Inflation should start to accelerate

Economy & Finance
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https://www.bloomberg.com/news/articles/2017-12-05/u-s-ceo-optimism-is-strongest-since-2012-on-sales-investment

Labor costs are now the #1 concern of CEOs. The cost of regulations had been #1 for 6 straight years.

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Hiring is slowing though. Tech hiring has slowed dramatically last year in Bay Area. I think slow employment growth is a concern. Not sure how the tax reform will affect jobs in 2018

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Check the unemployed rates in Santa Clara and San Mateo counties, still record low…Watch every month

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But rental market is a little soft now. San Jose rent decreased last year. SF rent decreased a couple of years ago.

Rental is soft but sales market is strong

5

Soft where?..Still hot in the exburbs like Stockton, Sacramento, Tahoe.
People are choosing to commute farther in reaction to high BA rents…
Watch exburb rents when they flatten that may me a sign of a downturn…plus exburb employment

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The bay area is 8M people out of over 300M in the US.

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For singles, cheaper to rent apartment or group together to rent a SFH in Fortress.
Surprisingly, rents in some further away neighborhoods are higher than Fortress.
Verify yourself.

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It’s surprisingly affordable to rent a room or a master suite in RBA. There are Chinese real estate groups on Facebook and I regularly see rooms for rent for around 1k to 1.2k. These are “fortress” areas like Sunnyvale and Cupertino. I suspect there’s a Chinese discount as the ad not-so-subtly screen out anyone who doesn’t read Chinese.

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Makes more sense for retirees to leave and some will.
But most will stay… let’s see how the tax bill changes things

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When I entered the fortress in 2002, my realtor told me to:

  1. Just buy, long term is always up;
  2. Once your children completed K-12, sell and move to somewhere cheaper (guess she meant SJ or Milipitas); and
  3. When retire, move to no-income tax states like Texas and Florida :grin:
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Nevada has no income tax too. No humidity, bugs or annoying people like the ones in Florida and Texas

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I think the easiest out of state place for BA is Reno and Tahoe. But the jobs market in Reno sucks. More Californians move to Oregon, Seattle, Phoenix and even Vegas.

Btw, how does weather compare between Reno, Seattle and Portland?

And why is Reno house much more expensive than Vegas? There is no presence of major home builders in Reno

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Reno job market is great. Rents are skyrocketing…But is a small town…MSA 500k…I look at as an exburb of Sacramento, just like Vegas is a exburb of LA …but with an MSA of 2m.?

Both Reno and Vegas are dominated by service jobs and retirees…Cheap housing and a low cost of living…But much higher cap rates than the BA…
As far as weather Reno gets little rain mild summers and has Tahoe and skiing…much better weather than the northwest…Vegas is hot for 3 months a year but pretty much ideal the rest of the year and no rain…plus word class restaurants and entertainment

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Manufacturing and construction are two of the top areas with job growth.

US is exporting oil to China. That should help even out the trade balance.