Mercury News: $500,000 median home price has strategic implications
“When you price at $499,999, people think it’s $400,000, even if it’s only a dollar away (from $500,000),” said Greg Wang, an agent with Realty World Alliance in Milpitas. “It’s just perception, and you know perception is reality sometimes. . . . At 500, they say `500, that’s too expensive.’ “
Are buyers that stupid?
Actually, they’re not. A person buying today with appreciated stock is making a rational decision. A house — even if the value drops in half — is worth more in all kinds of ways than options or stock that may drop even more, or which may be worthless. Never mind the benefits of living near work.
But anyone who thinks this isn’t a mania isn’t paying attention, either — and the consequences will be real enough one of these years.
Welcome to Tokyo, circa 1989, folks. Real-estate prices in the valley are beyond absurd, and getting worse every day due to a speculative bubble that just won’t quit.
It brings to mind a saying I heard about a real-estate boom that went bust in southern California about a decade ago. “The race is on,” someone said, “to build the last successful shopping center.”
I don’t know if the valley is headed for a crash one of these days, but it’s certainly pricing itself out of the market for all but the top-paid and/or wealthiest people. If anyone thinks this is healthy, think again.
The other thing to consider is what Silicon Valley makes these days — tools for communication and collaboration.
There are many good reasons to want to be in the Bay Area. Slowly but surely, however, Silicon Valley is sowing the seeds of its own self-destruction.
Napster a Throwback to the Future
Jakob Nielsen has some important new thoughts on user-interface design, and he points to Napster as an example. Fascinating twist on a story that continues to evolve.
Also:
I have news for the owners of intellectual property. This war is only beginning.