patrick.net

tatupu70 says

Well, the average family could lose $300K on the sale and still come out ahead....

As Shiller in his study points out... crazy home buyers expected 20-50% annual appreciation on their home. I doubt many who still own their home changed their view today.

Trying to slap some marketing term like "pass through" is nothing more than denial and self-delusion. Selling it off as the new normal is nothing more than absolute fruad.

thomas.wong1986 says

crazy home buyers expected 20-50% annual appreciation on their home. I doubt many who still own their home changed their view today.

How does that relate to our discussion? Oh yeah, it doesn't.

thomas.wong1986 says

Trying to slap some marketing term like "pass through" is nothing more than denial and self-delusion. Selling it off as the new normal is nothing more than absolute fruad.

Marketing term? It's a common sense term in my book. I don't live in the Bay Area so I've got no dog in this fight. Just trying to counter your nonsense.

tatupu70 says

thomas.wong1986 says

How do you pass through a foreclosure or a complete loss on your sale of a residence ? Pass through sounds like a ponzi scheme for the next sucker.

Well, the average family could lose $300K on the sale and still come out ahead....

You know what is really funny about all this debate about educatin costs? We are paying through the nose for it one way or the other, and there is really no guarantee that our kid will absorb any of it. We can try to help all we want, but some kids will find their own way, and maybe the perfect SAT score is not in their cards.

no this is the real nonsense...

"A family buying the school premium for the school district will sell for a premium as well."

As if now its set today, prices never go down..ever, will always be higher.

thomas.wong1986 says

You havent looked at the video, or Shillers comments regarding NY and compounding annual increases. Eventually you will have correction.

You think the median Manhattan home price will "correct" to $407,000 inflation adjusted dollars?

Prediction of the year.

Goran_K says

You think the median Manhattan home price will "correct" to $407,000 inflation adjusted dollars?
Prediction of the year.

"I" dont track NYC, im in CA.. as such, CA will fall back to long term mean prices as it has before. I expect even NYC to fall in line.. business which operates and employees in NYC will look elsewhere to maintain cost structure. Business dont operate in a vacuum and they do react to higher prices.

thomas.wong1986 says

Nice try Thomas, Apple stock is at $500, what's Dell stock at? The googlers I know are panicking about the facebook IPO and trying to buy now
As we have found out.. Apple did not hand out stock to employees.. You forget Steve Jobs hates money and dislikes the notion how people behavior changes. A leasson learned from the 80s.
page 15..."The Company did not grant any stock options during the three months ended December 31, 2011 and December 25, 2010"

Apple granted 6.7M shares of RSU's for FYE sep2011, 14.5M overall balance. At $500 a pop, that is 3.35B and $7.2B overall in the pipeline based on current price. This is for a well established company where 10's of Billions have already been banked. Apple employees banked at least 2B last year and likely around 3B this year.

Apple will grant another 5M shares this year and the pipeline will continue. The instance they don't hand out more stock awards, key Apple employees will defect to Dell, Amazon, Nokia, Motorola Mobile, Samsung, Microsoft and Google in Silicon Valley. All their major competitors from out-of-state and out of country are in their backyard.

Apple handed out by far the most $$ via stock awards in absolute $$ than any company ever!

Thomas, at least you stick to your guns.

When Manhattan apartments drop to $407,000, I'll be purchasing one. That's for sure.

Goran_K says

Thomas, at least you stick to your guns.

When Manhattan apartments drop to $407,000, I'll be purchasing one. That's for sure.

It will only drop when everyone changes their mind about the value (including you). Why anyone wants to live in Manhattan and suffer through winters is beyond me. To overpay for a place to have that privileged is just plain stupid.

All the asians and indians are driven by API scores and driving the prices up in Cupertino and Mission San Jose.

RentingForHalfTheCost says

It will only drop when everyone changes their mind about the value (including you). Why anyone wants to live in Manhattan and suffer through winters is beyond me. To overpay for a place to have that privileged is just plain stupid.

High paying jobs? Lots of culture? Things to do? I can see many positives to living in Manhattan.

Regardless, Manhattan median prices haven't tracked with inflation since 1930 at least, so if people have been waiting for that to happen, well... they are probably dead.

Goran_K says

High paying jobs? Lots of culture? Things to do? I can see many positives to living in Manhattan.

