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How would SF real estate be a hedge if the regional tech labor market becomes depressed? Lower wages in SF and the surrounding area should depress real estate p
by pinky1417 12y ago
How would SF real estate be a hedge if the regional tech labor market becomes depressed? Lower wages in SF and the surrounding area should depress real estate prices in SF, not increase real estate prices.
- adventured 12y agoIt won't be a good hedge. You'll take a bath on that real estate if the venture capital market seizes up (eg with higher interest rates and were a bubble to pop). Rents will fall, vacancies will soar, and a lot of construction will halt. I can't see what the parent meant, such that it makes sense as a hedge. The hedge (if one were really worried about a bubble popping) on SF real estate would be to sell right now - if you can get a high price - and rent.
- JimboOmega 12y agoI'd never enter the SF renter market as a landlord, given that it can basically only go down. I meant to suggest it as something you could short - it's an asset class that is tied to the health of the sector. Since it's hard to short the companies in the sector, you could short the RE as a proxy.
- JimboOmega 12y agoI meant to suggest SHORTING real estate as a hedge. Not buying it. You can accomplish this through companies that own property in the area.