What would cause the tech companies to move out of the Bay Area? (San Jose: section 8, foreclosed)

[Opus One]

Originally Posted by NewbieHere

Mostly minimum paying wages. But lots of them.

Doesn't make sense. How does minimum wage pay 2,000 dollars + a month for a house?

[NewbieHere]

Originally Posted by Opus One

Doesn't make sense. How does minimum wage pay 2,000 dollars + a month for a house?

Have you heard of shared room? My kid hired someone recently, I believe she's paying this person $20 an hour as a assistant, but this person is sharing a room with her sister. She doesn't have her own room even. Years ago, I shared a room with 3 other people until my family got kicked out of the apartment.

[Opus One]

Originally Posted by NewbieHere

Have you heard of shared room? My kid hired someone recently, I believe she's paying this person $20 an hour as a assistant, but this person is sharing a room with her sister. She doesn't have her own room even. Years ago, I shared a room with 3 other people until my family got kicked out of the apartment.

This sounds an awful lot like tenement living in the 19th century. Is that REALLY enjoyable?

[NewbieHere]

Originally Posted by Opus One

This sounds an awful lot like tenement living in the 19th century. Is that REALLY enjoyable?

It was a large room. Yes it was enjoyable, not a hardship. But only for a few years. It beated the alternative. It was not meant for long term. We got each other, I mean family members. It was fun. My mom even let others sleep in the living room. The more the merrier. She didn't charge them. No privacy was the only downside. But better than living in a dorm. My kid's dorm is much smaller.

[Opus One]

Originally Posted by NewbieHere

It was a large room. Yes it was enjoyable, not a hardship. But only for a few years. It beated the alternative.

The problem is how do they buy a house "eventually" That few years sounds permanent.

[NewbieHere]

Originally Posted by Opus One

The problem is how do they buy a house "eventually" That few years sounds permanent.

Pooled resources. At the time only 2.5 people were working on a little bit more than minimum wages. It can be done. Within 2 years, my family purchased one of those 50s bungalow houses, that's probably worth $400-$450k now. Not much but it's paid off as in no mortgage and nobody had won the lottery.

[Opus One]

Originally Posted by NewbieHere

Pooled resources. At the time only 2.5 people were working on a little bit more than minimum wages. It can be done. Within 2 years, my family purchased one of those 50s bungalow houses, that's probably worth $400-$450k now. Not much but it's paid off as in no mortgage and nobody had won the lottery.

You can't put 5 separate people on the title.

[NewbieHere]

Originally Posted by Opus One

You can't put 5 separate people on the title.

3 with jobs on the title.

[Opus One]

Originally Posted by NewbieHere

3 with jobs on the title.

What happens if they are no longer friends? What mortgage company would agree to this?

[artillery77]

For the original poster. Ending Direct Investment. According to Wikipedia, Silicon Valley received 46% of all US investment dollars in 2012. When half of a country's total investment is stuffed into a 50 mile radius area, things are bound to go nuts, and when success is measured in getting funded as opposed to making money a whole host of new factors pop up.

Detroit in its day had the key innovation of the century both in terms of product and manufacturing prowess, but they also had financial backing to do it. If incoming venture capital dries up, the local economy will implode as a lot of these companies are making great products, but not necessarily great profits.

When I first started following stocks, technology firms would trade with single digit P/E ratios. The reasoning was that their products would be obsolete in only a couple of years, and you needed to place value on the firm's engineering capability to continue to innovate. It was generally considered smarter to miss out on a couple bright years for a company, and see if they ever established a product line that would maintain.

Wall Street now has an opposite outlook on tech and risk. As long as Wall Street values being part of the next big thing over the risk of funding something that is not the next big thing, Silicon Valley will thrive. When/if they change their minds, 2009 will replay, but without a bottom until the next big thing gets valuable again. Our economy now requires significant capital inputs merely to maintain, and we've created fixed structural costs in all levels of the state and local government that assume those inputs will never go away. We better have a Facebook, LinkedIn...someone, anyone going public...and the wealth trickles down from there.

So now we do the tech dance. Frankly, we have no other choice unless someone thinks there's another way of getting almost half of the country's investment to come to our doorsteps for longshot odds on a company ever making a profit.

We won't have Detroitification. We'll have a feudal system...and wonderful weather.

Gotta love the weather.