Entries Tagged as 'Palo Alto'
February 19th, 2008 · 2 Comments
I’d like to thank Kristen Emery at Princeton Capital in Palo Alto for providing me with the first bit of information that actually explains what the changes to conforming loans will mean to someone in Silicon Valley trying to buy a home.
A little light reading for you:
We have seen a whirlwind of legislative activity these past few weeks! There is much confusion surrounding the recentlypassed Economic Stimulus Package and higher loan limits. Unfortunately, the new law can be confusing to decipher, andnot everyone will benefit. For this reason, we have provided an outline below that clarifies what this new law means for youand how you can benefit from the higher loan limits.
Description and Overview:An economic stimulus package just passed Congress on February 7, 2008 and was signed into law by the President onFebruary 13, 2008. This new law is effective immediately and includes a temporary increase in both the FHA andconforming loan limits to as high as $729,750 in high cost areas. This means that the interest rates on many mortgages willgo down because these loans are now eligible to be purchased by Fannie Mae and Freddie Mac or insured by the FederalHousing Administration (FHA). Previously, the FHA was only allowed to insure loans with balances lower than $200,160 -$362,790, depending on the county where the property was located. Also, Fannie Mae and Freddie Mac were only allowedto purchase loans with balances at or below $417,000. This resulted in limited options and higher financing costs for thosewith loan balances above these limits. The new law substantially increases these limits in high cost areas and opens upnew options and lower financing costs for many people.
How to Determine “High Cost” AreasThere are two things you must know in order to determine if you are in a high cost area:
1. Understanding the Formula
If 125% of the local area median home price exceeds $417,000, the temporary loan limitwould be that 125% of the median home price with a cap of $729,750. Here are threeexamples to illustrate this concept: If the median home price in your area is $375,000, 125% of that number is$468,750. Thisis above the current $417k conforming loan limit. Therefore, the conforming loan limit inyour area WILL change and go up to $468,750. This number is also higher than thehighest FHA loan limits, so therefore your FHA loan limit will also go up to $468,750. If the median home price in your area is $650,000, 125% of that number is $812,500.This number is greater than the maximum cap of $729,250. Therefore, the conforming loan limit in your area willincrease to highest allowable amount under this new law which is $729,250. (Our median home price is $612,000 for Santa Clara County).
2. Determining the Median Home Price in Your Area
The Secretary of Housing and Urban Development (HUD) will publish the median house prices within 30 days of the billgoing into effect (30 days from February 13, 2008). HUD does not have any interim stats or information for us to use. However, the bill also states that HUD can use any commercially available data if they are unable to compile theinformation on their own within the 30 day timeframe. With that in mind, it is likely that HUD’s numbers will be relativelyconsistent with the data published by the National Association of Realtors (NAR), which already has a solid track record oftracking and publishing this information on a quarterly basis. Therefore, until HUD actually publishes their version of the median home prices, the most accurate way to get thisinformation today is to utilize the data that is published by NAR. Ironically, NAR just released their latest median homeprice update for the 4th quarter of 2007 on February 14, 2008! Contact me today and I’ll research your info and let youknow exactly what the median home price is in your area and how you can benefit from this information.
What do all the dates mean?
There is some confusion because the bill has a provision that says the higher limits areonly effective for loans originated between July 1, 2007 and December 31, 2008. Inshort, the reason it is effective beginning July 1, 2007, is because the credit crisis startedto unfold in July and August of 2007. Mortgage market conditions rapidly deterioratedalmost overnight. Many secondary market investors suddenly refused to purchase loansthat couldn’t be sold to Fannie Mae and Freddie Mac. (For more info on how this processworks, please see the article entitled Saga of the US Mortgage Industry.) Unfortunately, many mortgage banks had already funded these loans in their ownportfolio or through their warehouse lines of credit. Their intention was obviously to sellthese loans on the secondary market after the loans were funded. However, the creditcrisis prevented them from doing so, and they were stuck holding these loans in theirportfolio. The July 1, 2007 date in the bill is designed to allow these lenders to unloadthese mortgages and sell them on the secondary market to Fannie Mae and Freddie Mac.
However, the July 1, 2007 date has no bearing whatsoever on new refinance transactions!
In other words, it doesn’tmatter when the loan you are refinancing was originated. The old loan could have been originated in 2005, 2006 oranytime before or after July 1, 2007 and it would have no effect whatsoever on your current purchase or refinancetransaction.
