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.
It occurs to me that with all this muttering about how “foreign investors” are driving up prices these days, and about how you need to be a Silicon Valley homeowner with plenty of equity to buy in this market, it might be useful to see who, in my experience, is buying now.
Some home buyers are convinced that if they just keep looking, they’ll uncover value in the marketplace. They don’t realize that after a while–a month, even just a week-end–they’ll be looking at the same homes with different addresses.
The California Association of REALTOR’s 2015 survey of recent California home buyers reveals that they plan to live in their newly-purchased home for two-hundred years. No, I made that up. It’s really twenty years, up from six years in 2013 and 8.8 years in 2014, but it might as well be two-hundred for all the sense it makes, at least here in Silicon Valley.
Learning from the past. It’s a popular idea after any big downturn, particularly among first-time home buyers apprehensive about making their first major financial decision. But the problem is that first-time buyers are like generals: they learn everything about the last war, but the next war is completely different.
“When discussing price bubbles, we feel that there are few terms which are more widely used and less understood”, says the professional real estate analyst. Amen to that, brother.
Is Silicon Valley real estate in a bubble?
Beats the heck outta me, or anyone else for that matter, but I’ve just run across an interesting opinion on the subject that I like because it agrees with my own experience.