Lots of good tidbits from this interview. Read the whole thing!
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Q: Is this the lowest inventory level you’ve ever seen?
A: It’s extremely close. In January of 2000, right before the NASDAQ peak, there were just 943 active listings in the county — that’s our all-time low for the start of a new year, and it included both single-family homes and townhomes. These last three years, we’ve been running around 1,100 to 1,200 active listings in January, which is still crazy low — and this August stood at 954, the lowest month since January 2000.
In this past year, if you measured price appreciation in Palo Alto versus San Jose’s Willow Glen, Willow Glen probably has appreciated more because it had more room to grow.
The second reason is the whole Google San Jose aspect. That announcement alone has significantly increased residential buyer interest all around San Jose, including downtown and in the Rose Garden and South San Jose. People realize the tech money is significantly going to move southward, so now you increasingly have buyers — who might otherwise stay on the Peninsula — coming down and competing for properties.
Q: What have you uncovered? What are your theories?
A: The obvious thing is that the NASDAQ has been over 6,000 for a while; that’s a lot of equity that people have that they’re able to translate into housing. That’s the no-brainer.
Another appreciation driver is the increasing use of Restricted Stock Units — known as RSUs — in loan qualifying.
Vested stock only or even unvested stock?
Even accounting RSUs is a news to me. Lenders are conservative.
[EDIT]
Private lenders are accepting, but I have seen one, trying to know who accounts RSUs.
From my experience, they count rsu as income, not just cash reserve. So unvested stocks but scheduled to be vested were counted when computing dti ratio.
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Private lenders are accepting, but I have seen one, trying to know who accounts RSUs. This is new to 2017 as previously no one accounted those.
For my information purpose only: Which bank/lender counts RSU unvested schedule into income?
Someone posted that article in one of the other threads. I think the RSU income means people are reaching. That’s not going to be good in the next recession.
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As soon as lay off or termination happens, all unvested becomes zero ! No doubt, if lenders are accounting unvested RSUs, they are inviting issues.
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I agree. That or sometimes companies get stingier with the refreshes. Most people get the biggest grant when they hire on. If you base it on the hire on grant, then that could be problematic in the future. Maybe I’m too conservative, but I always go by base pay. I don’t count bonus or RSU income.
I know mortgage brokers in Seattle are used to including RSU income, because of Amazon’s comp structure. The highest base pay in Seattle is $160k/yr. Everything beyond that is RSU income. Execs have targets for annual bonuses too. We get annual refreshes that vest over 1-2 years vs. the normal 4 year vesting.
Wells fargo and chase did that for my employer. Different companies may have different lenders that do this.
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So now we have a direct link between stock market and housing market. The higher the stock price, the more buyers can qualify for. Interesting! 
We always figured there was a link because of down payment size. The link in monthly payment is scary. Bubbles are always created by loose credit. The loose credit is beginning.
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“Beginning” is the keyword. Things will go crazy when Nasdaq hit 10K. If everybody’s RSU doubled in value in 5 years, SV and Seattle housing prices will zoom to the moon.
Are you confident you can time the top or are you going to hold through whatever correction or downturn that happens?
This is strange ! I have wellsfargo contact who did not account previously (2016). May be it depends on employer. On any case, I hate WFC as they are too conservative.
No timing. My timing skill sucks. Just hold them thru thick and thin.
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I have been told by my contacts at Wellsfargo & US bank that they can take RSU into income consideration.
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Wells Fargo and BoA used my RSU for pre-approval when computing DTI.
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