Anonymous
07/25/2019 19:28
Subject: What is stopping NoVA from reaching SV level prices?
Anonymous wrote:It already happened to Seattle with just Microsoft and Amazon. I would like to hear an argument to the contrary. This area is the home of the cloud, big Data. We have firms like Palantir which are the next facebook/google that are already primarily in this area.
A bunch of data centers does not make this the home of the cloud or big data innovation. It just makes this the cheaper land that houses the machinery.
Anonymous
07/25/2019 19:26
Subject: What is stopping NoVA from reaching SV level prices?
Lol this is a bunch of data centers and salespeople selling to govt clients.
Palantir is HQ in Palo Alto FYI.
Palantir is HQ in Palo Alto FYI.
Anonymous
07/25/2019 19:08
Subject: Re:What is stopping NoVA from reaching SV level prices?
Anonymous wrote:For starters, office building height in the Silicon Valley (Sunnyvale, Mountain View, etc.) can be capped at two stories, max. So there is still very restricted space for condominiums and "verticle" housing. There are very few apartment/condo towers. The home owners don't mind the lack of housing since it keeps their home prices high. My in-laws small 3-bed, two-bath ranch with modest yard is worth north of $2.5M.
This and there are a lot of young workers who in several years make a good chunk of cash in stock options. They are faced with either buying a house or a 100K sports car. Some actually choose the sports car but others sink it into a small house which becomes an investment. Foreign investors sink cash into the housing market. People who relocate and are still working will keep their home and rent it out in case they want to return because they know they will not be able to afford to get back into the market. People see the appreciation getting further and further out of reach so they stretch more than they should to buy a house.
If you stop this suddenly by building massive density vertically up or getting rid of prop 13 you would collapse the market. The value is all in the land not the actual houses. The only group that was pushing for this was a realtors association. A crash would benefit realtors because there would be more transactions even if they were for substantially less. Inventory is so tight and real estate is so lucrative that there are 50 realtors chomping to get at 1 listing.
Prop 13 should be overturned for many reasons. I am a homeowner and I see it. I think property taxes should be capped only for the elderly. I used to live in a neighborhood with houses that were in the 750k-1million range. When the house around the corner was finally sold, I looked at the listing and could see their property taxes. They had been paying $1600/yr! It sold and the new owners paid $12k last year on an appraised value of 1 million. That neighborhood has increased since they bought it though and most houses sell in the 1.2-1.3 range.
I agree about people buying sports cars instead of investing in to a house. There is a reason that there are teslas everywhere out there. People can live in areas that are more affordable, deal with the long commute by getting a tesla and charging at work or at target, and then use the HOV lane for the commute. It is probably smarter financially then going house poor for a house you really can't afford.
Anonymous
07/25/2019 18:46
Subject: Re:What is stopping NoVA from reaching SV level prices?
For starters, office building height in the Silicon Valley (Sunnyvale, Mountain View, etc.) can be capped at two stories, max. So there is still very restricted space for condominiums and "verticle" housing. There are very few apartment/condo towers. The home owners don't mind the lack of housing since it keeps their home prices high. My in-laws small 3-bed, two-bath ranch with modest yard is worth north of $2.5M.
This and there are a lot of young workers who in several years make a good chunk of cash in stock options. They are faced with either buying a house or a 100K sports car. Some actually choose the sports car but others sink it into a small house which becomes an investment. Foreign investors sink cash into the housing market. People who relocate and are still working will keep their home and rent it out in case they want to return because they know they will not be able to afford to get back into the market. People see the appreciation getting further and further out of reach so they stretch more than they should to buy a house.
If you stop this suddenly by building massive density vertically up or getting rid of prop 13 you would collapse the market. The value is all in the land not the actual houses. The only group that was pushing for this was a realtors association. A crash would benefit realtors because there would be more transactions even if they were for substantially less. Inventory is so tight and real estate is so lucrative that there are 50 realtors chomping to get at 1 listing.
Anonymous
07/25/2019 18:43
Subject: Re:What is stopping NoVA from reaching SV level prices?
Have you been to the west coast and Virginia? One is a lovely and thriving. The other is waiting for the south to rise again.
Anonymous
07/25/2019 18:06
Subject: Re:What is stopping NoVA from reaching SV level prices?
So, as I thought, comparing Palantir, even if it were all here, to Google, is silly?
The comparison between Palantir and Theranos is undeserved, but Palantir is certainly not in the same ballpark as Google or Facebook. They are a consulting services firm dressed up as a Silicon Valley tech company. Palantir stock has a fairly liquid secondary market but the valuations consistently trade below their last round, as reported widely in the press.
i think the strategy for palantir and the genius of peter thiel is that it is similar to pre-war IBM. Pre-war IBM sold punch card machines and random business trinkets for banks and gov. After the war, their massive distribution channel allowed them to beat everyone in selling mainframes. Palantir is essentially a relatively unprofitable channel now but once AI arrives, it would win because of all its legacy experience with data and channel.
