November 18, 2008
Once Again, It's Just Getting Starting (And It's Going To Last Longer)
"From a Bay Area view, the global slowdown threatens tech exports and tourism, which have so far cushioned San Francisco and the Silicon Valley from the housing bust that has already clobbered the East Bay..."
∙ Economists say recession is here, and will last [SFGate]
∙ The Google Chart Of The Day (And A Bit More Foreshadowing) [SocketSite]
∙ From Underwater To Unemployed (And Sorry, But It’s Just Starting) [SocketSite]
∙ And Speaking Of Being Plugged-In To Bay Area Employment Trends… [SocketSite]
First Published: November 18, 2008 6:45 AM
Comments from "Plugged In" Readers
I read on Reuters (yesterday) that the unemployment rate could go up to 7.5% by the end of '09, and 10% if one of the auto makers goes down in flames. The article was based on a survey of 50 economic forecasters.
It will be interesting to see how the Bay Area fares in comparison to the rest of the nation.
Posted by: Binnings Team at November 18, 2008 7:03 AM
sheesh, so much for the usefulness of my comment. Looks like they're talking about the same damn article!
Posted by: Binnings Team at November 18, 2008 7:09 AM
Add me to the growing list of tech layoffs in the bay area. My company has let go something like 7% of 150 employees in San Francisco. Let the games begin!
here is the thing that folks need to keep in mind: I'm seeing jobs out there and I suspect I can get something quick. However, my salary is going to go down. I'm sure that is the common experience for tech folks. Only a fool will believe that housing in SF won't take a major hit if this trend continues.
Posted by: BRCGranny at November 18, 2008 8:55 AM
Recovery in 'Mid-2009' is only about six months from now.
[Editor's Note: We should have been clearer in our headline. While 'Mid-2009' is six months away, we'd be willing to wager that a recovery is not.]
Posted by: anon at November 18, 2008 9:04 AM
It's usually a new sector that leads the market and economy out of a downturn. Becuase of the Bay Area's dynamic people and economy, that new sector has its genisis many times right here.
Posted by: Paul Hwang at November 18, 2008 9:28 AM
once again, stating the ecomomic obvious...
Posted by: Auden at November 18, 2008 9:47 AM
Nothing to worry about, folks. Because even if there's a crash in tech, real estate will become the next hot sector. With today's low rates and easy financing terms, everyone can make money in real estate.
Oh...wait...we just tried that one.
Um...what about green tech/clean tech?
"Please God, just one more bubble."
Posted by: Dude at November 18, 2008 9:49 AM
Tech companies big and small are all taking Sequoia Capital's lead and firing 10% of their workforces. Great excuse to slim down.
It will have an impact over the next twelve months. But it won't be a big one, and it won't last.
Remember that America's strength isn't in its armies or economy, it's ingenuity. And not since Athens has so much of the world's ingenuity been concentrated in one place.
SF will be fine.
Posted by: NewBuyer at November 18, 2008 9:51 AM
Posted by: Jake at November 18, 2008 9:58 AM
I don't suppose anyone that has posted above has been around SiliValley long enough to remember '90-92.
Things in tech can get a lot worse than you think.
Posted by: wanker at November 18, 2008 10:37 AM
@wanker, agreed and many properties (condos, et al) got hammered. I remember Palo Alto holding up well (in nominal terms) and I trust the best parts of SF did too. Does anyone have any fine-grained data from '89 to '95?
Posted by: steve at November 18, 2008 11:48 AM
@ steve: I wasn't here at the time, but I've read that San Francisco home prices fell roughly 15 to 20% during that time frame, depending on neighborhood.
These are averages, not medians, for SFRs. I haven't seen Palo Alto info, but I'm sure it's out there.
Posted by: Dude at November 18, 2008 12:07 PM
Rich people will be unaffected by this economic decline. If they are materially affected, to the point where they have to sell their house at a loss, it is because they are no longer rich.
Simple logic, huh?
Just like "real SF" -- anyplace where transaction prices decline is automatically excluded from "real SF."
Just repeat this to yourself over and over: prices in real SF only go up, and Rich people will never lose money on real estate.
Posted by: Jimmy (Bitter Renter) at November 18, 2008 12:55 PM
The new bubble will be math-based, and My algebraic skills will lead you to prosperity
Posted by: 4 yr old math genius at November 18, 2008 12:58 PM
Here's a cautionary tale on the intersection of those two most holy of holies in the Bay Area pantheon, tech and real estate:
“Jing Hua Wu, the engineer who police say fatally shot three executives at a Santa Clara startup company last week just hours after being fired, spent the last few years amassing a large portfolio of investment properties. Records show that Wu and his wife went on a property-buying spree starting in 2004. From June to October 2005, they bought two rental homes and five vacant lots for $526,000 in Hot Springs Village.”
“The couple also bought at least five homes and six lots in Washington north of Portland, in the communities of Anderson Island, Vancouver and Ocean Shores. In California, they bought a modest home in Elk Grove and a bare lot near Lake Shastina in Siskiyou County.”
Posted by: Laughing Millionaire Renter in Marin at November 19, 2008 9:58 AM