The mechanism of a crash was subprime mortgages. This time it is an affordability issue. Back in 2002 median mortgage was less than 400K. Today many carry 1M or more mortgage. A Qualcom employee last week complained to me his option is a wash and he has none to exercise for downpayment. The overvaluation on stocks can take a turn making many company stocks worth a lot less. When that happens (deja vu) down payment source will be greatly impacted.
Maybe he is looking for sellers…Being a buyers agent is a nightmare…Have to make 30 offers to get one deal, fugetaboutit…Much easier to find a seller in a weak moment…I get letters all the to time from realtors who have buyers for my apartment building…Not one 5+ multifamily listed for sale in South Lake Tahoe…
Qualcomm is San Diego company and its SC/SJ campus is not big.
Besides, the company has been struggling since 2015.
You should look at how FANG engineers feel about affordability to gauge SV market.
What percent of BA population are engineers at FANG companies? That’s not enough people to prop up the entire real estate market.
It worries me thst people can use RSU income to qualify. It’s the lessening of lending standards that leads to trouble. If it takes dual income with RSU income, then there’s no margin for error. They can’t withstand a stock market drop, illness, jobless, etc. Even changing employers and having to wait to start vesting again could be bad. The margin of safety is razor thin.
Everyone here talks about how quickly engineers peak in comp then burnout. What do people think will happen when couples hit that point, and their mortgage requires FANG income and RSU vesting to keep up with the bills? People are signing up for a 30 year mortgage based on peak income. The assumption is there will always be someone following willing to pay more for the home.