Not even close. Palantir is similar to Theranos in that it is hype without any means to achieve a profitable channel. Its propped up be investors wanting to believe rather than face reality and cot their losses. One of the problems that Theranos exposed was a tendency in SV to let the hype seem real when there was no product below it or any viable plan on how to achieve it. Everyone is looking for the next big innovation and they throw the mark far out with no plan to get there. Palantir will not control any part of the emerging AI market.
Anonymous
07/25/2019 17:55
Subject: What is stopping NoVA from reaching SV level prices?
I was just in the middle of the Silicon Valley visiting relatives and have gotten to know the area fairly well over the last 20 years.
For starters, office building height in the Silicon Valley (Sunnyvale, Mountain View, etc.) can be capped at two stories, max. So there is still very restricted space for condominiums and "verticle" housing. There are very few apartment/condo towers. The home owners don't mind the lack of housing since it keeps their home prices high. My in-laws small 3-bed, two-bath ranch with modest yard is worth north of $2.5M. They think our home prices here are...cute.
They also have every company you can imagine. My BIL told me a few weeks ago that to live there modestly, you must earn $150k/year *as an individual*. Below that, you cannot do it.
It's slowly changing, but there simply isn't as much buildable land there as there is here. SV has hills and mountains and a bay ringing it. That's why it's called The Valley.
For starters, office building height in the Silicon Valley (Sunnyvale, Mountain View, etc.) can be capped at two stories, max. So there is still very restricted space for condominiums and "verticle" housing. There are very few apartment/condo towers. The home owners don't mind the lack of housing since it keeps their home prices high. My in-laws small 3-bed, two-bath ranch with modest yard is worth north of $2.5M. They think our home prices here are...cute.
They also have every company you can imagine. My BIL told me a few weeks ago that to live there modestly, you must earn $150k/year *as an individual*. Below that, you cannot do it.
It's slowly changing, but there simply isn't as much buildable land there as there is here. SV has hills and mountains and a bay ringing it. That's why it's called The Valley.
Anonymous
07/25/2019 17:39
Subject: Re:What is stopping NoVA from reaching SV level prices?
There is plenty of innovation in NoVA, it is easy to forget this is defense contractor land and really dark silicon valley or sorts. Do you guys think the engineers at general dynamics, lockheed and Northrup Grummen are not busy working on black projects, lasers and stealth coating?
I had to laugh out loud. Those people are not in this area. They are in Lockheed and NG and the others have locations on the west coast and have a smaller footprint in Boston. The people out here are all the project managers, ops people, back office and the rest of the services.
Anonymous
07/25/2019 17:35
Subject: Re:What is stopping NoVA from reaching SV level prices?
I forgot to add this but someone else has mentioned it earlier:
some areas of the bay area really blocked public transit in the 80s. Towns would fight to have no or only one stop on a train route because they didn't want commuters moving in to their town. The infrastructure (including BART) was not built to handle the amount of passengers that it has now and has not really been updated and expanded to handle the population growth.
these things have combined with jobs being added, so housing costs go even higher (because commuting via public transit is difficult) and has created unbearable traffic situations over the last 10 yrs which then pushes housing costs higher again because people end up willing to pay even more to avoid multi-hour commutes. Everything just keep circling and the only release valve is increasing housing costs.
some areas of the bay area really blocked public transit in the 80s. Towns would fight to have no or only one stop on a train route because they didn't want commuters moving in to their town. The infrastructure (including BART) was not built to handle the amount of passengers that it has now and has not really been updated and expanded to handle the population growth.
these things have combined with jobs being added, so housing costs go even higher (because commuting via public transit is difficult) and has created unbearable traffic situations over the last 10 yrs which then pushes housing costs higher again because people end up willing to pay even more to avoid multi-hour commutes. Everything just keep circling and the only release valve is increasing housing costs.
Anonymous
07/25/2019 17:27
Subject: Re:What is stopping NoVA from reaching SV level prices?
This is such an interesting thread.
We left SV because of the stress on families and kids.
I don't think it is 2% of people who go every year who are finding success in the multimillion range. Ha ha.
It is a much smaller percentage like .02.
I agree that prop 13 is the biggest difference, and that, combined with geographic challenges (a big body of water in the middle, and mountains and foothills on either side) is what has made a special storm.
Also pp asked about people renting - the tax rates are not just for owner occupied homes. They are limited in how much they can increase per year across the board. This keeps property from turning over AND creates a bad situation with school funding that puts more pressure on families.