Jobs I agree. Culture has positive and negatives. Things to do? Not much more than the BA or any Metro area. I'd rather be closer to Hawaii than Bermuda. At least they let you rent cars in Hawaii. Bermuda is cool, but knowing you can never lives there (unless you can buy your way in) kinda sucks.

SFace says

Apple handed out by far the most $$ via stock awards in absolute $$ than any company ever!

RSU are incentives to officers as part of compensation to acheive for long term growth.. your talking years down the road. These people already have their homes. We are talking about your average joe that goes to work at Apple. The best they can do is buy up to $25K each with the stock purchase plan at 85% of price.

Its laughable that you believe 1000's shares are just doled out to every employee who works at Apple or any public company.
A typical reward for working in a well known company like Apple today, is a job.

If you dont like to work at Apple, im sure there are plenty others who would. If your here (SV) for the stock options in order to get rich, and you have no interest in doing the work.. and then there no point hiring such people.

Your mind has been warped from the stock bubble of the late 90s. You wrongly beleive that was the norm for decades past.

thomas.wong1986 says

RSU are incentives to officers as part of compensation to acheive for long term growth.. your talking years down the road.

thomas, I work in the trenches in engineering. I ain't no officer, that's for sure. My partner works in the trenches in finance, not in a glamorous job but in nuts and bolts daily grind kind of job. Someone like you probably would be my partner's boss.

My partner and I both have got RSU's from time to time. We ain't no officers.

That said, for us non officer kinda folks, at best the RSUs are more like something to get new furniture with, or add to the annual IRA contribution, or (for some, not for us) maybe a DOWNPAYMENT on a car. Just as often, it's less than that.

I dunno why you argue with SFAce. A person who is self-identifying themself with the American Express Black says all you need to know about the values of the person. You wanna dignify that with aruging?

thomas.wong1986 says

Its laughable that you believe 1000's shares are just doled out to every employee who works at Apple or any public company.

A typical reward for working in a well known company like Apple today, is a job.

I have no experience with Apple specifically, although I'd expect them to be competitive with other large tech companies with 4-year compensation packages including $250-$300K worth (at grant time) of RSUs (where share prices can double or triple as they vest) to engineers with over a decade of solid experience.

While not every employee gets that sort of package it's probably enough to distort home prices.

drew_eckhardt says

I have no experience with Apple specifically, although I'd expect them to be competitive with other large tech companies with 4-year compensation packages including $250-$300K worth (at grant time) of RSUs (where share prices can double or triple as they vest) to engineers with over a decade of solid experience.

$250,000-300,000 Unless your a VP is just Laugable!

All of my friends in the Bay Area are high level engineers. None were issued hundred thousand dollar RSUs, some were able to obtain up to those levels with STOCK OPTIONS during the boom years. RSUs tended to be smaller in amounts as in fractions of annual salary.

Maybe Apple is unique, the only guy I know who works at apple is in management and he's rolling in it...but he's been with the company since before Jobsus took over the second time.

thomas.wong1986 says

no this is the real nonsense...

"A family buying the school premium for the school district will sell for a premium as well."

As if now its set today, prices never go down..ever, will always be higher.

This is actually a keen observation; everyone seems to assume that these good school districts are somehow statically good - as though thy weren't being progressively chipped away at every year by layoffs and budget cuts and the higher cost of living in the tony areas surrounding the school - which I can only assume would gradually undermine the morale of the teachers actually providing the education. Public schools get the shit end and I cannot see any reversal of this trend in the cards. At least with a private school education, you are ensuring a baseline of QC to some degree because you are actually PAYING the staff a decent wage that keeps better pace with COL.

I'd bet these schools that everyone pays a premium for are, to a large extent, enjoying the ratings they receive on account of ambitious knuckle thwacking parents who pay for after school tutelage and spend every other hour grinding their kids down with "If you keep on doing ________ you'll never get into a good school. You'll never work for Goldman Sachs!"

SFace says

I find TW's statement's to be unbearable.

Your living in a dream land... your making some crazy claims that typical employee is being minted as millionairs every quarter.

Tell me your the Stock Admin working at Apple and have insider information I might just believe you.... else your just another dot.com cheerleader.

JodyChunder says

"If you keep on doing ________ you'll never get into a good school. You'll never work for Goldman Sachs!"

Pressure at such a young age.. leads to consequences...

