Certainly it’s challenging for the average person to buy a home in Silicon Valley these days. It’s challenging for even the “tier 1” top 25 percent of Valley earners to buy. But is it more challenging than it’s ever been?
Shortly after Facebook moved from Palo Alto to east Menlo Park in 2011, a reporter from the New York Times contacted me about the alleged effect the move was having on home prices in the adjacent city of East Palo Alto and in Menlo Park’s Belle Haven neighborhood. He’d heard that Facebook techies were driving up prices in these traditionally affordable areas. I told him I didn’t believe it, and as I told him why, I could tell that I was ruining his storyline–and my chances of getting quoted in the New York Times.
Quick! Name one economist!
“Uh, Robert Shiller. I liked Irrational Exuberance. Well, I didn’t read it, but I heard about it. It’s great! He’s a genius! Everybody says so!”
It’s an article of faith for the real estate skeptic that abnormally low interest rates rescued real estate before home prices had a chance to decline to their natural level.
Nothing confirms the auction atmosphere facing today’s home buyers more than a series of emails I received this week.
“As January goes, so goes the rest of the year.” If that’s correct, we’re in for a heck of a 2013.
Open houses say a lot about how hot, or not, the real estate market is, and in no uncertain terms.