If only price of home rise but rents do not rise, it is time to wait.
For an investor, a home without enough rent projection is not good.
Buying a primary vs an investment rental is very different. For a a primary, most people want an area with top schools. For a rental, I’d go for an area with improving schools. That way you pay for mediocre schools, but can sell later with good schools. The appreciation should beat the average then.
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So the question is how much a buyer, looking for a home to live in, can decouple prevailing rents and the price of home?
It’s a lifestyle choice. Most people don’t buy until they have kids. It’s more about what you can personally afford and having stability for raising a family. What’s the price of family stability?
Good point. So, then the valuation is not based on what someone can economically extract from the property. But, how much it values to the buyer despite it. Like a picture from childhood days may value lot more to someone than the value of the paper it is printed on. Much like paying $5 for Starbucks coffee when a cup of coffee can be had for $1 at McDonalds nearby.
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The word from Intel is that no more hiring in Santa Clara site without approval from VP. Will Bay area become a center of jobs that will pay high but will be fewer in number? Does that mean that all the growth in mid-level jobs will go away from Bay area?
Intel SC has ~7000 employees. Google cloud in Sunnyvale alone added 6500 in Q3. If anything, more techies are moving from SF down to south bay after the poor IPO results.
OTOH, compared to around 2013, I see engineers’ compensation increased by 25~30%. This is a healthy 4~5% comp increase, and if we can keep this up, the affordability problem will go away. Previously, I said the golden number for houses that mid level engineers can afford is 2M. I see that moving up a little, based on folks on my team + friends.
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Remember my lunch buffet inflation index. 2010 $10 lunches now cost $15. Since 2010, Dollar has loss purchasing power by almost 50%. So, a 30% salary increase is just catching up with inflation.
So, my question: Has Bay area started shedding excessive technical workforce?
Nope. The problem with quantitatve easing this decade was even with qe, inflation didn’t quite happen.
Why Didn't Quantitative Easing Lead to Hyperinflation?
Like I said, I don’t notice shedding or halting on headcounts. Focus on skillsets has moved (mobile developers are out, cloud / ml developers are in) - and that’s healthy.
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Inflation is what you feel at point of sale. Not what some one writing in investopedia wants you to believe.
Most salary increases are catching up with inflation. Even cities in bay area raised minimum wages to catch up with inflation. Just check minimum wages over the years in these cities. Google isn’t there to pay more than they need to.
ML/AI were good area to be in 5 years ago. People who are working in these field tell me that market is overcrowded. You throw a rock, you are likely to hurt a ML/AI engineer.
Interesting. So, according to those in the know, what is the current hot field in tech?
How do you define a hot field?
What will be the new technology for tomorrow?
Or what occupation are paying most?
Or do you mean demand and supply dis balance for people to work?
Remember, google or anyone can hire anyone for nothing or even for a strange reason (like improving workforce diversity) and pay handsome salary. I know a son of a big politician who got paid handsomely as some kind of energy consultant in a foreign company.
20 Minutes Later: I am seeing trend where the salaries being paid are not as much but more engineers are being rewarded with huge amount of RSU (used to be options 10 years ago). So, actual earnings are no longer coming from W-2. Also, State of CA is making it difficult for companies like UBER and LYFT to pay with 1099-MISC and these part-time gig companies are being forced to pay with W-2. State of California is earning additional 7 Billion Dollars just by converting the drivers at uber from contractors to employee. Being a contractor gives you better control over tax sheltering and allows you to take larger income to retirement plans like solo 401 k and deduct your health care premiums. I think as a w-2 employees you do not get those tax benefits which are huge by the way.
This. And, if the people in ML/AI can’t really point to what they consider hot, they are probably missing the forest for the trees and calling the peak for this field a bit too early.
Yes. This is a good point. Demand and supply is not as much about the number of resumes you get for a req. But, do you get a candidate you want to hire. Enough graduates are being produced but not all of them will make a great programmer or algorithm writer. That is true for even traditional and
matured fields. You cannot still get a good engineer easily who can do classic thing like close timing on a chip.
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If contractor, they can have solo 401k , but as W-2 employee you have same shelter with company 401k, same tax benefits, in fact company may match in some cases. The completely hidden part as w-2 is company pays equal part 6.2% of Social Security when employees pay 6.2%.
Overall, if contractor earns $100k, that is equal to $125k (25% overhead with medical,Social security, espp, RSU and other coverage) of W-2 employee for the company.
UBER & LYFT or any other big companies prefer contractors over employee by this over head difference, but government forces them to take over as employee. The company liability on employees are higher than contractors.
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