How the Coronavirus will affect Bay Area Housing Market

Bay Area
1739

Dollar could be backed by the supply of land (which means the amount of the dollars remain fixed for its life). Or amount of silver, or platinum. I could have provided a better answer if you had provided the details of what led to your question.

This is a good description on various forms of currency issuance models. What if we take away the monopoly of issuing currency from FED, and let 1000s of US bank to issue their own currency? What if there is some competition in the currency issuance market?

1740

I do not know about others, but for me, and some investors here, it is no brainer to jump on Cupertino, Sunnyvale and Mountain View market if there is a deal ! I do not intent to buy a real estate, but if I see a deal, definitely I may jump on the home either in Cupertino, Sunnyvale or Mountain view with nice 10k lot.

AAPL, NFLX, TSLA, GOOGL, FB…and other 100 big companies (50B or above in bay area) are not going away into bankruptcy near any time. They cut cost, as usual in every downturn, optimize it,grow further.

All these big companies, making use of WFH policies, trying to reduce/optimize the cost. When the S&P comes after a few dips, all these company employees will have much more wealth that current. It is too difficult to calculate or produce a report, but will happen in 5 years.

I am not telling bay area will not get affected, but will recover dramatically after a set back. In redfin old forum, there was a talk about RBA (Real Bay area), where wealthy and cash rich people bidding the home in the past. It is hard to get a deal in such places.

Year 2008, when real estate was deep issue, no one was giving mortgage for any home for six months. Even during that time, I heard two homes, appx 2.5M level, got full cash offer at Cupertino/Monta Vista.

My realtor repeatedly asking me to buy some home in Sunnyvale & Mountain View when it was deep discounted prices. We never listened to her (big mistake) and thereafter we were not able to buy a home as bidding price went up way high and still remains the same.

The only simple reason is this is not real estate down turn, but S&P service sector (airlines, entertainment, restaurant…kind of ) down turn and impact to these local BA companies are just domino impact, not direct impact.

1741

When Google, Apple, Amazon, and Facebook move to universal remote work models I will believe this.

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1742

Those Bay area firms are extremely vulnerable in growth. They cannot grow in Chinese market.
EU is creating digital rivals and digital barriers.
Russia has largest grain supplier to Middleast/Africa. The cheapest food and healthcare provider will become the tech platform choice. Elon Musk tweet in Russian when he is sarcastic

SF bay area firms has to out innovate the whole world and produce Jobs in rest of 49 states on scale that can compensate for job losses and tax revenues.
Plus Southern California which used to be Aerospace capital of the world simply dont have that business. and Hollywood/Disney will not be producing tax revenues. so just imagine State of California revenue requirements?


After the meeting, German Finance Minister Olaf Scholz said, “Fair taxation of international companies and large digital groups is more urgent than ever.”

French Finance Minister Bruno Le Maire said reaching an agreement by year end was “indispensible.”

“The (pandemic) crisis proved that these digital giants were the big beneficiaries of the crisis. They must pay their fair portion of tax,” he said.

1743

Wow, it’s a tougher environment than the past. None of this is going to change the fact that these companies are incredibly profitable and will play a central role in moving the economy forward.

Facebook is probably more vulnerable than the rest but they will all mostly be fine. I sincerely doubt that in two years these companies are going to prefer remote work models to in-person.

People who are moving away are self-signaling to companies their commitment to the company.

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1744

Actually even if these mega companies have everyone phoning it in from Kansas, it means they will no longer be competitive. The younger, hungrier firms will take their place and eat their lunch.

China’s tech scene is the closest to what we have in SV. They got the virus firmly contained and people all go back to work in the office. I am not aware of Tencent, Alibaba, Meituan and Bytedance have people phoning it in. If remote work is a magical devise that boosts creativity and productivity how come the Chinese don’t do it? Or the Koreans, the Taiwanese, the singaporeans?

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1745

All those Asian countries live in apartments mostly. so it wont matter to them much if working in office or in apartment. they will need take train.
here we have choice of living in large home at relatively cheaper area with variable tax rates in diffferent states or counties. with freedom to use vehicles. so if these firms want attract best. they better offer full flexibility work from home with small lab type offices in every major metro area. this will spread payroll and real estate taxes.

1746

So what you are saying is that remote work doesn’t boost productivity or add to a company’s bottom line. Companies have to offer to because employees demand it.

Facebook says your salary will be cut if you move out of Bay Area. It doesn’t seem to me employees hold all the cards. There is also what @DoctorOcho mentions. You are signaling to management you are less of a company man than the next guy who stays at office day and night, while also have personal face to face access to management.

