By sun Shi of Tencent Technology
A large number of technology companies are fleeing Silicon Valley. By the end of 2020, musk will lead Tesla out of Silicon Valley. Prior to this, Oracle, HP and other giants have left, even though HP’s “garage” has been regarded as the birthplace of Silicon Valley.
Behind these tech giants are thousands of employees. The high cost of living and the super high house price are the main causes of the loss of a large number of enterprises and employees.
Even during the epidemic, house prices in Silicon Valley did not stop rising. According to silicon star, in the past half a year or so, house prices in many parts of the bay area have soared by 10% – 20%, and there have been many legendary stories of robbing houses.
It’s just the beginning, according to zillow, a real estate trader. Over the past decade, the story of soaring housing prices in the bay area has been repeated.
In this issue of personal experience, suger, a Chinese intermediary who has worked in Silicon Valley for several years, tells what she has seen and heard in Silicon Valley, the driving force behind this round of rising house prices in Silicon Valley, and the secrets behind real estate transactions in Silicon Valley.
When stocks go up, house prices have to go up. Silicon Valley employees have stocks in their hands, so they have to buy houses
In recent years, the soaring house prices in Silicon Valley is a real situation. Some areas have increased by 20% since November last year. In fact, it is very high in just a few months.
In my opinion, there are several factors contributing to this round of house price rise in Silicon Valley.
The first is the cause of the epidemic. Everyone works at home, so the requirements for the living environment have changed. In the past, young people thought that a house was a place to sleep at home, so they didn’t have much requirements for the living environment.
Nowadays, the conditions of technology companies are very good. Eating and washing can be solved in the company. Even big enterprises like Google even have washing machines, so young people’s requirements for living are not so high.
However, after the epidemic came, the employees were unable to go to the company, so the young people’s requirements for the quality of life at home were also improved, and they felt that the current living environment was not enough, so the transactions in the single family housing market were extremely hot this year.
Another reason is that the house prices in Silicon Valley are positively correlated with the stock market. Although there are some shocks in the U.S. stock market this year, it is still a bull market in general. As soon as the stock market rises, people in Silicon Valley will have more money, because many companies issue options and stocks.
For example, from the end of last year to now, because of the epidemic, the income of the semiconductor industry is not so high, but the shares of many companies have risen by 30%. No one will leave all the money in one basket. What are you doing with the money in your hand? It must be reinvestment. Now in addition to investing in the stock market, it is investing in real estate.
Silicon Valley looks like a big farm with bungalows everywhere, but in fact it is a very modern area. Therefore, we all know that the house in Silicon Valley is a very good investment target, not just a house function.
If you live in Silicon Valley for a long time, you will see that there are very few people working in high-tech companies, whether they are Asian Americans, Caucasians or Indians, who have no house. Therefore, it can not be said that this round of house price rise is driven by the Chinese.
We all know that when I buy a house and sell it after five years, the value-added money may be more than my spouse’s salary, which is basically equivalent to one more person’s income.
Therefore, one is the demand and the other is the economic environment, which both promote the rise of house prices in Silicon Valley.
Being an intermediary in Silicon Valley requires professional integrity and can only speak for one party
Buying and selling houses in Silicon Valley is different from that in China. All the transactions here are completed by the seller’s agent and the buyer’s agent.
In China, there is only one agent in the market. After talking with the seller, we will talk with the buyer. However, our agents are not very good at this kind of thing. Because the broker represents the interests of your clients, and you are connected on both sides, whose interests do you represent? Either the buyer’s price is suitable or the seller’s price is suitable. Credibility ultimately determines that you will not have repeat customers, unless you do one vote on the run, do not care about word of mouth.
So in theory, when trading houses in Silicon Valley, the buyer and the seller do not meet. This is also to avoid some legal responsibilities. Because there are very strict laws for buying and selling houses in Silicon Valley, but sometimes customers don’t understand the relevant laws. They think that sometimes I say something to you out of kindness, but maybe it will lead to disputes in the future, so all the communication in the early stage is completed through the brokers.
Until the final stage, the seller’s agent will set a date. All interested buyers will quote a price or a contract before that date. The agent will show it to the seller, and then the seller will choose his favorite contract. In most cases, the contract is the one with the highest price, which is probably such a process.
