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IPO effect on SF house market

Started by jeff, April 26, 2019, 10:47:00 AM

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QuoteWhen I wrote, Why The Tech IPO Boom Could Cause Real Estate Prices To Fall Further, I highlighted an unlikely scenario. I'm estimating there's only about a 30% chance tech IPOs will cause a slumbering supply bear to wake up and flood the market. I just wanted to warn home buyers not to lose their minds when leveraging up to buy a risk asset.

This, from your April 20 newsletter, sounded pretty defensive to me. I'd read that article when it was published in mid-March and I didn't remember it sounding like a a simple warning to homebuyers. Nor did I remember you estimating an only 30% chance that the impending IPOs would cause a bear market. I remembered you taking a pretty definitive position that, at the time, was contrary to many op-ed columns being written about the issue. I thought it was an interesting take.

So I clicked the link in the newsletter and re-read the piece. Sure enough, there it was:

QuoteOverall, I assign a 30% chance the tech IPO boom causes SF Bay Area prices to fall, meaning there's a 70% chance the tech IPO boom is neutral or beneficial to the real estate market.

I was curious how I had forgotten or mis-read the crux of the entire piece. But thanks to the Wayback Machine, I learned that I didn't. In fact that line was added April 19, a day before your newsletter went out. And further, the original text of the article doesn't mention "30%" anywhere. It doesn't hedge anywhere. And the original text largely remains the same until the article is re-worked around the new position that tech IPOs might, but probably won't, "cause a slumbering supply bear to wake up and flood the market."

The article in March, after publication:
The article today:

What's up with this, Sam?


Awesome digging.

It was to clarify my thoughts after several reporters (bold italic and sf chronicle started asking me about my opinions post that article.  I hope that's OK with you Jeff.

People thought that I believed the tech IPO boom would absolutely cause prices to fall further. But that's not the case. I wanted  to highlight HOW this scenario could happen. But I think more than likely the party will continue especially given rates came down this year. There are no absolutes, and my title does start with HOW.

How about you? What do you own in the bay area and when did you buy? What are your thoughts  about the tech IPO boom and San Francisco real estate? My hope is that more readers share their analysis and opinions instead of just relying on me.

I'm saying supply increases, but demand seems to really be heating up.



The practice of updating an article to revise its main thesis from implying something is a likelihood to saying there's probably only a 30% chance of that thing happening without any editor's note or transparency about it kind of bothers me, but it's your site and I pay nothing for it so I guess that's what my opinion is worth.

As for me, I don't own any real estate in the SF market or elsewhere, but it did always seem likely to me that when lots of new liquidity flows into a market, prices should rise. Though I'm not an expert.

I'm happy to think critically and share my analysis, but you're the expert here. People read FS because you have some authority. That's why what you did kind of irks me.


Got it. I apologize for updating my article to make it more clear given the questions I received after publication.

BTW, in another thread, you ask why your colleagues are all paid more than you. Building a support network of people who like and root for you have a lot to do with it.



Insult me all you want, Sam, but if a news organization ever made a change to an article like the one you made to yours, it would be noted at the very top in an editor's note. Cheers.


Not sure how apologizing is an insult.

FS isn't a news organization. It's my personal finance site and I can do what I wish.

I'm trying to understand your background as to why you would be so hot and bothered about me editing a post for clarity and I saw that you said you were struggling.  If this is an example of how you act at work, it really is going to be very difficult for you to get ahead. It's better to respect others and treat them nicely, especially if you are a guest at their house.



This is getting childish. You're right that it's your site. I shouldn't have pointed it out. And I am struggling greatly -- acting out at work and being disrespectful, treating others poorly. So I really shouldn't comment at all. I'm going to leave your house now.


Well said Sam! He totally overreacted imo and am glad he has bowed out of this thread. People say so many bizarre and rude things online without thinking and forget how to communicate in a polite and respectful manner.