Dr. Housing Bubble 04/03/15

San Francisco tech bubble spills into mega housing bubble: San Francisco median price nears $1 million while homeownership rate falters.

I remember in the 1990s friends getting unsolicited offers for “tech” jobs where the only prerequisite was a basic understanding of computers and some common knowledge of HTML. With these simple skills, you were on your way to tech millions. San Francisco was at the hub of this insane mania. Today people will argue that we now have solid companies like Google, Apple, or Facebook pumping out great jobs for great minds. But I’m also seeing money being thrown at long-shots by venture capital just to see if something sticks. The tech bubble was spurred on by the stock market mania where the public participated. This tech mania is being spurred on by elite private capital. The first housing bubble was accessible to the masses. This housing bubble is available to Wall Street investors, uber-wealthy foreigners, and outlier households with big incomes. The San Francisco median home price now reaches $1 million and the ultimate crap shacks are to found there.

Chasing the tech dragon

The NASDAQ is up a whopping 250+ percent from the lows reached in 2009. Many of the tech money makers are located in Northern California and San Francisco is always seen as a tech magnet. But it is definitely frothy at this point. You are seeing app companies being funded for basically delivering food to your door. Not actually a revolutionary idea. Also, many of the products are dependent on people blowing disposable income. That might be hard when in San Francisco rents and housing payments continue to consume a larger portion of income.

While Los Angeles County is a majority renting county with over 50 percent of households renting, San Francisco is a hardcore renting city with only 36 percent of households owning. We should also take note that in California, housing booms and busts in regular intervals. We are already seeing price appreciation slow down in San Francisco:



http://www.doctorhousingbubble.com/san-francisco-tech-bubble-spills-into-housing-bubble/