Moving to Silicon Valley…rent or buy?

[BostonAndOC_RE_perspective]

Masayako,
The key to my question revolves around the SV market – is it more resilient than SoCal due to higher wages/less available quality housing stock/less number of desirable areas?

[BostonAndOC_RE_perspective]

SFM, TT, sdr,

Thanks for all the words of encouragement. I come to this site as the posters/responders tend to exhibit more intellectual reasoning than other sites. Many on the Lansner blog lump me in with the bears, but I’m just a young professional with a family trying to navigate my way in a fiscally responsible fashion.

[Bugs]

How much prices in that area will change will depend in part on how many of those properties end up in the must-sell category. If the area really is that economically stable and the price increases haven’t been based primarily on the lack of credit underwriting then there won’t be as much “gas” to burn off. It’s hard for me to imagine that to be the case, but I suppose it could happen. I don’t know enough about that regional economy to have an opinion.

[gn]

>> …on how many of those properties end up in the must-sell category

The number of “must-sell properties” correlates with the number speculators. The number of speculators correlates with the amount of greed.

IMO, SV folks are as greedy as folks in SoCal, if not more.

[Anonymous]

Smart move, to rent and watch things, B and OC.

Silicon Valley will be hit hard; it is the center of the bubble economy. I forgot where I read it, but it makes sense to me: along with overinvestment in housing, stock buybacks, private equity buyouts, etc., we have overinvestment in communications — software, Internet, mobile phones — of which Silicon Valley is the center.

If things get tough, economically, as I know they will, how important will be blazingly fast downloads, countless iterations of search software, etc.?

Nope, Silicon Valley will be ground zero for the decimation as stock and bond prices fall, causing pension funds to pull back their money from ultra risky venture capital and private equity, as the market for IPOs disappears, etc.

Rent and save. Next year, you will be ecstatic that you did.

[bob007]

Silicon Valley has a lot of Indian and Chinese professionals who make it as a rule to buy homes. They are responsible for driving up prices in this cycle 2002 – present.

I expect areas south of San Jose and in the East Bay to be hit hard. I doubt areas with good school districts to fall much. In any case I expect SV real estate to be stagnant over extended period of time.

[BostonAndOC_RE_perspective]

I resemble that remark

[BostonAndOC_RE_perspective]

JG – great points, though I will say that the broadband infrastructure is what the railroad was in the 19th century, and commerce will blossom as it gets built out. There are some crazy applications for blazingly fast downloads that can make life easier.

Renting and saving….

[dejams]

Please don’t generalize and blame the Indian and Chinese for driving up the prices. SV has no land to build and many professionals with high paying jobs. It’s supply and demand that drives up the price. They are not the ones with subprime load that will cause this housing market to implode. They also not the ones that take out a large chunk of money to spend on a hummer and vacations. Most them save for raining days and have at least 20% down payment for the home.

I also don’t see homes in Cupertino, Las Altos, or Palo Alto go down anytime soon due to good schools and neighborhoods.

[bob007]

” Please don’t generalize and blame the Indian and Chinese for driving up the prices. SV has no land to build and many professionals with high paying jobs. It’s supply and demand that drives up the price. They are not the ones with subprime load that will cause this housing market to implode. They also not the ones that take out a large chunk of money to spend on a hummer and vacations. Most them save for raining days and have at least 20% down payment for the home.

I also don’t see homes in Cupertino, Las Altos, or Palo Alto go down anytime soon due to good schools and neighborhoods. ”

I am not blaming them. I am not generalizing. It is true that they have kept the housing market in Silicon Valley afloat. Given their good financial habbits and good salaries they are unlikely to sell. Bottom line – do not expect any large declines in Fremont, Palo Alto, Mt View, Cupertino, Campbell.

BTW the homes in Palo Alto that sell for $1 million are crappy.

[Anonymous]

BandOC, you should have told me earlier that you were Indian or Chinese (which are you?). Given your earlier ‘loud’ statements, I thought that you were just some loudmouthed white guy from the Northeast, only some of whom are smart. On the other hand, all loudmouthed Indian and Chinese guys here in the states, typically, are smart.

[sdrealtor]

Funny, I just figured he was a young highly motivated go getter. I never even considered nor cared to consider what race or ethnicity he might be.

Oh well, color me a liberal.

[Author]

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