Event Coverage
Large Turnout at First In-Person Eventure Series
An estimated 70 SILVAR members attended the Menlo Park-Atherton-Palo Alto Districts Joint Eventure Series at the Little House Activity Center in Menlo Park last week. It was the Districts' first in-person meeting in two years. Jeffrey Traum, CIMA, with Morgan Stanley Wealth Management, was the guest speaker and spoke on the capital markets and ultra-high net worth (UHNW) families and their influence on Silicon Valley's real estate.
Traum referred to his handouts of graphs and charts which showed from the Great Depression to the present, over the long term, the S&P 500 has grown, despite many negative events. The data illustrated the Fed funds rate from the 1980s to the present, the money supply in relation to the equity market, the similar trends in the S&P 500 and the NADAQ, whose year-to-date total returns are now down 19% and 27%, respectively.
U.S. tech issuance and tech IPO volumes, which were at a high level in 2021, are lagging. Venture capital investors have become more selective on where they deploy their capital and what models they fund.
Traum's data cited among companies cutting jobs are Twilio (800), Robinhood (713), Netflix (300), Coinbase (1,100), AppLovin (300). Apple, Google, Meta and Spotify have announced plans of either freezing or slowing down their hiring of workers.
Silicon Valley's foreign and domestic migration trends also show more people are leaving the region. Factors weighing heavily on the out-migration trend and slowing housing demand include rising mortgage costs; fewer home purchases from mainland China due to Covid lockdown and the slump in the global economy; decline in the net worth of UHNW families year-to-date due to a volatile stock market, and families moving away either to be with their children and grandchildren or to places where taxes are lower; and remote work, which has taken off because workers remain connected and are more comfortable not having to commute.
Silicon Valley's foreign and domestic migration trends show more people are leaving the region. Factors weighing heavily on the out-migration trend and slowing housing demand include rising mortgage costs; fewer home purchases from mainland China due to Covid lockdown and the slump in the global economy; decline in the net worth of UHNW families year-to-date due to a volatile stock market, and families moving away either to be with their children and grandchildren or to places where taxes are lower; and remote work, which has taken off because workers remain connected and are more comfortable not having to commute.
Meanwhile, supply constraints continue. New construction is bogged down due to the higher cost of materials, funding and shortage of workers. Many sellers are hesitant to sell because moving costs have increased, mortgage rates are higher, and moving elsewhere would trigger capital gains and a higher property tax.
The Fed's interest hikes are meant to slow down inflation which has brought pressure on prices. As a consequence, net worth is down, profits are down, unemployment is slowly rising. The hope is for inflation to take a turn for the better and eventually ease pressure on prices.
"Opportunity is created with low prices," according to Traum.
Photo Gallery
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
For further information, please email or call the SILVAR office at (408) 200-0100.