Million dollar shacks and ‘ghost houses’, progress?

Rock bottom rates, asset bubbles and capital fleeing Asia, we have seen this movie before. Prices at a “permanently high plateau” anyone?

Our family has been priced out! Has the Bay Area gone crazy? Real estate prices have doubled in the last few years, a tent in the backyard can rent for $900/month, foreign investors are driving up prices, evictions and rent hikes are everywhere, people are commuting longer than ever, the middle class is disappearing, empty investment homes are everywhere, and locals are leaving in record numbers. The worst part? Some people are calling it “progress”. Here is a direct video link.

I would take exception with the real estate agent’s contention near the end of the film that you just need to have a higher IQ and better education today to be able to afford a home. Massive leverage and debt driven asset bubbles typically make participants look brilliant on the way up, and then really dumb on the way down. Stay tuned.

For more perspective on the extent of the most recent tech bubble from an insider see Venture Outlook 2016:

“…looking out into the 2016 horizon, what do I see? Perhaps I would call it “Mourning in VC [Venture Capital]” as in mourning for the days of rational behavior. There is nobody to blame for this abandonment of common sense – it is simply the market being the market and we’re doomed to repeat history. Boom and bust.”

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