Sometimes, I’m at an absolute loss as to the reason (besides a paycheck) why somebody would write an article about which they know nothing about and contributes nothing.
Here’s a prime example from Business Insider:
The article refers to some real estate search datasets from Redfin. The author makes a huge stretch of the imagination and suggests that home seekers must be searching outside the Silicon Valley as homes here are no longer affordable. Though she was born in Southern California, she’s now a New Yorker and clearly betrays her provincialism with her outsider’s perspective of real estate and the Silicon Valley. She even uses a photo of San Francisco and proceeds to use Bay Area and Silicon Valley interchangeably.
As with my prior post about the same silly conclusion from the CAR president, I need to re-iterate the reality that high real estate prices are not causing young home buyers to search outside the area. The causal relationship is reversed. The strong desire of young home buyers for awesome Bay Area living near top employers is driving up the local real estate prices.
When the Redfin datasets show that more home seekers are looking outside the Silicon Valley, the reasons are patently obvious to anybody who is active in Silicon Valley real estate. Searches for Sacramento are up as investors who are priced out of the Bay Area look for the next best alternative. Interest in Seattle is increasing with Amazon and Microsoft poaching Silicon Valley’s unmatched tech talent.
At the same time, Southern California (SoCal) searches are down, debunking the article’s thesis. Anybody who lives in Northern California (NorCal) and has seen the once thick snowpacks on the mountains go bare can easily understand why that’s the case. And with the infamous SoCal/LA traffic, there really shouldn’t be any surprise.
As for minor uptick in searches in other areas, the reason is even simpler–Redfin has recently expanded the number of cities it covers outside the Bay Area.
While there’s some validity to her suggestion that software engineer salaries aren’t keeping pace with price appreciations in the Silicon Valley, the reality is that local buyers don’t entirely depend on their salary to save up for their down payments. Huge numbers of software engineers have cashed out significant sums from stock options and awards, which have been rapidly increasing and driving up the local home prices.
To be successful in the San Jose Bay Area and Silicon Valley real estate, buyers need to be armed with sophisticated advice from seasoned professionals. Drivel off the internet needs to be read with caution.