patrick.net

Fisk says

What do you count the inflation since 1996, 1% per year?
Even a nominal 3% would give 273 K.
I sure wouldn’t expect a house in San Jose under $100/sq. ft:
you can hardly find that even in the Midwest (major urban areas).

Use this:

http://www.usinflationcalculator.com/

44% since 1996 according to CPI. There are other measures of inflation you can use too, of course.

Some people argue the Bay Area underwent a change in fundamentals due to the dotcom boom. I'm not sure how you prove this. However, it's notable that some houses are now below their inflation-adjusted 2000 price, particularly those in the upper price ranges.

Jobs coming back from China myth is probably put out there by democrat economists paid by white house to project a rosy rosy employment picture in the future (and thus a rosy federal tax revenue picture).

Its BS. Vietnam and other country's will get any jobs that China gives up.

clambo says

House prices rise with wages. Today, prices of houses in many parts of the USA will fall because 1. there are 2 million 90 days behind mortgage payment 2. there are 7 million 30 days behind. ETC.

So, say houses go down another 30% in some locales.
How fast will wages rise to make the prices of houses begin to climb back up?

Without wages rising much, house prices cannot rise very much either.
The good old days are gone. My father’s 15 room house on 3/4 acre in NYC cost him $125/month mortgage way back when. Now he spends that on his cable tv probably.

The problem with the housing price/income ratio does not take into account foreign investment/cash buyers. China is buying left-n-right.
Moreover, in the past 40 years, there has been a great change in the division of wealth. The middle class is slowly disappearing. In Silicon Valley, you now have a heavy concentration of millionaires, even ex-dotcommers are still buying and distorting the housing market.

PockyClipsNow says

Jobs coming back from China myth is probably put out there by democrat economists paid by white house to project a rosy rosy employment picture in the future (and thus a rosy federal tax revenue picture).

Did you even bother reading the article I sent? The prediction was made by Boston Consulting Group in a report they wrote. Furthermore, the article was in the Economist, which is classically liberal (essentially libertarian), and has absolutely nothing to do with the Democratic party -- if anything, they think a lot of the Democratic's party's ideas are bunk.

PockyClipsNow says

Its BS. Vietnam and other country’s will get any jobs that China gives up.

Again, take a gander at the article. It mentions particular supply chain issues that moving somewhere else in Asia doesn't necessarily solve. Not everything is about simply labor costs. You have to look at the holistic picture of a supply chain, and if production in Asia requires you to keep massive amounts of inventory because a disruption could be catastrophic, that needs to go into the calculation.

PockyClipsNow says

Jobs coming back from China myth is probably put out there by democrat economists paid by white house to project a rosy rosy employment picture in the future (and thus a rosy federal tax revenue picture).
Its BS. Vietnam and other country’s will get any jobs that China gives up.

There were cheap labor countries before China modernization, there
are others now, and there will be. But none has or will ever have the scale, which is what allowed PRC manufacturing and imports such an impact here. In that sense, PRC is unique.
Just like US in the 20-th century has made an outstanding impact on word economy and politics by COMBINATION of its political/ economic model and scale. There were democratic market economies (like Dutch) before, but they didn't have the scale. There were other huge countries (like USSR, PRC, or Brazil), but they didn't have the model.

Fisk says

But none has or will ever have the scale, which is what allowed PRC manufacturing and imports such an impact here. In that sense, PRC is unique.
Just like US in the 20-th century has made an outstanding impact on word economy and politics by COMBINATION of its political/ economic model and scale.

That is true. Another thing to note is that China has had a demographic advantage, just like the US where its workers have been in the right age range for high productivity and growth. This advantage is starting to disappear because China is aging like the U.S. The one-child policy is partly to blame too. Again, in the classically liberal (i.e. Libertarian, essentially) Economist:

http://www.economist.com/node/18651512

eastbaydude says

In Silicon Valley, you now have a heavy concentration of millionaires, even ex-dotcommers are still buying and distorting the housing market.

