Thursday, 27 January 2011

2011 Real Estate Forecast by Major Metro

Here are several forecast of residential real estate price by US metropolitan areas.

In summary:
- The metropolitan area in agriculture and mining oriented central US states are doing ok.
- Metros in Texas where job growth is very strong are doing good.
- The real estate price in major metros in coastal Northeast (NY/BOS/DC) and CA (SF/SJ/LA/SD) seems to be bottomed and have upside.
- The decline continues in Real estate bubble popped areas in NV/AR/FL and inland CA.

1. CC

2. LLM 

- Top 10 markets are San Jose 3%; Orange County 3%; Betheda 2%; Pittsburgh 2%; San Diego 2%; Oklahoma City 1%; Washington DC 1%; Austin 1%; Boston 1%
- Bottom 10 markets are Daytona Beach -11% Orlando -6% Boise -7% Las Vegas -5%

Happy Investing!!!

Vancouver maybe best place to live BUT......

Vancouver is certainly one of the most desired place to live if you have large savings and can afford to live warmer/sunnier place in winter.

Here is some interesting statistics/news about Vancouver:

MERCER Quality of Life Ranking - Primarily targeting expatriates.

Vancouver is ranked 4th.

ECONOMIST Intelligence Unit Livable Cities (2008)
Vancouver is ranked 1st. 

MONOCLE Quality of Life Ranking
Vancouver is ranked 16th.  

HOWEVER, accordingly Demographia's International Housing Affordability Study 2011, Vancouver's median housing price is 9.5 times median household income. Third worst affordability after Hong Kong and Sydney.
Some of the urban planners are wondering as follows:
Unlivable Vancouver |

Tuesday, 25 January 2011

Will any of the fifty largest cities in 2050 world be located in the USA or Europe?

Please state why you believe either way.

Right now, if I counted correctly, there are ten European and US cities in the Top 50 (eleven with Moscow). With the continuing growth of Asian and African cities, will this still be the case in fourty years?

Firstly, let's take a look at world population growth forecast from 2010 Vs. 2030 Vs. 2050. You can see that growth in absolute number is coming from Asia but the fastest growing region is Africa.

World population - Wikipedia

This is Demographia World Urban Areas &Population Projection for 2030 Vs 2009.  

You can see that growth rate for mega cities in African (100%+ growth) Asian (50%+ growth) emerging market is very high while the growth for North American and European cities is very slow (except for US Sunbelt cities such as Dallas, Houston, Phoenix and Atlanta). 

From US and Europe, 7 cities (NY, London, Paris, LA, Dallas, Atlanta and Moscow) will be in Top 50 by 2030.  

So, in 2050, NY and LA will stay as Top 50 metro. Moscow is very likely as well. However London and Paris is probably out of Top 50 metro ranking. Dallas, Atlanta and Houston may make Top 50 list IF they continue to grow in the same pace as they would between 2010 and 2030.

Saturday, 22 January 2011

How does Austin compare to Silicon Valley as a place to live and work (in tech)?

My answer on Quora to: How does Austin compare to Silicon Valley as a place to live and work (... 

live in San Francisco (used to work in Silicon Valley) but invest in real estate in Austin Tx full time. I can points out some statistical difference between SF Bay Area Vs. Austin Tx.

Summary: If you plan to strike it rich in tech OR can afford to enjoy one of the best weather/amenity, come to Silicon Valley. But, if you rather enjoy slower pace of life with family, Austin is the place to be.


Austin: 1,705,075 (Ranked 35th)
Total SF Bay:  6,157,553 (Ranked 5th as combined)
SF-Oakland 4,317,853
San Jose-Sunnyvale 1,839,700

Austin: 2,735,687 (Ranks 25th - 60% increase from 2009)
SF Bay:  7,080,373 (Ranks 7th - 15% increase)
SF-Oakland: 4,901,988
San Jose-Sunnyvale: 2,178,385
Business Journal:
2007-2009 POPULATION GROWTH (Adults with college degree)

Austin has attracted most adults with college degree in this period by attracting middle class folks from high cost metros.

