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Home values are starting to peak: https://www.zillow.com/palo-alto-ca/home-values/ https://www.zillow.com/palo-alto-ca/home-values/ https://www.zillow.com/red

by mbesto 8y ago

Home values are starting to peak: https://www.zillow.com/palo-alto-ca/home-values/ https://www.zillow.com/palo-alto-ca/home-values/ https://www.zillow.com/redwood-city-ca/home-values/ https://www.zillow.com/redwood-city-ca/home-values/ https://www.zillow.com/los-altos-ca/home-values/ https://www.zillow.com/los-altos-ca/home-values/ https://www.zillow.com/mountain-view-ca/home-values/ https://www.zillow.com/mountain-view-ca/home-values/ Which basically tells you one thing...people are starting to move out because it's too damn expensive.

deleted 8y ago
[deleted]
isignal 8y ago
I doubt it is people moving out that is causing the slight dip - https://julianalee.com/sunnyvale/sunnyvale-statistics.htm https://julianalee.com/sunnyvale/sunnyvale-statistics.htm - the move corresponds to increased mortgage rates via the Fed hikes last year. I also doubt this minor pullback to 2017 levels will last in 2019. It will be interesting to watch if mortgage rates or tech IPOs (2019) have a bigger influence.
- qqqwerty 8y ago
  Somewhat related to my sibling comment, but at least in the bay area, I think the movement in FAANG stock prices may be playing a bigger role than interest rates. A good chunk of employee compensation at these companies is in RSUs, and the stocks have been on a tear these last 5 years. Very roughly If you got a grant worth $120k/yr 4 years ago, that would be worth about 2-3x when it vests. That is probably why we are seeing a lot of folks on here claim that FAANG is paying 500k to senior engineers. More likely they are paying ~$200k base, and the rest is coming from vested RSUs.
  - Gibbon1 8y ago
    Guy that handled my mortgage said many the houses he's dealt with in the more desirable neighborhoods have a lot of 'odd financials' going on in the deal. Sources of money are odd. And stocks and other types of paper are being traded for the house.
gnicholas 8y ago
Just two data points, but the houses we've seen go up for sale in our neighborhood near Menlo Park were mobbed and went in a week. Prices were higher than I expected, as someone who has been watching the market. Both require massive ($200k+) renovations and/or retrofitting. Having seen this, and with the coming IPOs, I'd guess prices will continue to trend upward.
- qqqwerty 8y ago
  I think it will largely depend on how the new stocks perform. The early employees, senior engineers and upper management are probably already pulling in large enough salaries where they could afford to buy if they wanted to. But newer employees (last 3-4 years), HR, sales, etc.. might not have enough appreciation in their options to move the needle much in this housing market ($400k-$500k windfall does not go nearly as far as it used to, and that is probably on the high end for the median employee). This is somewhat due to the fact that these companies have had sky high valuations for so long (Uber was valued at $40B in 2014, projected to go public at $100-120B, so only 3x in 5 years).
smsm42 8y ago
In San Jose, they have already peaked some time ago. Not that the current "post-peak" prices are especially low... but the growth has slowed down for now.

by mbesto 8y ago

deleted 8y ago

[deleted]

isignal 8y ago

I doubt it is people moving out that is causing the slight dip - https://julianalee.com/sunnyvale/sunnyvale-statistics.htm https://julianalee.com/sunnyvale/sunnyvale-statistics.htm - the move corresponds to increased mortgage rates via the Fed hikes last year. I also doubt this minor pullback to 2017 levels will last in 2019. It will be interesting to watch if mortgage rates or tech IPOs (2019) have a bigger influence.

qqqwerty 8y ago
Somewhat related to my sibling comment, but at least in the bay area, I think the movement in FAANG stock prices may be playing a bigger role than interest rates. A good chunk of employee compensation at these companies is in RSUs, and the stocks have been on a tear these last 5 years. Very roughly If you got a grant worth $120k/yr 4 years ago, that would be worth about 2-3x when it vests. That is probably why we are seeing a lot of folks on here claim that FAANG is paying 500k to senior engineers. More likely they are paying ~$200k base, and the rest is coming from vested RSUs.
- Gibbon1 8y ago
  Guy that handled my mortgage said many the houses he's dealt with in the more desirable neighborhoods have a lot of 'odd financials' going on in the deal. Sources of money are odd. And stocks and other types of paper are being traded for the house.

gnicholas 8y ago

Just two data points, but the houses we've seen go up for sale in our neighborhood near Menlo Park were mobbed and went in a week. Prices were higher than I expected, as someone who has been watching the market. Both require massive ($200k+) renovations and/or retrofitting. Having seen this, and with the coming IPOs, I'd guess prices will continue to trend upward.

qqqwerty 8y ago
I think it will largely depend on how the new stocks perform. The early employees, senior engineers and upper management are probably already pulling in large enough salaries where they could afford to buy if they wanted to. But newer employees (last 3-4 years), HR, sales, etc.. might not have enough appreciation in their options to move the needle much in this housing market ($400k-$500k windfall does not go nearly as far as it used to, and that is probably on the high end for the median employee). This is somewhat due to the fact that these companies have had sky high valuations for so long (Uber was valued at $40B in 2014, projected to go public at $100-120B, so only 3x in 5 years).

smsm42 8y ago

In San Jose, they have already peaked some time ago. Not that the current "post-peak" prices are especially low... but the growth has slowed down for now.