If you are refinancing a new loan today, whether it is a purchase or refinance transaction, that loan issubject to the new limits set forth in the bill.
The other date of December 31, 2008 means that the old limits will go back into effect after this year. In other words, now isthe perfect time to buy a new home or refinance your mortgage because after this year, your costs will be higher and youroptions more limited again.
When does this all go into effect?
February 13, 2008 – immediately upon the President’s signature. Therefore, HUD is obligated to publish the median homeprices within 30 days of that date. However, Fannie Mae, Freddie Mac, and various wholesale lenders may have different policies as to how these new loans are going to be priced and underwritten.
- - - Information provided by:
Tags: 2008 real estate market
, Conforming Loans
, first-time buyer
, Mortgage Forgiveness Debt Relief Act of 2007
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Tags: * Type of Content · Analysis · Burlingame · Buyer · Buyer and seller tips · Buyers · Consumer · Financing Process · For buyers · Foster City · Loan Application · Market updates · Menlo Park · Mortgages · Mountain View · Palo Alto · Preapproval · Prequalification · Redwood City · Redwood Shores · San Carlos
February 19th, 2008 · 1 Comment
. . . Said my friend Amy to me the other day. Since she is sort of a typical first time buyer, (actually not), I decided to make an example of her and contribute to her 15 mins of fame.
Amy is your somewhat typical Sillycon Valley MBA tech-marketing type. She works in marketing for a large company, so her income is derived from her salary, as opposed to commissions or stock options that may or may not vest. The company is stable, so her bonuses tend to be consistent and her income fairly predictable. She recently moved from one giant tech company to a large one, so she has a number of years of experience in her industry and job classification, excellent credit, and some equity from a condo that she sold.
Being an MBA, and financially conservative (politically liberal), she can comfortably afford something in the $650K price range, even in the current lending environment. The previous idea was for her to take out two mortgages, a conforming loan of $417,000, and then a second or equity line to cover the rest.
Now that Mr. W. has signed off on the stimulus package that included a short-term increase in the conforming loan limit for 2008, Amy’s interest in buying a house has gone up. The tax rebate will let her buy her kids a happy meal and some new jeans, so her interest is much more in the mortgage changes.
At the time of our conversation, the difference in rates between a conforming (under $417,000) and jumbo ($417,001+) loan was about .75%, depending on a million things, which I will leave to co-contributor Eric Trailer to explain. Jsut plugging in some numbers, on a loan of $585,000 (10% down on our $650K house), her payments would drop about $4300 a year excluding taxes if that loan was at the lower rate. Now we are talking interesting.
Admittedly, this is very simplified, because it doesn’t take into account the cost of a conforming first and then a second, or whether lenders will have tiered pricing based on the loan amount, or credit scores, documented vs. non-documented income, etc., etc., etc.
My intent is to show the effect of this new law on “normal” Silicon Valley home buyers who have “normal” jobs, and are trying to put a roof over their heads. While the tax rebates of a few hundred dollars will only have minor impacts on most of us (I get $300, I think), the effect on home buying capability will be potentially significant.
Let the comments fly, and thanks for reading.
Tags: 2008 loan limits, Conforming Loans
, economic stimulus
, Home buying
, Jumbo Loans
, mortgage mania
, mortgage rates
, new home buyer
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Tags: * Type of Content · Buyer · Buyer and seller tips · Buyers · Consumer · Financing Process · For buyers · Foster City · Local information · Market updates · Menlo Park · Mortgage · Mortgages · Mountain View · Palo Alto · Redwood City · Redwood Shores · San Carlos · Sunnyvale
January 17th, 2008 · 4 Comments
I had promised myself to be nice to Teresa Boardman, to not gloat…alas, her post Cold, But Beautiful (designed, I suppose to make one think St. Paul, MN is actually habitable…by humans) got me thinking…
Bayfront Park, just down the road…60 degrees…clear blue sky.
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Tags: Consumer · Menlo Park · Palo Alto
January 16th, 2008 · 7 Comments
Mark Twain, it seems, merely popularized, but did not actually coin the phrase Lies, Damn Lies, and Statistics. That honor belongs to none other than the British statesman Benjamin Disraeli, the first Earl of Beaconsfield, KG, PC, FRS. (With all these acronyms after his name, one wonders if he may have been the first Realtor!)
I’ve ranted not infrequently about how real estate is local, local, local. What nationwide, statewide, or countywide prices are doing may or may not reflect your city. The overall trends in your city may not be a good indicator of your particular neighborhood.
