Tuesday, May 12, 2015

Thank You Janet Yellen: The Median Price of a House in San Jose is 4X the National Avergae

I have pointed out many times that Silicon Valley has a special Fed faucet in the region which results in much newly printed Fed money ending up in the area.

The latest indication of this comes in the form of news that the median price for a previously owned single-family home in the San Jose, Calif. metropolitan area just hit  $900,000.

That first-quarter price was up 11.4% from a year earlier, and more than four times the U.S. median of $205,200, according to the the National Association of Realtors.

This, of course, is a gift from Janet Yellen and the other Fed gods, if you already own a home in the Silicon Corridor, but not so much if you are looking to buy.

I tell friends in the area to wait for the inevitable crash to buy (This isn't likely to come soon) and if it comes at the same time as a major 7.5 earthquake or higher, then buy with your eyes closed. Major earthquakes really cause some people to leave, thus the supply of houses expands and the demand falls. It would be a real shakeout.


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