago

WaPo: Global markets plunge on oil/China fears. https://www.washingtonpost.com/news/business/wp/2016/01/20/new-turmoil-as-global-markets-plunge-on-oil-china-fears/ https://www.washingtonpost.com/news/business/wp/2016/01/20/n...

ihsw 11y ago
To add more context to this -- the markets have been sliding since Sunday due to Chinese intervention in the markets (including raising RMB reserves for Chinese banks), and there is a lot of shakeup expected from the lifting of Iranian sanctions and the Saudi Aramco IPO internal debate (could be largest IPO in history and it would be company with the largest market cap in history, yes bigger than Apple's). The environment should stabilize by 2016Q2.
- arcanus 11y ago
  > it would be company with the largest market cap in history, yes bigger than Apple Apple is not remotely the largest company in history, when adjusted for inflation. The The Dutch East India Company, for instance, was worth over 7 trillion dollars at one point. Likewise, Standard Oil held a monopoly on all the USA's oil at one point and certainly had a several trillion dollar valuation. Saudi Aramco will be massive, certainly. But not without precedent in history.
  - elemeno 11y ago
    There was an article in The Guardian this past weekend about Saudi Aramco which estimated it's value at $10tn, which would definitely put it in a league of it's own when it comes to total value. Saudi Aramco – the $10tn mystery at the heart of the Gulf state - http://www.theguardian.com/business/2016/jan/16/saudi-aramco-10-trillion-dollar-mystery-heart-of-gulf-state http://www.theguardian.com/business/2016/jan/16/saudi-aramco...
- chishaku 11y ago
  > The environment should stabilize by 2016Q2. Don't hold your breath.