And that’s where Benjamin Disraeli’s famous quote come in. You can make numbers tell whatever story your bias prefers.
The story I’m about to tell is hyperlocal if ever there was one. If you’re not in this immediate area, the lesson for you is not in these specific numbers, but in the notion that you have to understand your local market.
Here, for instance, is a pretty bad story to tell, and it appears that the story, as told by the great numerical storytellers of Altos Research, is quite simple: home prices in Menlo Park are in freefall, with the median having dropped from an all-time high of $1.65M in mid-2005 to a current $875K-ish. 2007 prices have — apparently — dropped by 30%:
That story just doesn’t make sense to me, however. The marquee towns up and down the Peninsula — those with good schools and their associated high prices — have actually done quite well over the last year. Why would Menlo Park be any different?
Palo Alto: Median prices mostly up last year, with a retreat in the latter part of the year, and signs of another season upsurge upon us…
Los Altos: An incredible run-up in prices, again with a dip last year, and again with a sign of a revival this year…
Los Gatos: A rise last year, though not as much as the other towns, and a pullback in prices in the latter part of the year…
You get the picture. Why then is Menlo Park so different? Have prices really dropped by 30%?
The answer? Most emphatically not!
In fact, take a look at these numbers, pulled from our local MLS. Of the twelve Menlo Park neighborhoods, only two of them had median prices go down in 2007 — and then only by 2-3%. Other neighborhoods saw medians rise from 5.6% (Flood Park) to 35.6% (Alpine Road Area.) The following graph shows the percentage change in median prices from 2006 to 2007.
How can both of the following two facts be true?
- Median home prices in Menlo Park have dropped by 30%
- Median home prices in 10 of 12 Menlo Park neighborhoods have risen, while median home prices in the remaining 2 neighborhoods have fallen, but only modestly.
The answer, Mssrs. Disraeli and Twain, lies in a different statistic: the amount of inventory on the market. Take a look at the story told in this graph, which shows the number of homes sold per year by neighborhood:
The sheer amount of data in this graph, and its size, makes it hard to read. The key points: the number of home sales in Menlo Park in 2007 was just over 400 — significantly lower than the wild years of 1999, 2004, and 2005. The number of homes in the “East of US 101″ neighborhood — the least expensive one – however, increased dramatically. The average number of annual sales in that neighborhood is 36, but last year there were fully 69 — just about double — the number of sales. In the higher-priced neighborhoods, on the other hand, there were fewer sales than normal.
Another graph…this one showing how many sales typically happen in a year in each neighborhood, followed by how many sales happened in 2007:
The lowest-priced neighborhood — East of 101 — had a dramatic increase in the number of transactions; almost every other neighborhood — in particular the expensive ones had fewer sales.
So this, ladies gentlemen is the key story that Mssrs. Disraeli and Twain — not to mention my stats professors — would want us to understand:
- The median price of homes in Menlo Park has indeed dropped in 2007.
- The price of most individual homes in Menlo Park, however, has actually increased in 2007: that is, most homes were worth more at the end of 2007 than they were at the end of 2006.
- The anomoly between the above two points is explained simply by the mix of the homes that were sold: 2007 saw a much higher than normal proportion of less expensive homes.
Tags: Altos Research
, Flood Park
, Los Altos
, Los Gatos, Menlo Park
, Palo Alto
, Real estate
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Tags: Consumer · Industry · Menlo Park · Palo Alto
A few days ago I spoke about the effect a mythical local insect, Vendus Encourigitis, has on housing inventory patterns here in Silicon Valley. It quite dependably comes out in the early part of each year, spraying homeowners with pheromones that make the notion of selling their home completely irresistible, thus putting an end to the seasonal problem we have here of low inventory. A close cousin of said insect, Achetus Encourigitis, tends to come out shortly thereafter, encouraging buyers to compete with eachother to buy the new inventory and drive prices up.
To continue the allegory, we look at another creature, this time a real one, but again with an allegorical function in this tale. I speak of the lowly plankton, a tiny oceanic life form: in size, seemingly insubstantial, but in importance, great. The plankton, you see, is at the bottom of many aquatic food chains, and if it were for some reason to disappear, the effect would be disastrous for the creatures that depend on it for food, and for predators of the creatures that depend on the plankton, and so forth: a ripple effect ultimately reaching most aquatic life.
