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One of the key characteristics of a bubble is that is almost impossible to tell you're in a bubble until afterwards. Afterwards, you see the carnage, and you say to yourself, "yep, that was a bubble."
My favorite bumper sticker from 2000 & the dot-com crash:
In 2005 I sold several properties and did well... not nearly as well if I had waited and sold in 2007.
In real number for one Bay Area single family rental home in Oakland
50k purchase price with repair costs in 1985
255k selling price net in 2005
350k selling price of my buyer that resold in 2007 (Almost no work done... not even paint)
I'm going to stop you there, because it really doesn't apply to everyone equally.
Property taxes on residential properties have kept pace with the times. They turn over regularly enough that the cities can depend on a certain amount of revenue growth every year. However, you have to consider the commercial side of Prop 13 as well. The corporations that own commercial real estate also benefit from the stabilization in property tax. And when they change hands, they do a kind of corporate accounting voodoo that allows the property to be sold as if to a family member, without triggering a reassessment.
The result is that while cities have been able to enjoy growth in residential property tax income, the growth in commercial property tax revenue has been extremely slow. This is a lot of money we're talking about; it drags on the whole state.
Prop 13 does not differentiate between commercial and residential property....
There have been some very high profile cases with millions in taxes due because it was later determined a transfer occurred involving San Francisco commercial property.
The basic premise is still the same... reassessment at time of transfer.
sportyandmisty has posted over 25 times about Harker. I haven't been here long, but I already recognize this. When one pays 30K a year for primary school tuition, one must really feel they are getting their money's worth, or they will lay awake at night realizing they were shafted.
people go to Ivy schools from poor neighborhoods in the midwest. It is not a function of how much mom and dad spent on kindergarten.
sportyandmisty said:
"Then, when my daughter was a freshman in college, I would ask her suite-mates what they wanted to do after college. These bright Ivy League women looked at me as if I were speaking another language. "Do? What do I want to do after college? Why, I'm going to marry an investment banker and we'll live in Connecticut." The role models for these bright women were their own mothers and the mothers of their friends - almost all of whom were wives of investment bankers, and they shopped & went to Pilates class & took tennis lessons & volunteered one way or another."
so what this poster is saying is that after spending a small fortune for Harker, the girl realized all she had to do was marry rich, not make anything of herself. Is this the moral of the story, or am I missing something?
Now, there is absolutely nothing wrong with staying home and taking care of kids, then they can go to public school, they won't need after school care, and they won't need 7am-6pm Harker school. So if you send the first generation thru Harker, they will realize what a PITA working really is, so they will marry really rich instead of just marrying smart, so the next generation will not need Harker because Mom will be at home. Or not. The nanny will be at home while Mom is at Pilates.
so what this poster is saying is that after spending a small fortune for Harker, the girl realized all she had to do was marry rich, not make anything of herself. Is this the moral of the story, or am I missing something?
Since the poster has never said anything like that I would suggest re-reading the post one more time.
From a practical standpoint, consider private school.
We were firm believers in the public school system, and our house was in good school areas (Regnart Elementary, Kennedy Middle School, Monta Vista High School). We started our daughter out at Regnart, only to find it was very much one-size-fits-nobody. The logistics of before- and after- school care didn't work for us, as both my wife & I worked.
We switched to Harker School. This isn't everyone's cup of tea, of course; it was quite rigorous (the year my daughter graduated from high school Harker sent just over 12% of its graduating seniors to MIT), and also quite expensive. However, the before- and after- school programs were outstanding, as was personal attention from the faculty. Our daughter went on to an Ivy League school (her 1st choice).
At the end of the day, by virtue of where we live, we determine the schools to which we send our kids, which in turn determines the universe from which our children will select their friends and peers. This has a big impact on who they turn out to be. I would ask my daughter's friends "what do you want to be when you grow up" and they would reply things like "doctor, engineer, scientist, inventor, I want to start a business" etc. Their role models were their own mothers and the mothers of their friends in Silicon Valley, almost all of whom were professionals & worked in the business world.
Then, when my daughter was a freshman in college, I would ask her suite-mates what they wanted to do after college. These bright Ivy League women looked at me as if I were speaking another language. "Do? What do I want to do after college? Why, I'm going to marry an investment banker and we'll live in Connecticut." The role models for these bright women were their own mothers and the mothers of their friends - almost all of whom were wives of investment bankers, and they shopped & went to Pilates class & took tennis lessons & volunteered one way or another.
So -- consider private school.
I've seen you make this argument before but this is the first time that it's coherent.
Unfortunately, my personal experience contradicts it. When I grew up, I lived in an area very similar to the Silicon Valley with similar wealth, similar schools, similar kids and similar expectations by both parents and kids. My high school is still one of best rated high schools in California, even higher rated than Cupertino. All the parents and kids talked about how the kids were going to do great things, have great careers, have great lives, be important and change the world. I even had that. But what happened?
I look at my high school classmates now and very few ended up there. Lots moved and live in the Midwest and other cheap areas of the country. Few have professional careers but lots are just happy to get by. Very few ended up in the same profession as their parents. How did they end up like this?