I agree about the mining camp analogy. That is perfect.
We left SV because of the stress on families and kids.
I don't think it is 2% of people who go every year who are finding success in the multimillion range. Ha ha.
It is a much smaller percentage like .02.
I agree that prop 13 is the biggest difference, and that, combined with geographic challenges (a big body of water in the middle, and mountains and foothills on either side) is what has made a special storm.
Also pp asked about people renting - the tax rates are not just for owner occupied homes. They are limited in how much they can increase per year across the board. This keeps property from turning over AND creates a bad situation with school funding that puts more pressure on families.
I agree about the mining camp analogy. That is perfect.
Anonymous
07/25/2019 17:13
Subject: Re:What is stopping NoVA from reaching SV level prices?
Anonymous wrote:Anonymous wrote:Because it's in Virginia, not California. A lot of people around the county have negative preconceptions about the state, and it doesn't help when there keep being major news stories about Charlottesville, Northam, etc.
You're right. Much better to have stories about human feces on the street, or a homeless problem that is a "violation of human rights" (United Nations, 2018).
Terrible as those stories are, they have not gotten anywhere near the national attention the Charlottesville rally and aftermath and Northam and company's scandals have.
Anonymous
07/25/2019 16:56
Subject: Re:What is stopping NoVA from reaching SV level prices?
Anonymous wrote:So about 2% of people moving there make it big?
It's hard to quantify a % because it depends how you define "people". I'd estimate at least 5% of Y Combinator founders make $10m+ for example within a couple years of admittance. Whatever the %, it feels very achievable to people and that's why they move out here and stay out here despite all the day to day quality of life issues.
Failure is also very common but viewed as a normal part of work. One of my close friends started 4 tech businesses in a row and each of them failed. He kept at it with number 5 and became a billionaire (on paper) last year. More relevant to this thread, his co-founders will take home $100m+ each and dozens of the early employees will fall into that $10m+ bucket. There are entrepreneurs, lottery winners, successful personal injury attorneys and so on and so forth everywhere, but the sheer concentration of youth and wealth in Silicon Valley has achieved a critical mass not found elsewhere.
Silicon Valley has a dark side as I mentioned before. Addiction, psychopathic executives run wild, lack of humanity across the spectrum, suicide. The place has a beautiful but terrible chronic illness. You should be thankful it's not contagious, not hoping your home town becomes the next victim.
Anonymous
07/25/2019 16:48
Subject: Re:What is stopping NoVA from reaching SV level prices?
Anonymous wrote:Anonymous wrote:Anonymous wrote:So, as I thought, comparing Palantir, even if it were all here, to Google, is silly?
The comparison between Palantir and Theranos is undeserved, but Palantir is certainly not in the same ballpark as Google or Facebook. They are a consulting services firm dressed up as a Silicon Valley tech company. Palantir stock has a fairly liquid secondary market but the valuations consistently trade below their last round, as reported widely in the press.
i think the strategy for palantir and the genius of peter thiel is that it is similar to pre-war IBM. Pre-war IBM sold punch card machines and random business trinkets for banks and gov. After the war, their massive distribution channel allowed them to beat everyone in selling mainframes. Palantir is essentially a relatively unprofitable channel now but once AI arrives, it would win because of all its legacy experience with data and channel.
Anonymous
07/25/2019 16:39
Subject: Re:What is stopping NoVA from reaching SV level prices?
Anonymous wrote:Anonymous wrote:
This, especially tax laws, and I also would add a 5th factor. Innovation - presence of large research institutions like Stanford and Cal that provide supply of highly educated graduates and they do cutting edge tech work on campus as well as joined projects. Both colleges have top engineering STEM programs decades ago. Migration of the most talented hungry people from all over the world also fueled innovation and creativity and can do attitude. This may now be different dynamics with COL detracting a lot of people who didn't cash out big or have much fewer chances.
There is plenty of innovation in NoVA, it is easy to forget this is defense contractor land and really dark silicon valley or sorts. Do you guys think the engineers at general dynamics, lockheed and Northrup Grummen are not busy working on black projects, lasers and stealth coating?
This are has has tons of technologists who are experts in existing technical solutions; but we actually don't have a lot of companies who develop technology products or emerging technology solutions.
Anonymous
07/25/2019 16:36
Subject: Re:What is stopping NoVA from reaching SV level prices?
Anonymous wrote:Because it's in Virginia, not California. A lot of people around the county have negative preconceptions about the state, and it doesn't help when there keep being major news stories about Charlottesville, Northam, etc.
You're right. Much better to have stories about human feces on the street, or a homeless problem that is a "violation of human rights" (United Nations, 2018).