The plankton of local real estate is the humble first-time homebuyer in the lower priced areas such as Redwood City, East Palo Alto, Menlo Park east of 101, parts of Mountain View and San Jose, and so forth. These folks purchased their homes in the last few years, assuming (as we all did) that prices would continue to rise, and they could then “move up” into a ritzier neighborhood with the equity they had built up. A higher than normal percentage (for this area) of such purchases were made with sub-prime loans.
Fast forward to 2008…these markets are hurting, some of them quite badly.
East Palo Alto’s inventory, for instance, has been marching steadily and worryingly upwards since early 2007…
…and prices have been going in the opposite — and expected — direction:
When inventory is over three times what it was a year ago, and prices have dropped by over 15%, the market basically freezes. Deflation does what it always does: makes the bargain-hunters decide to continue salivating just a bit more, because surely those prices are going to continue going down! Homes sell more slowly, prices continue downwards…it’s a vicious spiral.
And the plankton who own these homes? Well, if they can’t sell, that means they can’t buy the $850K starter home in Flood Park…and that homeowner can’t buy the $1.1M home in Palo Alto…who in turn can’t upgrade to the $1.6M property in Los Altos he’s been salivating over…who in turn can’t move to a respectable venture-capitalist-ridden neighborhood in Atherton.
The sub-prime woes affecting the lower-end markets are bound to eventually impact Palo Alto and its kin — though probably not as much as this analogy makes it sound. Why? In this market, there are plankton at almost every price point, so homeowners looking to sell don’t necessarily need to wait for a $500K homeowner to be able to sell his home. For every East Menlo Park’ian who was planning to — but no longer can — move across the 101 to buy an $850K home, there’s a dual-income tech couple who’s looking for the same $850K as their first home. Higher up the food chain, newly minted Googlers represent the plankton of the Atherton market.
But make no mistake about it: the lower end markets here are hurting, and will continue to do so for a while.
For instance, Redwood City’s inventory, much like East Palo Alto’s, is more than triple where it was a year ago…
…and prices in the two lowest quartiles are not looking pretty:
, Flood Park
, Menlo Park
, Mountain View
, Palo Alto
, Real estate
, Redwood City
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Tags: Atherton · Consumer · East Palo Alto · Flood Park · Los Altos · Menlo Park · Mountain View · Palo Alto · Redwood City · San Jose
Recent sightings of Vendus Encourigitis — a local Palo Alto insect that emits pheromones that make sellers drop everything they’re doing and get their home on the market immediately — indicate that 2008 may turn out to be a similar year to several of its predecessors.
Here’s how this insect affects the local inventory cycle…
Buyers, sellers, and real estate agents go into Trypophan-induced hibernation around Thanksgiving, and tend not to wake up till early January. Not many new homes come on the market during that time, and not many buyers are out looking for them. This tends to be a time of uncertainty in the market: sellers are not confident about putting their homes on the market because, well, other sellers aren’t putting their homes on the market; similarly, many buyers are spooked out of the market because they aren’t seeing crowds of competition at open houses — ergo, this must not be a good time to buy.
Putting aside all questions of whether such assumptions and actions are rational or not, come January, swarms of Vendus Encourigitis descend on the city and — kablooei!!! — before you know it, the market gets unstuck, sellers finally put the for-sale sign up, and inventory starts its predictable upward march. Shortly thereafter, a related insect — Achetus Encourigitis — begins its work on the buyers, and sure enough, they descend en masse on open houses and begin buying.
Data provided by our friends at Altos Research shows us the pattern for the last couple of years: inventory is at a low at the end of the year, and begins to increase as soon as January rolls around:
A number of nearby towns exhibit similar patterns…
What’s interesting about Los Gatos is that its beginning of the year inventory is somewhat higher than it normally is. Arn Cenedella* of Coldwell Banker notes a similar pattern in Menlo Park real estate, while Dave Blockhus*, also of Coldwell Banker, notes that Los Altos’ real estate inventory pattern is more similar to Palo Alto’s.
Further up the Peninsula, Burlingame has a similar pattern:
Roughly the same trend happens in many of the marquee towns up and down the Peninsula, while in the less tony towns a completely different picture is emerging — more on that in a later post.
* Dave and Arn are both clients of 3 Oceans’ sister company Domus Consulting.
