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1   SunnyvaleCA   2019 Jun 27, 8:34pm  

Here in the silicon valley area, as long as the companies are hiring and paying big bucks the housing market very near these employees will do fine. While there is housing going up all over the place, housing close to the employers is going to do fine. The housing going up all over the place will, in fact, make the housing in the right locations do even better.

Ugh. I unfortunately haven't been working at my employer's main office (15 minute walk). Instead it's a 5 mile drive. Today a single lane closure on a 3 lane road (in my direction) pushed my commute to an entire hour. And that's to go 5 miles! Having a commute of 15 minutes by foot is worth a lot of money to people making $300k per year.
2   Heraclitusstudent   2019 Jun 27, 10:49pm  

The more I think about it, the more I think the next crisis will be a lesser version of the 2000 bust, coupled with a lesser version of the 2008 bust.

On the tech side, the situation is more complex:
- Many startups have inflated valuations and high expectations but little profits (Uber, Tesla)
- Many older companies have turned to financial engineering buying back tons of shares and ramping up debts. Come a recession, they won't be able to continue buying their shares and their profits will be squeezed by payrolls, commoditization of their products, shrinking sales. (Oracle, IBM, maybe CSCO)
- Many companies are facing devastating commoditization of their products or at least high competition leading to possible price cuts: Apple, Amazon, Microsoft (Cloud), Intel (high competition from AMD).
- Many companies based on selling private information will face far more aggressive regulations, as the government realizes these companies are not serving its needs: Facebook, Google.
- Finally many tech companies will be hurt by the cold war with China.
Most tech companies fall into 1 of these buckets, some more than 1.
All of this will be bad news for tech stocks in general.

On the housing side, too many people take it for granted housing prices can go up much faster than wages. We already see the incapacity of most the next generation to follow, even with very low rates. Once a slowdown takes place, many people will take the money and run, moving to cheaper pastures. A few graphs tell the story:
3   clambo   2019 Jun 28, 5:43am  

I watched him extol the virtues of owning rental property; he said he was himself a renter.

He said he liked everything about rental property investments; but as investments go, real estate is not very liquid; i.e. it takes a while to sell to get your money out.
4   Shaman   2019 Jun 28, 5:49am  

It is likely that real estate has reached another peak. That means that real estate investing is a poor idea, and the only good reason to buy right now is to live there forever. I am not seeing prices fall, but neither are they rising much if any.
5   NuttBoxer   2019 Jun 28, 11:32am  

A house in our neighborhood in Glendale AZ finally sold after sitting for over 5 months. The same day the new people moved in I see the house almost right across the street going up for sale. People are still trying to cash out near the top, but time is running out.
6   mell   2019 Jun 28, 2:15pm  

Agree on the premise. He is right that if you know how to properly screen, select and bid on rentals and know how to be an effective landlord or slumlord it's likely a good investment even for the coming years, because more and more people rent vs buy. However wrt house prices the top is in and I expect a slow and steady decline compared to inflation for years to come, if the economy falters and/or the market crashes then a brutal crash. But economy is looking great, so I expect housing to underperform other assets from a pure appreciation standpoint. Here in the bay area, but more so surrounding areas such as napa/sonoma houses sit on the market for quite a while again and there are frequent, albeit small, price cuts to 'motivate' the buyers. The only reason REITs haven't declined significantly is the continued low interest rate environment.

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