[quote=CA renter]“SOME time after the dotcom boom turned into a spectacular bust in 2000, bumper stickers began appearing in Silicon Valley imploring: “Please God, just one more bubble.” That wish has now been granted. Compared with the rest of America, Silicon Valley feels like a boomtown. Corporate chefs are in demand again, office rents are soaring and the pay being offered to talented folk in fashionable fields like data science is reaching Hollywood levels. And no wonder, given the prices now being put on web companies.”
Yes, interest rates determine what people do with their money and change the risk/reward ratios. I would argue that low rates most certainly push people into all kinds of investments they normally wouldn’t make, and at prices they normally wouldn’t pay…including housing (for personal use and for investments), and other financial and non-financial assets.
It is what it is…[/quote]
Interesting article, CAR. I’m out of the stock market right now but I DO think there will be FB and Linkedin copycats who will try to cash in on the “irrational exuberance” of investors due to the huge IPO’s about to spin off. These two aren’t the only ones. One of my kid’s companies in the heart of SV is soon to spin off as well (unrelated to FB and Linkedin so has its own specialized mkt), and gave all their employees stock with an option to buy more shares.
In the OP’s case, I think it is sad that only mostly fairly nondescript 1100 to 1500 sf homes are available in his price range in their stated preferred 3 micro-areas. SV DID take a nosedive in value for about 1-3 yrs (2000-2003) and then its prices were back up again. In about 2007-2008, I was again seeing fixer 2000+ sf ranch houses with good bones on 1/3+ AC lots in Saratoga with asking prices of $475K – $550K. Those days are permanently gone, methinks. Like Fleetridge (SD), which has these same types of properties on slightly smaller lots, there are few to zero available now which have not already been remodeled. The cheapest (unremodeled) one I saw online about ten days ago had an asking price of $1.175M and is no doubt gone by now.
The OP is in a situation where he is “waterlocked” on two 45-mile sides. Save “Foster City” (encumbered by HOAs/CFDs) there hasn’t been any SFR tracts developed there in at least 40 years. He and his spouse must accept the inventory that is available to them in their price range and be happy that their daily “commute” will be =<20 mins.
The SF alternative might be worth looking into if they knew they would not have a family. It will likely NOT be a SFR. Cheaper alternatives are Daly City, Milbrae and San Bruno. Since they weren't too thrilled with what they already saw in their preferred areas, I can't see them liking what is likely on offer in these 3 small cities. Daly City, in particular, has many substandard (<5000 sf) lots.
The SJ/Morgan Hill alternative is would likely be a lengthy daily commute in heavy traffic for them, IMO.
The (bridge) alternative is having a completely different lifestyle entirely. It's not the same as commuting from 92028 Esco to Carlsbad. In the long term, it will likely prove to be unsustainable ... very tiring and "hardscrabble," IMHO, ESP if they start a family. It will likely eventually cause both of them to look for employment in their own county.
Given the choice, I'd make the best deal I possibly could on a 50's ranchette on as large a lot as I could get in one of my 3 preferred areas and be happy :=}
Overall, I'm bullish on SV, regardless of how "irrationally exuberant" it may sound to some. For many reasons, it has an extremely high quality of life which cannot be duplicated in SoCal or inland counties. One of which is very careful planning by the forefathers of its many jurisdictions. This is part of the reason for the higher values there which has nothing to do with the presence of tech companies.
