[quote=Rich Toscano]So I just don’t see this as being a big issue for San Diego housing as a whole. It’s a big city.
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Hi Rich, let me start by stressing that I don’t see this as a big issue, particularly for SD housing as a whole. My view however is that this will impact areas that are popular with QComm engineers. (And probably overflow a bit into more expensive areas where management and those with large stock options would have bought. Or long time employees would have been move up buyers.)
Note my previous post:
[quote=XBoxBoy]If it is true thousands laid off in San Diego, then I would think that’s enough to impact housing market.[/quote]
We got 1314 layoffs. Not into the thousands, but over a thousand. So the impact will not be large. Will it be large enough to show up in the charts you put up every month? Maybe, but maybe not. But I do think it will be large enough to impact specific neighborhoods. (Note though that impact is not equal to collapse)
[quote=Rich Toscano]So even if 4k people get laid off from qcom, that’s less than 1 month’s job growth. And that assumes that none of these people will find other jobs in San Diego, which is of course not the case. Given the general state of the tech industry as I see it (which is: techies are in high demand), I would be surprised if even half of the people had to move out of town. Let’s say 40% have to leave — now we are down to about 1 week’s worth of San Diego job growth to replace those folks.
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I don’t think this is a fair argument. While undoubtedly some of the people will find jobs in SD and not move, for everyone who does stay, there is one less person moving into SD to fill a vacant job. After you lose the 1314 jobs, the number of people employed in jobs that pay well and the number of houses available remain the same regardless of who moves and who stays. And the bottom line is there are now 1314 fewer well paying jobs in SD. And that translates into fewer buyers and more sellers which in turn impacts where supply and demand balance. (Regardless of who stays and who goes)
[quote=Rich Toscano]
That said, I could see there being an impact in the surrounding areas that are popular among QCOMers. If enough people need to move, there could be a bit of a mini-glut in that area for a while. But I would view that more as an opportunity for people who are looking to buy in those areas — not as a game changer for the overall housing market.
Do you think I’m missing something?[/quote]
No, I think we’re more in agreement than disagreement. I probably think there will be more of an impact for three reasons: 1) Psychological impact due to job uncertainty, 2) not agreeing with the some people will stay argument, and 3) (something not yet mentioned) stock options of QCOMers in the past were a source of big down payments, but QCOM stock options probably aren’t as lucrative as they used to be.
Lastly, I’ll also mention that while I’ve been a housing bull for the last several years, I’m beginning to wonder if it’s time to shift towards bearishness. House prices have been going up around 10% a year for several years, yet general inflation has not, nor has wage growth or incomes. I think we’d both agree this can’t go on forever.
So I wonder: when does this run up start to slow? to stall? does it turn back down or just ride steady for a while? One thing I did learn from 2006 is that house price trends are like aircraft carriers. They take a really long time to turn. Could the QCom layoffs put pressure on that turning? Personally, I think so. But QCom layoffs won’t turn the housing market all by itself. No where near. But QCom layoffs along with other forces? Maybe. But more importantly, I think it’s imprudent to extrapolate the current trend out indefinitely into the future. (But I half suspect you’d agree with that principle too, even if you disagree with other details of my argument.)
