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In the past 3 years, all houses in my small neighborhood (6 out of ~40 houses) were bought by employees of Google, Facebook, and Apple. Last week, one nicer 4B
by TomVDB 8y ago
In the past 3 years, all houses in my small neighborhood (6 out of ~40 houses) were bought by employees of Google, Facebook, and Apple.
Last week, one nicer 4BR house sold for 20% less than a smaller 3BR house that sold in April for a ridiculous $2.4M (that then underwent major remodeling for 6 months.)
Now look at the stock price of those companies between then and now, and the increased interest rate.
AFAICS this has not to do with foreign investments unwinding or people moving out of CA, but houses having become too expensive compared to what people could afford earlier with a mix of increased fear and uncertainty thrown in.
- MrTonyD 8y agoI lived by the beach outside Silicon Valley. My neighborhood gradually became more and more deserted. Executives would buy houses in the neighborhood, and just stop by once or twice a year to use it. At some houses I never saw anyone ever - over many years. I think the real issue is that we let market forces determine housing prices and housing strategy. Housing is, like medicine, something that is poorly served by markets - since markets distort basic resources away from the common good.
- wpasc 8y agowhat do you believe is a better alternative? in your specific case, must one live in a house full time to maintain ownership?
- kharms 8y agoAn approach that's being tried elsewhere is a vacancy tax. This encourages either private use or leasing of the properties.
- WillPostForFood 8y agoOr you could allow more houses to be built. The market can’t work if building is restricted.
- snovv_crash 8y agoUnfortunately there isn't unlimited land with a good location.
- dsfyu404ed 8y agoSo let people build up like every sane city does.
- IWeldMelons 8y ago...and then have them taken over by absentee investors.
- general8bitso 8y agoManhattan?
- simple_phrases 8y agoThen investors will buy the new apartments/properties and leave them vacant. It happens in cities all over the US and Canada.
- mitgraduate 8y agoNot possible in high earthquake risk areas
- ashelmire 8y agoReassess and tax property as the primary means of funding the city. That will almost completely eliminate the problem very quickly.
- TheCoelacanth 8y agoUnfortunately Prop 13 would make that pretty much impossible to pull off without changes at the state level.
- TheBeardKing 8y agoI think enough people are waking up to the idiocy of Prop 13 now that it has a good chance of being repealed. It's being voted on in November 2020.
- MrTonyD 8y agoI remember reading that Sweden didn't want retirees to be subject to random market forces for housing. So they subsidized housing and in exchange restricted the profit when sold. So, really, the point is that we could set up systems to do whatever we want. Those who say "it can't be done" are expressing a philosophical position - while falsely claiming that they are just stating facts.
- kshacker 8y agoAbsolutely this. Imagine what a Facebook millionaire could buy when the stock was above 200 and now 140. 30% less down payment, no? Imagine what an Apple employee could put down at 235 vs at 140? Imagine what a Netflix employee could put down by cashing out at 400? Of course rates matter but from what I hear they will not go up much more from here. Eventually these companies will recover and most of them will go higher (they are becoming de facto monopolies) and the watch the prices although it may be a couple of years, but you never know, the stock printing machine is still running.
- thatfrenchguy 8y agoYou're assuming people don't sell their RSU when they get them, which is reckless behaviour.
- notyourwork 8y ago> which is reckless behaviour. It depends on the amount of risk and diversification you are looking for as well as where you are in your financial career. For example, if you have no college debt, and can afford to live off of your salary alone, leaving RSUs as company stock when they vest is no different than a non-employee buying shares of that stock at the vest price. Diversification is great but not everyone is in the same financial situation to assume there is a one size fits all rule.
- ac29 8y ago> leaving RSUs as company stock when they vest is no different than a non-employee buying shares of that stock at the vest price Wrong - if an employee holds stock in the company they work for, they are doubly screwed when things turn for the worse at the company. They lose asset value, and they may lose their job. Its a lousy idea to hold more than a trivial amount of stock in the company that employs you.
- prewett 8y agoYou’re not talking like an investor. An investor buys something because he thinks it will be worth substantially more in the future. He doesn’t care if there are short-term fluctuations. If you think GOOG will be up 500% by 2024, you aren’t going to sell before then, because as an investor, you aren’t investing with money you need, that’s what salary is for. So it doesn’t matter whether you stop working for the company or not. You have your 6 months living expenses in liquid assets, so you don’t need to seek your investments. With this kind of thinking, the parent is right that an employee not selling RSUs is the same an a non-employee buying stock.
- sambull 8y agoIn my area your competition is banks with investors (invitation homes/blackstone group). I'd say the problem is locale specific depending on the utilization and profitability for investments
- TomVDB 8y agoIs that in the Bay Area? I’m surprised that current prices make it attractive for a hedge fund to invest in rentals, because the price to rent ratio just isn’t there.
- mrkurt 8y agoThe rent/price ratio is reasonably attractive if you bet on houses appreciating and taxes staying the same.
- TomVDB 8y agoHedge funds (and my wife and I, but really my wife...) made that bet in 2010-2012. And it was a fantastic opportunity. It’s not a bet that I would make at today’s prices, so I’m surprised that a hedge fund would still do it.