Knock Down Cisco, and Intel?

Knock Down Cisco, and Intel?
- Businesses Could be Bulldozed to Solve House Shortage
(SEATTLE) 08/07/04 - In a bizarre symptom of an intractable economic mess, commercial property values in California have plummeted, while at the same time, surrounding house prices have reached all-time highs. The news comes at the same time companies in California are finding it increasingly impossible to hire new employees—precisely because housing prices are so high. Yet according to many economists, and based on simple mathematics, in order for house prices to be justified, new employees have to be hired at much higher salaries. But this can’t happen at current price levels.

The pieces of news, coming at the same time, suggest the highest possible inflection point has been reached in the California housing market; the bubble simply cannot stretch any further, and a firm reversal is in place. The news also comes at a time where major California employers, such as Intel and Cisco, have announced major shortfalls, suggesting the employment market is profoundly trailing the housing market. California leads other areas of the country in this respect—yet it is by no means the only “bubble area.”

The development comes as an extreme disappointment for the US economy, as it is another sign that housing has begun to weigh on large portions of the US economy. One possibility going forward? Major corporations such as Intel, Cisco, and others might knock down employee buildings and sell land to home developers, who are afforded virtually unlimited capital through mortgage lenders. Former employees might then extract wealth from the new homes, negating the need for work, and maintaining a low inflation rate, allowing others to borrow more.

References: Property tax slide a surprise Falling valley property values erode tax base SILICON VALLEY/SAN JOSE BUSINESS JOURNAL Aug. 29, 2004 Falling Commercial Property Values.

Home economics San Diego UNION-TRIBUNE September 5, 2004 Houses Too High to Hire

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1. This reminds me of the Japanese real estate market in the '80's.

What a *ucking mess!

2. It is a mess--it ain't just California

I think it shows how little is invested in generating jobs in this country--the message is clear:

"DON'T build a business in the US, build a house INSTEAD?!?"

They actually are talking about knocking down seaports in Seattle to build condos. Yet, there are vacant condos and apartments all over Seattle!??

A long-time real estate guy here in Seattle SOLD his house, and started renting.

I also read that in Las Vegas, there are lots of empty houses which were built for speculation.

Note, Bush has been bragging about "home ownership" under these conditions--and that "America is the best place to do business"; if so, why are commercial values plummeting next to hyper-inflated home neighborhoods?