In a company where there are options to either be completely remote, versus working in office at least part of the workweek, there will be two tracks of career ladder. The completely remote worker will be the community donkey doing grunt work. The person with office access and thus management access will be on the fast track of advancement.

By moving away and phoning it in you are broadcasting to the whole company which track you want to be in.

1747

People get paid for the value they bring to the work and corporate objectives. Being nearer and accessible to management can make workers more coachable, monitorable, and manageable, and probably, therefore, more valuable. The question is how much more valuable than someone who is less near and at what cost (to the company)…

1748

This is the same issue when all manufacturing moved to China and elsewhere. Now, all IT and WFH possible jobs are moving out USA.

However, companies moving this job fro cost reduction and profitability reason which will help USA.

This is exactly Trump hates it that USA becoming a marketing place, while overseas becoming production center.

With communication speed is getting higher (from MBPS to GBPS) and arrival of 5G technologies, the distance is reduced virtually as if people are near.

Nowadays, we are using video calls overseas using various available technologies.

1749

Q2 2020 VC funding activity. SV, of course, still takes top spot. But note that 4 of the top 10 are in California. Austin nowhere to be seen. It seems even Santa Barbara is a better place for tech than Austin.

These metros are all on the coasts, and all have expensive RE.

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1750

From what I have understood of Trumps economic policy, he is worried about the American workers loosing the purchasing power due to not having a job to do, the jobs that could have been theirs but have have been exported out of the USA. The other main point of the trading policy is the unequal application of free market principles. While USA allows foreign product into USA duty free, the products from USA are not given same duty free access in other countries. For example, will a country, like India or China, allow an attorney from USA, who works from home, to use internet to plead a case in Indian or Chinese court?

1751

With globalization, every USA company tries to get cheaper product and sell it locally. Whatever Trump or any one tries to do, companies find a different way to get it done legal route.

Like Nike is just $2-$3 manufacturing site at China, Iphone is appx $250-$270 production cost, but those are selling premium here. Including additional tariff the price is lower, no way the jobs can be brought to USA.

Another part, USA has duty for many goods and that is not implemented strictly except for companies.

At one time, when I declared foreign purchase at port of entry goods above $1600 is taxed, and I paid tax at SFO airport.

1752

This is an overstatement on what companies can do. Corporations are purely run for profits, And these companies are not run by the brave hearts. The same companies, that preach equality and rights, to American citizens and consumers, bend over backwards to appease and comply with dictators in foreign land. For example, Nike, Target, Starbucks have one persona when working with American consumers, and quite another when operating in foreign markets. Same thing with google, Facebook, and social media companies. They demand the protection of American Constitution, but they willfully violate them with impunity. Like I said, how these corporation are under investigation for violation of Anti-Trust laws and principle.

The corporation and the politicians used the words like globalization for two decades to peruse their agenda. But the politics of this country has changed for good. Trump is just a product of that change, not a cause.

I forgot to comment on this statement:

Blockquote
companies find a different way to get it done legal route

American companies are not as smart as you think. They were able to operate globally because of the protection provided by American people through the US government. Without that protection, these businesses will not survive for too long.

1753

Sound like 7x7 and SJ downtown. By Bay Area, you mean 7x7 + peninsula + South Bay and don’t include North/ East/ West Bay right?

1754

Donkeys would be flipping houses, make tons of money trading and enjoying life in general.

1755

Donkeys will be going around in circle blindfolded, under the delusion they are having a good life. Which is good for their masters in SV.

1756

Those high tech manufacturing jobs have never been in USA. They can have the combustion engine production jobs back.

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1757

Yes I meant premium Bay Area locations. LA MV Sunnyvale Saratoga LG MS 7x7 SJD PA, etc.
If you take commute out from the equation there are better or equal places at half the price within an hour like Pleasanton SR Danville Almaden Valley - great schools, new houses, scenic backdrop, cleaner quiet neighborhood.
If you go even further like 3-4 hours drive or 1-2 hours flight then possibilities are endless.
It’s irrational to expect 4x higher price for the same or lower product forever. All gravy trains and unreasonable rise ends in the end.

1758

Entitlement thinking. Read up on economics and feedback systems. The world is made up of feedback systems not directional I/O systems. I am sure that if all the jobs that are outside USA are magically now in USA, demand for American products would drop drastically such that many of those jobs would disappear. Don’t buy into Trump logic - he didn’t or intentionally not understand feedback systems.