Buying a house in Silicon Valley can sometimes make you feel as if you’ve just bought into some Ponzi scheme. Will the prices keep going up? Or will I be one of those suckers left holding the bag (i.e., a mortgage that’s larger than my home equity) if the real estate bubble bursts?
Those of you who worry about this might find solace in the population projections released by the California Department of Finance in July 2007. According to this report, California’s population is projected to reach almost 60 million people by 2050, adding over 24 million to the current population. And in Santa Clara County alone, we’ll have to add housing for almost 900,000 more people in the next 43 years, if you buy into the 2010 population estimate of 2,624,670.
In a recent New York Times editorial, “Trying Times Ahead: The Prospect of 60 Million Californians,” columnist Verlyn Klinkenborg put this into more tangible terms: “To say that for every three Californians now there will be five in 2050 doesn’t’ capture the scale of change. If you said that for every three houses now, there will be five in 2050, or for every three cars, ditto, you might be getting a little closer to the visceral feel of the thing.”
So as long as you’re in it for the long haul in the Silicon Valley housing market, the dynamics of supply and demand are in your favor.
Table Source: Steve Leung’s Excellent 1SiliconValley Blog
United States
Canada