If your sitting with say $10-20M earning a tiny 1-2% $100-200K ,10% will go to State Taxes. If you know of any x-dotcom people you will find many have left CA for NV,CO and FL. Some stayed and moved North to Eureka or South to SLO. They are not the kind to crave attention.

Fisk says

There were cheap labor countries before China modernization, there
are others now, and there will be. But none has or will ever have the scale, which is what allowed PRC manufacturing and imports such an impact here. In that sense, PRC is unique.

Japan, Taiwan and what has been called "Asian Tigers" nations have been doing so for decades. There isnt anything unique about it. Did we in the past see a influx in foreign buyers of SV property. Nada...

thomas.wong1986 says

If your sitting with say $10-20M earning a tiny 1-2% $100-200K ,10% will go to State Taxes. If you know of any x-dotcom people you will find many have left CA for NV,CO and FL. Some stayed and moved North to Eureka or South to SLO. They are not the kind to crave attention.

1) If you are stupid enough to be earning 1-2% on $10-20M, I have a lot of other choice words for you too. If you have that much money and you don't know what to do with it, you should find a flat-fee financial adviser to help you.

2) If you have $10-20M AND you are stupid enough to think that moving outside of California is a worthwhile endeavor merely to save $10,000-20,000 on taxes, then I also have a lot of choice words for you.

Either of those two things signals amateur hour. Couple them together, and wow.

A lot of Silicon Valley dotcom-ers who actually made money (a number far fewer than people commonly think) are still here, trying to create another start-up. That's what most of them do (excluding Google's masseuse or whatever).

corntrollio says

trying to create another start-up.

Few who think they are Einsteins stick around, but not many. Too young and naive, thinking they can do it again.

Sure you can get more than 2% and more risk but they DO have enough not to work rest of their lives.

These folks already did their 20-30 year stunt at SV Tech companies by 1999. I know a couple myself. Today, they live in a different world and mindset than many here. Everthing changes when you have that much and your not bound by location.

California tech billionaire finds Nevada move 'taxing'
Monday, July 17, 2006
By George Anders, The Wall Street Journal

Read more: http://www.post-gazette.com/pg/06198/706480-28.stm#ixzz1QtJXM8cq

thomas.wong1986 says

Sure you can get more than 2% and more risk but they DO have enough not to work rest of their lives.

These folks already did their 20-30 year stunt at SV Tech companies by 1999. I know a couple myself. Today, they live in a different world and mindset than many here.

Are you talking about bona fide retirees? If so, that's different. A retiree may move just to save on cost of living, which may include taxes, although I feel like taxes are the least of your problems in Silicon Valley. That's why you're saying Eureka and SLO too -- much cheaper to live there.

There are all kinds of things you can do with $10-20M that still are low risk and can preserve sufficient capital and hedge against inflation. Again, a financial adviser can help out here. People who have that much money have different financial options than mere mortals like you and I. I'm not even talking about hedge funds. There are simple things like Treasurys, Munis, and AAA corporate bonds that earn more than 1-2%.

Look, I definitely agree that the influence of dotcom-types who won the IPO lottery is lower than people perceive it to be, but suggesting that these people can be encompassed by any one description is similarly difficult to sustain.

thomas.wong1986 says

He spent $50 million on a lakeshore estate and started a Nevada property-development business. What’s more, by taking a big chunk of his wealth to Nevada, Mr. Duffield expected to save millions on taxes.

Have you followed up on this guy since 2006? How'd his property investment business go? I have seen other people like him who were executives in huge tech companies who are getting their properties foreclosed and are filing for bankruptcy too. Lots of them thought they'd invest in property during the real estate boom!

Also, keep reading:

Now Mr. Duffield works in Walnut Creek, Calif. -- within 10 miles of PeopleSoft's old offices -- seeking customers for Workday Inc., a business-software firm with about 60 employees. He is negotiating to build a new home in Alamo, Calif., near his new offices. Incline Village now is just a summer vacation home. "The winters were too cold for us anyway," Mr. Duffield said.

HE MOVED BACK! If you read the tenure of the article, it also sounds like he was playing residency tricks -- e.g. staying in California while pretending his residence was in Nevada. It's not clear he ever really moved to Nevada.