Tags: Altos Research
, Coldwell Banker
, Menlo Park
, Palo Alto
, Real estate
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Tags: Altos Research · Buyers · Consumer · Palo Alto · Sellers
December 4th, 2007 · 9 Comments
It’s a sad world we live in. We kill several trees per real estate transaction, largely due to the increasing number of should-be-obvious-to-most-reasonable-people disclosures attached to every contract. At every real estate legal update (including the last one I attended before leaving Alain Pinel Realtors) we get regaled by stories about how a particular disclosure came into existence. The story usually has three high points:
- Person A buys a home from person B.
- Person A regrets buying said home.
- Person A hires clever attorney, who sues person B for not revealing that .
Case in point: The Public Schools Disclosure Impacted Schools disclosure, a double-whammy of sorts: a should-be-obvious disclosure wrapped up in a cryptic (and/or mis-worded) headline, now being used by several local brokerages.
…there is no guarantee that a student will be accepted in the proximate neighborhood school…buyers are advised to consult directly with the appropriate school district office to determine the availability of classroom space in the neighborhood of interest.
I’ll bet you this disclosure came into existence something as follows:
John and Jane sported 44 years of formal education between them — including at least three different Ivy League institutions — and an alphabet soup of credentials, including two MBA’s, a JD, an MD. They both had six-figure incomes (the first digit not being a “1″ in either case) and had stashed away $1M from years of aggressive saving plus some extremely lucky stock options.
John and Jane had a son, Joey, whom they were determined would have all the same opportunities they had, plus more. Though Joey was only 4 years old, they had already started on the application process for the Stanford, Harvard, and Yale classes of two-thousand-twenty-something. (Ok, slight exaggeration.) Part of the master plan involved sending little Joey to the absolute best schools available, and they just don’t make ‘em better (at least in California) than they do here in Palo Alto.
So…they bought a $2M house in Palo Alto, right around the corner from a school with an API score of 970.
Fast forward one year. Little Joey is about to enter kindergarten. John and Jane go to enroll him in the neighborhood school…and find out, to their horror, not only that Joey’s class is already full, but that their particular side of the street has been re-assigned to a different school! That’s right, a different school. Still in the Palo Alto school district, mind you, but the new school is a full half-mile away and (shudder!) the API score of said school is only 930 and the other kids going to that school come from the $1.5M-per-house part of Palo Alto.
Naughty, naughty! John and Jane should have done their homework. Arguably, their agent should have better informed them. And perhaps it’s not entirely unreasonable to assume (Benny Hill caveat to the contrary notwithstanding) that proximity to a school equals access to that school. However, given how important education was to John and Jane — you would think they would have done some friggin’ research of their own!
You know where the story is going. They head to their attorney, who looks over the transaction paperwork for a loophole. Aha! The sellers (maliciously) didn’t disclose that living in that home didn’t necessarily entitle Joey to attend the nearest school! Bingo!
What happens after the big lawsuit file arrives on the broker’s desk with a resounding (and expensive-sounding) thud doesn’t really matter as far as this story is concerned. Reasonable or unreasonable, dumb or not, win or lose…from now on, in every transaction, every agent, just to be careful, just in case…has to explicitly explain to his her clients that “proximity to neighborhood schools does not guarantee access.” To make sure they really get this point (and to reduce the risk of a re-occurrence of this lawsuit), they now have to also sign yet another silly disclosure.
Really, now, can’t we just all be reasonable?
When it comes to real estate transactions, I guess the answer is, tragically, no.
No tag for this post.
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Tags: Consumer · Disclosures · Industry · Palo Alto
Post-Thanksgiving Palo Alto Market Update
November 29th, 2007 · No Comments
The time between Thanksgiving and the New Year — actually, often until early February — is traditionally a pretty slow time of the year. With most people’s minds on the holidays and skiing in Tahoe, not many are thinking of buying or selling, and many Realtors take advantage of the lull to kick back, maybe do some skiing themselves, and perhaps do some planning for the new year.
This year looks to be much the same, with perhaps even less to do for Realtors. Inventory typically drops dramatically between November and January: though there are few buyers out and about, there are even fewer sellers, so the available stock of homes gets steadily whittled down. With inventory already at around half of what it normally is, the holiday season this year promises to be even slower.
As this chart from our friends at Altos Research shows, inventory of single family homes for sale in Palo Alto dropped from about 90 in November 2005 to about 40 in January 2006; similarly, it dropped from about 80 in November 2006 to about 25 in January 2007.
Here we are at the tail end of November, and inventory right now stands under 40. Not much of a selection for buyers, but what is out there probably will get steadily eroded, and the New Year may see only 15-20 homes still available.