Some were weeded out in the five years of college and some were weeded out in the first five years after college. So, I guess that the first 10 years after high school were really the test. Even with all the advantages, there's just no guarantee. Sadly, all the advantages aren't as much of an advantage as we thought.
It's easy to say, "I'm going to be a doctor", or "I'm going to be President of the United States." It's a whole different story to do it. It's easy to be on that track as a college freshman; far fewer are on that track by the end of college. Then, you are dumped into the real world. Bad luck happens, like graduating in a down economy or getting pregnant or meeting the wrong person or taking the wrong job or majoring in the wrong thing. It's not like stepping onto an escalator and waiting to ascend to the elite and wealthy and self-actualized echelon of our society.
There's this image that, if your kid goes to high school with the next Mark Zuckerberg, that he can always call up Mark and get in on the ground floor of a great enterprise, get funding for his big idea, get a VP job with tons of stock options or have a contact into the world of the rich and famous. But, between high school and 10 years after high school, that becomes an unlikely possibility. High school graduation is like a grenade going off: a million pieces go in a million different directions. Your kid and Mark 2.0 aren't part of an army unit that gets "A"s in high school, then marches off to MIT as a group, then starts Facebook 2.0 as a group, then conquers the world as a group. Your kid ends up here and Mark 2.0 ends up over there and, most of the time, everybody ends up on completely different paths. And, after 10 years, high school feels like a very, very long time ago. People and circumstances change; dreams get dashed. Some people don't want to do the work. Some want to insist on their own way and the world disagrees.
Where will today's Harker graduates be in 20 years? If I had to bet, I bet that they won't be living in the Silicon Valley and won't be among the nation's wealthy or elite. There's just too much that can go wrong and, for most of them, it will go wrong. Childhood fantasies with give way to adult realities.
I was looking at some houses online, and there are some houses which were sold in 2011 for $350k and now they are listed at $700k... is this sustainable? or is this the peak? or this is a bubble?
I know no one can predict this, but I am just asking for your opinion?
No. In the core parts of the Bay Area, the real estate market didn't crash in the aftermath of 2008. Yes, prices went down some, but it was hardly a crash. So unless we have something worse than 2008, there will be no crash. We do not build enough housing here, which results in chronic undersupply, and that means home prices and rents stay in the stratosphere.
I've seen you make this argument before but this is the first time that it's coherent.
Unfortunately, my personal experience contradicts it. When I grew up, I lived in an area very similar to the Silicon Valley with similar wealth, similar schools, similar kids and similar expectations by both parents and kids. My high school is still one of best rated high schools in California, even higher rated than Cupertino. All the parents and kids talked about how the kids were going to do great things, have great careers, have great lives, be important and change the world. I even had that. But what happened?
I look at my high school classmates now and very few ended up there. Lots moved and live in the Midwest and other cheap areas of the country. Few have professional careers but lots are just happy to get by. Very few ended up in the same profession as their parents. How did they end up like this?
Some were weeded out in the five years of college and some were weeded out in the first five years after college. So, I guess that the first 10 years after high school were really the test. Even with all the advantages, there's just no guarantee. Sadly, all the advantages aren't as much of an advantage as we thought.
It's easy to say, "I'm going to be a doctor", or "I'm going to be President of the United States." It's a whole different story to do it. It's easy to be on that track as a college freshman; far fewer are on that track by the end of college. Then, you are dumped into the real world. Bad luck happens, like graduating in a down economy or getting pregnant or meeting the wrong person or taking the wrong job or majoring in the wrong thing. It's not like stepping onto an escalator and waiting to ascend to the elite and wealthy and self-actualized echelon of our society.
There's this image that, if your kid goes to high school with the next Mark Zuckerberg, that he can always call up Mark and get in on the ground floor of a great enterprise, get funding for his big idea, get a VP job with tons of stock options or have a contact into the world of the rich and famous. But, between high school and 10 years after high school, that becomes an unlikely possibility. High school graduation is like a grenade going off: a million pieces go in a million different directions. Your kid and Mark 2.0 aren't part of an army unit that gets "A"s in high school, then marches off to MIT as a group, then starts Facebook 2.0 as a group, then conquers the world as a group. Your kid ends up here and Mark 2.0 ends up over there and, most of the time, everybody ends up on completely different paths. And, after 10 years, high school feels like a very, very long time ago. People and circumstances change; dreams get dashed. Some people don't want to do the work. Some want to insist on their own way and the world disagrees.
Where will today's Harker graduates be in 20 years? If I had to bet, I bet that they won't be living in the Silicon Valley and won't be among the nation's wealthy or elite. There's just too much that can go wrong and, for most of them, it will go wrong. Childhood fantasies with give way to adult realities.
I agree with all of this. School is important. The problem is what it takes to be successful in school is usually not the same as what it takes to be successful in the work world.
It's been well documented that most people who go to Ivy League schools don't do as well as expected. Not that they do badly, but the elite schools tend to be overrated in terms of cost and how well their graduates do in the work world.
Even people from the Ivy League schools are admitting as much:
I agree with all of this. School is important. The problem is what it takes to be successful in school is usually not the same as what it takes to be successful in the work world.
Yes, school is important. It's a useful ingredient but not the magic ingredient, I think. But I know how desperately parents want the equation to be: highly rated high school -> elite university -> highly successful adult.
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