[quote=sdrealtor]I dont think anyone can predict the future and writing off the booming tech industry as a bubble is a bit naive. What is occuring in your area is not all that dependent on artificially low rates. You are in the center of the worlds tech industry which is the hottest sector on the planet now and should remain so for your lifetime and your childrens. Once Facebook mints a slew of new millionaires it will only be time before the next tech behemoth IPO follows. Do you think that one will come out of the Bay Area or Peoria? It is what it is….
Beware of LETDLITA![/quote]
“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. The stock/IPO market and private equity/VC/etc. funds are flowing with cash that is desperately searching for a pittance of a return. We are witnessing the continuation of the credit bubble, and it will continue for as long as interest rates are at these artificially low levels, IMHO.