SF has somehow turned around negative migration trend after 2007.
Brooking Institute:
2009 GMP (Gross Metropolitan Products)

Austin: $82B (Ranked 35th)
SF Bay: $449B (Ranked 4th)
San Francisco-Oakland-Fremont, CA $306B
San Jose-Sunnyvale CA: $143B
US Mayor:

Austin: $48,091 
SF Bay: $72,918
- Silicon Valley(San Jose metro) has the highest tech employees ratio and salary with $132K. As for # of workers, total Bay Area tech population of 393K is the largest in USA.- Austin's tech concentration is quite high at 11% but no way closer to that of Silicon Valley. Total tech population is 65K (Vs SF bay's 393K). Salary is also moderately high at $93K.

TechAmerica Foundation:

When it comes to VC funding, no metro come close to Silicon Valley. In 2010, Silicon Vally is forecast to attract $8.5 billion in VC funding (approx. 40% of total US VC funding), while Texas (including Dallas, Houston and Austin) attract $995 million (or 4.62% share). 

National Venture Capital Association Q3 2010 Statistics

- Silicon Valley (San Jose metro) is one the highest educational attainment in USA --- therefore median household income (at $87K) is one of the highest. However, due to rack of land, housing price for middle class family is most expensive (at $739K) and Income Vs. Housing Ratio is out of controll (at 8.52).
- While Austin's educational attainment is second tier, it is ranked 7th in large metro in US. Median household income of $57K is not that high (remember -- Austin's household is skewed to those in 20's), since housing is affordable (at $176K), Income Vs. Housing Ratio is 3.03, the lowest among brainy metros.
There are so many cost of living index but I find the ACCRA Cost of Living Index (COLI) quite accurate.

The ACCRA Cost of Living Index measures regional differences in the cost of consumer goods and services, excluding taxes and non-consumer expenditures, for professional and managerial households in the top income quintile. It is based on more than 90,000 prices covering 60 different items for which prices 
are collected quarterly by chambers of commerce, economic development organizations, and university applied economic centers in each participating urban area. Small differences should not be interpreted as showing a measurable difference.

The composite index is based on six component categories – housing, utilities, grocery items, transportation, health care and miscellaneous goods and services.

SF Bay Area is super expensive (162 in SF and 152 in SJ) while Austin is at around 95.

Ranking Urban Areas Index Ranking Urban Areas Index
1 New York (Manhattan) NY 207.9 
2 New York (Brooklyn) NY 181.3 
3 Honolulu HI 167.8 
4 San Francisco CA 162.0 
5 New York (Queens) NY 158.5
6 San Jose CA 152.4
7 Truckee-Nevada County CA 147.4 
8 Orange County CA 145.7 
9 Oakland CA 144.0
10 Nassau County NY 144.
* US average is 100.

* if you look into detail of COLI, you see that expesive housing is the key reason for high cost of living in above markets. SF Housing index 273 Vs Houston's 80.
Remember, on top of it, if you make $100K+, you are charged approx. 10% on California state tax and, because of progressive tax system, you end up paying more if you get salary rise.....

QUALITY OF LIFE (No consideration on cost of living)

Here is yet another interesting study on Quality of Living Ranking by Metropolitan Area by David Albouy, University of Michigan Economics professor.

Here is the ranking among top 46 metros.  SF Bay Area (and Coastal California metros) by far brings the best quality of life.  Austin is not bad at 17th (out of 46) but is far distant from that of SF Bay Area.

1. San Francisco--Oakland--San Jose, CA CMSA
2. San Diego, CA MSA
3. Los Angeles--Riverside--Orange County, CA CMSA
4. Seattle--Tacoma--Bremerton, WA CMSA
5. Miami--Fort Lauderdale, FL CMSA

12 Austin--San Marcos, TX MSA

42 Cincinnati--Hamilton, OH--KY--IN CMSA
43 Memphis, TN--AR--MS MSA
44 Grand Rapids--Muskegon--Holland, MI MSA
45 Buffalo--Niagara Falls, NY g , MSA
46 Houston--Galveston--Brazoria, TX CMSA

Methodology of this study is as follows:

- Heating-Degree Days
- Cooling-Degree Days
- Sunshine, fraction possible
- Precipitation
- Proximity to Coast, salt or fresh water
- Violent Crimes per Capita
- Median Air Quality Index
- Restaurants and Bars per Thousand
- Places Rated Arts & Culture Index
- Residential Land Use Regulatory Index
- Sprawl Index
- Local Expenditures net of Local Taxes
- Federal Spending Differential


Based on Camelot Climate Index: , out of 158 metros, San Francisco and San Jose is ranked 2nd and 3rd respectively (after San Diego) while Austin is ranked 68th.