Although many will still argue that we are not in a tech bubble, those numbers are decreasing as more and more evidence point to the opposite.  I wrote a post back in July of 2011 saying that I have noticed moment in the housing prices in Palo Alto and Mountain View California. And now I present to the court, further evidence of the beginning of the housing bubble.
With the coming FaceBook IPO, and few past IPO’s like Zinga, recent improved unemployment numbers and a bull run on the market, there has been a lift in the general economy for the California Bay Area. What does that mean for housing prices in silicon vally? It means a $50,000 jump in just the last 4 months. $100,000 in some area and houses that have been sitting for months are suddenly being snapped up with cash Already I’m hearing commercials on the radio for flipping houses. Here we go again.
Are we on the beginning of another bubble? Perhaps. However, this time I think we are going to see more intelligent investment then during the late 2000’s and although there will be a bubble, it will not be quite as large, quite as fast and thus not quite as fragile. This does not mean we will not see crazy housing prices and multiple bids? Heck no, in some area’s that has already started.
Right now the fast money is in the lower peninsula and San Francisco. Most likely in 2013 we should see the more general recovery of the economy in full swing and the house flipping game to start up again and demand from those renting and newly rich look for homes.
What will be different this time is money will be harder to get and thus the bubble will not grow as fast. And that is a good thing if you are looking to buy now and hold on for 5+ years. However, if you are looking for the good old days of buying 3 or 4 houses with nothing down hoping to flip in a year, good luck. Although housing prices are just now starting to rise, there is way more housing stock still left to hit the market and harder for dumb money to get into the game.
So, if you are looking to buy, you are 6 months late to the table, but its still a good deal. But don’t wait too long or you may find yourself priced out (even more so) of the bay area.