JodyChunder says

At least with a private school education, you are ensuring a baseline of QC to some degree because you are actually PAYING the staff a decent wage that keeps better pace with COL.

At the very least the publicly disclosed private school costs (on their websites) can be used to some fashion to gauge what that 'price of an education is'. At that point you can shop anywhere in the valley for a home.

thomas.wong1986 says

Your living in a dream land... your making some crazy claims that typical employee is being minted as millionairs every quarter.

Tell me your the Stock Admin working at Apple and have insider information I might just believe you.... else your just another dot.com cheerleader.

Again this is not the court of Thomas Wong, get over it.

I never made any such claims anyway other than a lot of people earned a lot of stock awards @ Apple and lots of money are cashed out and many more on the way, perhaps the most lucrative ever. It was the claimed controller who cited that Steve Jobs didn't give stock awards and cited none was given, obvious BS.

B.A.C.A.H. says

That said, for us non officer kinda folks, at best the RSUs are more like something to get new furniture with, or add to the annual IRA contribution, or (for some, not for us) maybe a DOWNPAYMENT on a car. Just as often, it's less than that.

based on SFace world view... must be that fancy $25,000 Italian furniture or maybe $100K new BMW M5 class or maybe $50,000 deposit on your childs future Stanford U. education fees.

Yea... we are fucking Millionaires... taking baths in french Champagne.

SFace says

It was the claimed controller who cited that Steve Jobs didn't give stock awards and cited none was given, obvious BS.

60 minutes the same week he died.. in his own voice. You may find it stated in his biograghy as well.

He disliked what he saw back in the early years how people became greedy and childish.. buying expensive toys and getting plastic surgery... and that was back when they had their IPO.
That was not his idea what he wanted for Apple culture.

http://www.youtube.com/embed/Tdo_05d9rf8

thomas.wong1986 says

Yea... we are fucking Millionaires... taking baths in french Champagne.

Took a bath in tomato juice once. It actually did feel sorta decadent.

thomas.wong1986 says

Pressure at such a young age.. leads to consequences...

Debauchery is the word!

JodyChunder says

I'd bet these schools that everyone pays a premium for are, to a large extent, enjoying the ratings they receive on account of ambitious knuckle thwacking parents who pay for after school tutelage and spend every other hour grinding their kids down with "If you keep on doing ________ you'll never get into a good school. You'll never...

It's not to a large extend. It is to the only extent.

All that pressure to be a high performer can sometimes lead to unintended consequences.

(I deleted the links to the articles about specific suicides here because it was a little bit too personal, with names, etc.)

thomas.wong1986 says

60 minutes the same week he died.. in his own voice. You may find it stated in his biograghy as well.

He disliked what he saw back in the early years how people became greedy and childish.. buying expensive toys and getting plastic surgery... and that was back when they had their IPO.

I tell my wife I work out at the gym, every night, pushing hard.

But when I come back home a fatter ass after a reasonable amount of time, results speak louder than words.

I don't care what Steve jobs thinks or what was reported, the result is Apple handed out more stock awards in absolute $$ value than any company in this world. That is the bottom line.

A couple of my colleagues have gone to Apple over the last couple of years. Apple most certainly does grant stock awards and allow option sales. Both are based as a percentage of salary, and some are awarded as a signing incentive. The amounts are none of my business and I have not asked for specifics, but they have described them as, "generous." These are hardware engineers with 3-4 years of experience. Their base salaries are in the $115k neighborhood, and there are cash bonuses on top of that. The bonuses and RSUs ate performance-dependent.

So, there are not millionaires being minted daily, but folks like that could save and qualify for a jumbo loan pretty easily. If it is a DINK couple with 2x that income, it is even easier.

My $0.02.

thomas.wong1986 says

drew_eckhardt says

I have no experience with Apple specifically, although I'd expect them to be competitive with other large tech companies with 4-year compensation packages including $250-$300K worth (at grant time) of RSUs (where share prices can double or triple as they vest) to engineers with over a
decade of solid experience.

$250,000-300,000 Unless your a VP is just Laugable!

