Tech bubble not about to burst (sales, real estate, renting)

[HappyinCali]

For what it is worth. the #1 reason why tech bubble would burst would be lack of VC funding. However, the VCs are sitting on piles of cash. Any downward revisions in valuations would cause the VCs to step in

https://www.bloomberg.com/news/artic...w-to-deploy-it

[HockeyMac18]

Originally Posted by HappyinCali

For what it is worth. the #1 reason why tech bubble would burst would be lack of VC funding. However, the VCs are sitting on piles of cash. Any downward revisions in valuations would cause the VCs to step in

https://www.bloomberg.com/news/artic...w-to-deploy-it

Yeah I don't see a bursting of the bubble. Maybe a slowdown, or a slight reduction, as investors become more and more conservative with their money. But not a bursting of anything. Nothing catastrophic.

The fact that many people don't want to admit is that many of these companies here now are mature and stable. Sure, there are some start ups and companies with questionable (or even non-existent) revenue streams and business plans that likely won't make it in the long run, but tech on the whole is here to stay.

2000 and 2017 aren't as similar as most think they are.

[cardinal2007]

People have been talking about a "tech bubble bursting" since at least 2012:
How long till the next Tech Bubble busts in SF??
3 years ago people here called tech bursting:
Thank goodness the tech bubble is starting to pop.

and once again last year:
Tech bubble burst on the horizon?

In truth we haven't been in a bubble for 5 years. Looking at stocks, they do look overvalued by P/E ratios, so I could believe a correction coming this year, and even a recession, we have had about 7 years of economic expansion. It would be great if it kept going, but I don't think we will continue expanding. But clearly all these posters from before are way off base, there is no way we could have a bubble running for 5 years after like that, even the housing bubble was short lived in comparison to that.

[Chuck5000]

didn't read the article, but there are many, many smaller companies that are not stable. This will lead to noticeable job losses, slowly, as these commpanies fail to deliver over the next 3 to 5 years, and is what will be the bubble "deflation."

However, it won't be dramatic, IMO, and won't change real estate pricing much, maybe 10 to 15%. (meanwhile, you'd save that much by buying now instead of renting for the next 3 years waiting for that dream bubble burst).

The reason why VC funding is less relevant than it used to be is overseas "VC" investors, sovereign wealth funds, etc, getting into tech investing. Won't last forever.

[Bluedoor]

Maybe it's just me, but real estate dropping by 15% from now is a LOT, especially as rent's not going to rise (though interest rates will).

Tech's going to stay, but it's not going to keep growing and that makes a difference here where all the undesirable traits (traffic, pollution, housing shortage) are not necessarily because of the existing population, but because of people keep moving in.

[NewbieHere]

That's the nature of small companies, they are not stable. People want to spread false rumor, hoping for a housing crash so they can buy. Guess what? When that happens, they will also lose their jobs.

[Bluedoor]

Yes, but number of small companies overall can change. It's a dynamic economy and if large companies do not grow for a while (and large companies like Facebook, Apple etc are already having problems growing, having hit their maximum size under current strategy) and not many small companies replace the ones that fail, then people are going to stop moving in for "jobs". Furthermore, those waves of fresh grads and those who do not like Bay Area will move out.

There's not going to be a housing "crash" per se barring some unpredicted catastrophic event, but it's going to fall. Bay Area is not exclusively made of tech. Biotech, manufacturing tech people, not to mention all the other non-tech people which tend to represent a more stable population with fewer cashout chances and lower compensation overall- they are not going to prop up the insane prices and compensation and they will be much less affected by tech crash while welcoming housing crash.

[HockeyMac18]

I guess it's a debate of semantics at this point. I expect a downturn, but not a crash (catastrophic). Maybe a 10-15% drop, which might work its way through the housing market a few years later...but, we're not going back to 2008-2011 anytime soon.

[WithDisp]

While I don't see it happening, one major company woo'ed to a cheaper state with less / no taxes could make a pretty ugly dent on the region.

It would also be of best benefit for the employer, and their staff.

I cannot fathom why businesses continues to cluster in an age where that is absolutely unnecessary.

[Chuck5000]

the reason for clustering is primarily social. Planned and unplanned meetings happen, serendipity, accident...has led to many an idea or partnership.

We are seeing tech companies starting to build sales and support and other ops staffs outside of CA - but not always, and the core business teams tend to be here. They want to be around each other. Plus, they're well paid, and can afford it here.

Originally Posted by WithDisp

While I don't see it happening, one major company woo'ed to a cheaper state with less / no taxes could make a pretty ugly dent on the region.

It would also be of best benefit for the employer, and their staff.

I cannot fathom why businesses continues to cluster in an age where that is absolutely unnecessary.