You have been playing with axes in front of my door.
You may want to read up on what happen during dotcom bust and financial crisis. You don’t have the true stock experience since you were not into stocks then. 8 years ago is after the bust and has been in a bull market. You have yet to learn how to deal with the emotional stress of losing 50%-90% of your net worth 
The impact of mismanagement is not the same across people of all backgrounds.
The California forest fire did not hurt me but it did hurt those
who lost their homes. Take another example. A simple car breakdown
may badly hurt finances of a daily wage earner. Not only he loses
the work that day but also has to cough up earnings worth several
days of work to get the car running again. However, a car breakdown may
be no more than a minor annoyance to a person who has two or three cars at home.
The decline of California in national politics can be gauged from the fact
that a successful politician, and the senator from the state of
California, Kamala Harris did not even cross 3% popularity
threshold in Democratic Primary. She was kneecapped by a relatively young congresswoman from a politically insignificant state (HI).
Problem is that Kamala did not go to discussions with a vision of
the country that would resonate will with democratic voters, let alone
those who vote conservatively. She failed in primaries
while she is doing good in California. That is the divergence I am
talking about. The best California had to offer was not seen
the same way outside.
Pull up a chart of SF Case Shiller. Look at the dips in the last 40 years and ask yourself why they happened, and what followed those dips 10 years afterward.
None of these so-called California declines are new. CA has always been expensive and people have always been moving out to less expensive locales. But in their place we have more educated and more risk-taking immigrants moving in. Are you assuming none of these CA problems you are seeing will get solved? I don’t think I agree.
How much VC money is invested in CA compared to all other states? Silicon Valley is itself head and shoulders above everybody else. The distant second is NYC which is hardly a paradise according to your standard. If you tally all of CA including LA, SD and Sac we have orders of magnitude more than other states. That means the next round of mega successful companies will still be in California.
Follow the money.
2019 stat is not yet available. Here’s a Bloomberg article looking at 2018’s deal flow:
Venture Capital Keeps Flowing to the Same Places
Note that among CA regions, only SF and SV are separated out. Just these two regions account for close to half of ALL VC funding in the US. If you add in SoCal and Sac we may be close to 60% as a state.
California declining? Really?
My manager once explained me subtlety one day in a long one-on-one.
He explained that people use emotions to make decision and then justify (or rationalize) the
same decisions with logic and facts. So most of the data driven (or evidence based)
decision making usually suffers due to desire to pick and choose the facts and figures.
First law of computer science is : Garbage in Garbage out. Besides the quality
and completeness of the data, the assumptions built into a model are equally error prone and may never become true.
That said, the data you have presented do present a strong case to argue that bay area is capable of rising again after a fall. But, Bay area does not have a very long history of being a technology power house. Computer, software, and lot of innovation in early periods of electronics and computer happened outside Bay area (like in Texas and east coast) . Bay Area was an open field and orchards just 50 years ago. Plenty of empty land, and supply of immigrant to fill in or even to replace the population (immigration > emigration ) fueled the growth. Will this equilibrium continue going forward? At some point of time (immigration == emigration ) and for that dynamic equilibrium to continue we must assume that all the immigrants will come with superior skills and talents than the people they will replace. I do not know for sure that will happen. But, I will agree that these changes will take a while (like 10-20 years or even longer) to show up. Detroit was once a thriving city And so were Chicago and Pittsburgh.
I also read somewhere. When an organization is in distress, the talented and capable people are difficult to keep and bad ones are hard to get rid off.
I am not making a case one way or other, just saying that these data and numbers are like stock market. They may change up or down.
Detroit’s fall is not really due to anything it did or did not do. It died because manufacturing in the US was in steep decline starting from the 70s. Similarly, for as long as information technology is still a major driving force Bay Area will continue to do well. I define information tech very broadly to include even biotech which was very heavy on “information”.
The network effect among talents and capital is so strong it will almost conquer any 2nd or 3rd level defects you cited.
Kamala Harris is the Nixon of the Democratic Party. She knee capped Biden with her bussing BS. She is a menace that people see through. The Democrats need a moderate who is likable. Maybe Bloomberg can save the party. Warren will destroy it.
Since we are talking about population and RE prices. @manch Can you translate your graph to be relevant to RE? Eg. Jobs created per $B VC. From what I have gathered, recent startups employ less people 
i.e. jobs created per $B VC is decreasing. So a higher VC investment today doesn’t imply a higher number of jobs created c/f x years ago.
Did he overhear what I told my sons?
If the next Facebook and google employ way fewer people, would they need to hire in faraway places like Austin? 
Relevancy, sir! We are talking about BA prices. Are you tacitly agree BA prices have ATHed or the Peak California theory? Btw Peak California not a declining California.
You always said it better than me.
It’s all related if you think about it. What’s next after peaking? Decline of course. If it keeps going up where is the peak?
Currently Bay Area tech companies have to hire in far flung places because local talents are not enough for their growth. Therefore, even if the next mega tech companies have far fewer employees, the worst that will happen is they stop hiring out of BA.
It’s just like RE radiating out of Palo Alto. The far away places are always the last to go up and the first to go bust.
Far away places in this statement refers to exurbs and non-Fortress area.
New guys are the ones pushing housing to be expensive. If no new guys, prices unlikely to rise much or even decrease.
How long would that be? 5, 10, 15, 20, … years?
Disclosure: I am at a stage where won’t be putting new $ in SV’s RE. Not so drastic as @Jil
No more,
Local maxima vs global? Why would you concern yourself with local ones?
How much of your stock portfolio is invested in Bay Area companies? That should tell you something about BA economy. Plus, isn’t your entire Austin RE premise based on a few Bay Area companies hiring there?
Now you’re getting it. No new employment in BA, new employment in Austin.
HQ1 can remain in SV. Can have other HQs elsewhere e.g. Austin and Virginia.
Wake me up when Austin gets more VC funding than SV. 
Especially now that that unicorn bubble is popping. They’ll be laying off not hiring.
Also, it’s been pointed out a bunch of times VC money is attributed to HQ location. However, companies are going outside SV for offices earlier and earlier in their lifecycle. That means less of the SV raised VC money will vest in SV.
Also, Detroit’s decline started in the late 50’s well before the manufacturing peak. It started after Detroit decided to tax businesses, and they started to move to the suburbs. The suburbs still grew and prospered for decades longer. They didn’t peak until the dotcom bubble bust.
Didn’t realize this. That debunk @manch misconception that more VCs invested in SFBA mean more jobs in SFBA.
Sure. How much of it flows out of Bay Area vs staying?
Tomorrow’s big companies are today’s tiny ones nurtured by VC. When half of VC money is invested in BA, where will they most likely be?
You’re missing the forest. It used to be nearly 100% of the money stayed in SV. Now it’s less than 100% and the number keeps shrinking. The trend is in the wrong direction and isn’t likely to change.