Now, in the real estate market of Silicon Valley, it’s common to increase the price of $50000 or $100000 for sellers. It’s not uncommon. There are two factors.
The first is the relationship between supply and demand. Silicon Valley is a very special place. We all think that the land in the United States is sparse and there is plenty of land. We can build houses at will, but Silicon Valley is not. Because Silicon Valley is surrounded by mountains on three sides and faces the sea on one side, its land is fixed, so much, and the quantity determines the relationship between supply and demand.
In addition, there is no law to restrict the seller’s quotation in Silicon Valley. The seller can say that my house sold for $1, and you finally sold the house for $2 million. You can say that the house added $2 million. So the concept of adding 50000 or 100000 does not fully explain how hot the housing market is.
I sold my own house in 2018, plus $400000. People all over the world know that my offer is low, but I have my reasons. A lot of people ask me why I drive so much at a low price, which makes them have a lot of work, so I will explain to them why.
In fact, the main purpose of my asking price for this house is not to scare away customers. It is to let everyone have a chance to understand our house, so that he can like it and sell it at a better price through bidding. Of course, there are all kinds of considerations when we ask for a price. It’s not very common for us to open a price at a low price, but occasionally.
It’s very common for a house to receive 10 to 30 offers this year, as is the case in Silicon Valley. New comers to Silicon Valley, especially young people, may be scared when they want to get married and buy a house for the first time. In fact, there is nothing to be afraid of. Silicon Valley is like this.
Most people don’t buy houses in the seaside or mountain of Silicon Valley. Foreigners also look at the middle school district
There are not many people in Silicon Valley who buy houses by the sea or in the mountains. Silicon Valley is now a metropolis, which means that the traffic is very heavy and people spend more and more time on the road. Therefore, when people in Silicon Valley buy a house, they should consider the convenience of life and the school district. Therefore, transportation is a factor that can not be ignored.
First of all, houses on the seashore and mountain do not have such geographical advantages. Good houses on the real mountain are also very expensive, which limits some people’s desire to buy.
Another reason is maintenance costs. The climate in Silicon Valley is very dry, so the maintenance cost of wooden houses is relatively low. However, if they are on the beach and affected by the salty and humid air, the maintenance cost of houses is relatively high, and the workload is relatively heavy, so many people are not willing to buy in such places. If you buy a house on the mountain, there will be a big fire every winter, which makes the insurance of the house on the mountain very expensive. There used to be such a popular idea: I work in the central area, and go home to paradise, but now this idea is no longer popular.
As mentioned above, silicon valley also has the concept of school district. School district houses are very expensive, and you will find that foreigners also attach great importance to school districts.
Silicon Valley has the top community in the United States, but the school district of the top community is not so good, because the really rich people are private. In some communities where the working class like to live, the school district is generally better. There are white people and Chinese people here. Everyone has the needs of the school district, so it can’t be said that the Chinese people have set the Silicon Valley School District on fire.
Among the immigrants, most of them are Asian
I also know some people who hoard houses in Silicon Valley. In fact, there are both European and American people and Chinese people. Some Americans were born and raised here, and their parents’ houses were left behind. However, for example, our friends who often serve, employees of Silicon Valley companies, or immigrants, there may be more Asian people hoarding houses.
This round of price rise in Silicon Valley has no effect on most people who have houses. You still want to live. You have to buy this after you sell it. In fact, it doesn’t make much difference.
The same is true for those who have hoarded several houses. Now the situation is that the house price does not rise to a certain level. In the middle of the rise, if you sell the house, you can’t buy it again. In fact, it’s all paper money, unless you realize that the house price is at the top, and then I sell it, and when it goes down, I buy it back, which is the only way to make money.
There are also a lot of people who rent in Silicon Valley. The land in Silicon Valley is very limited. As a person in high-tech industry, it’s a little easier to buy a house because of the high salary and the stock. But if both husband and wife are working, not in high-tech enterprises, and their income is relatively low, then you have less choices, so you have to consider renting for a period of time.
But one of the advantages of Silicon Valley is that as long as you have a job and make a down payment, you can still buy a house if you don’t choose the area. The house prices in Silicon Valley range from hundreds of thousands of dollars to tens of millions of dollars.