I know people got 200k rsu from google as sign-on last year as level 5 position. Suddenly, wages in some have caught up big time with inflation here. Think 120k-130k base used to be the norm for non-managerial mid career, now 150k seems to pale compared to last year offers. Again, that is biased to my sample size.

bmwman91 says

A couple of my colleagues have gone to Apple over the last couple of years. Apple most certainly does grant stock awards and allow option sales. Both are based as a percentage of salary, and some are awarded as a signing incentive. The amounts are none of my business and I have not asked for specifics, but they have described them as, "generous." These are hardware engineers with 3-4 years of experience. Their base salaries are in the $115k neighborhood, and there are cash bonuses on top of that. The bonuses and RSUs ate performance-dependent.

So, there are not millionaires being minted daily, but folks like that could save and qualify for a jumbo loan pretty easily. If it is a DINK couple with 2x that income, it is even easier.

My $0.02.

These numbers are similar to what I have heard as well. Salaries have gone up recently at several companies to around the 125-130K level for starting senior engineers which are just out of school PhDs or Masters + 4 yrs of experience. At this level, RSU/options tend to be around an average of 30K per year apart from bonus which also tends to be around that number. So someone around early 30s in places like goog,aapl,intc etc should be able to pull in close to 200K gross. So DINK with two engineers should cross 300K easily at the housing buying age of early 30s.

This salary increase is probably also why the rents in the apartment complexes are now 2500 for 2BR on average.

thomas.wong1986 says

$250,000-300,000 Unless your a VP is just Laugable!

One step below principal engineer in title. Where you might get to after 10-15 years in industry doing significant things without moving into management or taking a non technical job that doesn't pay nearly as well because you've burned out or won the startup lottery and decided something like acting might be more fun.

Many technically qualified people also feel that's not enough to compensate for employment at the big companies that make such grants.

drew_eckhardt says

Many technically qualified people also feel that's not enough to compensate for employment at the big companies that make such grants.

Yup. At some point, people realize that they need to stop trading every moment of life for money & career experience and leave some time for living. A couple of my friends at Apple basically say this, "Well, I just want to survive here for ~2 years without totally burning out. With that on my resumee, I can get a job anywhere I want after that." They are learning world-class engineering skills there for sure, but trips to China every 3-4 weeks & being on-call on weekends gets old fast. One of my friends has it figured out though, and she works 9-5, few weekends & rarely goes to China now (EE HW designer).

SFace says

But when I come back home a fatter ass after a reasonable amount of time, results speak louder than words.

Uh just so you know dude, women like men to have chubby asses

B.A.C.A.H. says

That said, for us non officer kinda folks, at best the RSUs are more like something to get new furniture with, or add to the annual IRA contribution, or (for some, not for us) maybe a DOWNPAYMENT on a car. Just as often, it's less than that.

These comments are more consistent with my 16 year career in technology. My wife is an engineer with a PhD and so I also got to see what her signing bonus and compensation was like when she got a job with one of the sexiest companies in the Bay Area.

The idea that RSUs or ISOs worth hundreds of thousands of dollars are regularly given is mistaken. This is more on the order of what happens during IPOs. Remember that RSUs and ISO are priced according to the market price at the time they are granted. So this type of compensation is at the mercy of the market. This also means that for a company like Apple or Netflix, employees have done very well in some cases. Others, not so well. Look at how much Apple and Google stock have gone up and down the last eight years.

This might explain it. Apple is now bigger than the city of Chicago and the same size as Switzerland
http://www.cnbc.com/id/46606766

FunTime says

The idea that RSUs or ISOs worth hundreds of thousands of dollars are regularly given is mistaken.

Yep.

I work in the trenches, so does my partner. Over the years, year after year (though not every single year) our employers have granted NQ, ISO, RSU. Public companies, private ("pre-IPO" for the Hipsters), big companies, small companies, middle sized companies. Companies on their way up, and also on their way down.

Sounds like you know, and like I know, and like another person (thomaswong86) who (claims to have) actually worked in such organizations knows.

Yep, working on the technology teams inventing, refining, manufacturing the stuff, or in my partners' case, doing the bean counting.

SFAce may be a cheerleader, and may be making Big Talk about the streets of Santa Clara County being paved with RSU/ISO/NQ gold, but those of us who work in the trenches know what is true.

But his cheerleading makes "fun reading", doesn't it?

thomas.wong1986 says

He disliked what he saw back in the early years how people became greedy and childish.. buying expensive toys and getting plastic surgery...

Uh, one of the first things Jobs did was lie to Woz about how much money they made on Breakout, and buying himself a sportscar. Then abandoning his girlfriend and their baby.

Yep. Jobs wasn't the saint some people portrayed him to be.