Interestingly, both the most expensive and least expensive homes currently on the market are on Arastradero Road:
730 Arastradero Road, Palo Alto, is a tasty little 900 sq ft morsel on a lot size of just under 10,000 sq ft, brought to us by Celia Bella of Coldwell Banker. Price? Just under $1M.
- Those with some Google stock options to spend might want to consider 1781 Arastradero, (also in Palo Alto) a mile West-Southwest of its junior sibling, brought to us by Meera Gupta, also of Coldwell Banker. Its views, 13 acres, 11,500 sq ft of living space (not, I suspect, including the guest house), plus seven bedrooms and 10.5 bathrooms will set your average Googler back a scant 43,000 shares, or $29,850,000.
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Tags: Consumer · Palo Alto
November 1st, 2007 · 2 Comments
Having neither children nor a sweet tooth, Trick or Treating has never been much of a tradition for me. This year, however, the dear wife and I borrowed some kids and accompanied them on an a quest for as much teeth-rotting debauchery as possible.
To fit in, we of course needed costumes. I did a pretty bad rendition of a 70’s disco dude, while my wife took on the disguise of a Freudian slip. She’s the far better looking one in our marriage, but, alas, she’s also much more private than I, so you’ll have to content yourselves with this picture.
With drooling thoughts of a bigger haul, we headed across the San Francisquito Creek — and the city and county line — to Palo Alto’s ritzy Crescent Park neighborhood. Much to our disappointment, the pickings were slim — and not because the neighborhood had already been picked clean. At most 10% of the homes had any form of inviting Halloween decorations, and the homes that were offering treats were fairly skimpy with their offerings.
We soon headed back to our home turf in Menlo Park’s Fair Oaks neighborhood. Much, much better. At least 50% of the homes were taking part, and a good portion of those had gone all out with their decorations. Everybody was generous, and the trickle of treats from Crescent Park soon became a torrent.
The same two or three homes stood out. One in particular has become a neighborhood staple of over-the-top Halloween spirit, starting with a witch that seems to always run into the same telephone pole (though from different directions each year!), to a scary graveyard, to a haunted entrance…everything you could wish for!
, Fair Oaks
, Menlo Park
, Palo Alto
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Tags: Consumer · Fair Oaks · Menlo Park · Palo Alto
October 25th, 2007 · 3 Comments
The blogosphere has been buzzing since yesterday with news of the Microsoft-Facebook deal in which Microsoft invested $240M in Facebook in exchange for a 1.6% stake. To spare you reaching for your calculators, that gives Facebook a whopping valuation of 15 billion (with a b) dollars — not bad for a company with a 24-year old college-dropout CEO. (Perhaps part of the attraction of Facebook for Microsoft was a sort of nostalgic deja-vu on the part of Bill Gates, who is also a Harvard dropout, and was also running an exciting and very successful company by the age of 24.)
I’ll leave the analysis of the deal itself to pundits far more knowledgeable on the subject. What interests me as a real estate professional is the impact this deal may have on real estate in the area.
The connection, in my mind, is quite simply: One of the reasons why the real estate market here in Silicon Valley continues to chug along is that the tech industry is doing very well. VC’s are flush with cash, busy investing in the next big thing. Many of the local tech giants are having good years. The current bellweather of the local tech economy is Mountain View-based Google, and with its shares well north of $600 each, and its ongoing voracious appetite for skilled engineers, the Valley is feeling pretty brash and confident these days. That confidence, and the cash that comes from stock options, translates into buoyed demand for housing in this area.
So what happens if Google, which currently can do no wrong, stumbles a bit? What if it fails to hit analysts’ quarterly earnings target? What if it even fails to beat expectations by as much as analysts thought it would? What if its stock drops to, say, $300, over a one year period?
Without a doubt, that would have a negative impact on our local real estate economy, both directly — Googlers not buying as much housing — and indirectly — the overall attitude of the local tech economy getting soured.
Here’s where Facebook, currently housed in downtown Palo Alto, comes in. The company reminds many of us of the pre-IPO Google of, say, 5 years ago: great product, smart people, excellent management, modest cash flow, and HUGE ambitious and expectations. If Facebook continues along the same trajectory, it may well be that in, say, three years, it becomes our local bellweather. It may well have several thousand stock-option-engorged employees right at the cusp of their homebuying life stage. They may well do for our local housing economy what the Googlers are currently doing.
, Mountain View
, Palo Alto
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Tags: Consumer · Facebook · Microsoft · Mountain View · Palo Alto