Start Spreading the News…In the 20th Century, New York was and still is to this day, an exciting, robust city of concrete canyons, steeped in tradition and the home of Wall Street, High Fashion, Broadway and top rated Restaurants. They have historically led the way in firmly establishing America as a World Power. The Global Economy is still perceived to revolve around the powerful, gritty engines of New York powerbrokers.

But, this is the 21st century and the drivers of the world economy are starting to shift westward. Nestled in between the lush coastal mountains to the West and the arid, Diablo Range to the East, Silicon Valley, which for all intents and purposes, includes the suburbs and Bay Area cities of San Francisco, San Jose and Oakland, is becoming the new, New York.

New York arguably is and will always be the financial capital of the universe…But even that sector is highly influenced by software and hardware that has been engineered right here in the Bay Area.

New York does indeed maintain the bulk of the nations stalwart, Blue Chip industries…

The Silicon Valley, on the other hand, is not interested in maintaining…It’s only interested in culturally defiant initiatives like disruption, the Internet of Things or in colloquial jargon, “Thingfication”…All intended to change the way we live almost every aspect of our lives.

My near perfect home for the past 18 years has changed the way we transact our finances, conduct business from every discipline, educate our children, treat illnesses (Leader In bio-tech), communicate, play games, buy and listen to music, watch and pick TV & movies, rate and make reservations for restaurants, travel, buy and drive cars, heat and cool our homes, track and read our news, participate in politics and so much more.

New York has AIG, IBM, Pfizer, JP Morgan Chase, Morgan Stanley, Time Warner, AmEx, MetLife, Merrill Lynch and Verizon to name a few. All solid companies that have been around for generations… According to Crain’s Wealth, from 2000-2010, New York had a net loss of $45.6 billion in personal income from people leaving the state.

The Silicon Valley continues to innovate and leads the world at a pace in much the same way New York led in the early to mid 20th century and is world headquarters to tech titans such as Google, Apple, Facebook, HP, Intel, Oracle, Yahoo, Cisco, LinkedIn, e-Bay,, Adobe, SAP, Riverbed Technologies, Intuit and NetApp to name a few.

The area has also spawned those aforementioned disruptive technologies and companies that have transformed the way we experience and entertain our lives. You may have heard of them…Tesla, Nest, YouTube, Yelp, Uber, Lyft, Airbnb, Pandora, Twitter, Pinterest, Netflix, GoPro, Electronic Arts, Pixar, Sega and Zynga.

Bio-tech headquarters of Genentech, Gilead, Bio-Rad, Chiron and more employs tens of thousands locally and has helped produce drugs and health products that enrich our lives and health.

But as all big, older metro’s, the Bay Area is home to non-tech giants as well.

The Bay Area is headquarters to the financial sectors Wells Fargo, Visa, PayPal, Charles Schwab, Franklin Templeton. In energy Chevron calls The Bay Area home.

Our apparel retail and consumer products based companies are All-Star caliber and include a mix of top brand names known Worldwide…Brands and stores such as…Levi’s, The Gap, North Face, Bebe, Gymboree, O’Neill, Ross, Williams Sonoma, Restoration Hardware, Pottery Barn, Cost Plus World Market, The Clorox Company, Safeway and…don’t forget about all of the Napa and Sonoma County wine brands…way to many to mention here.

And of course, our educational institutions are the some of the most desired in the World as well…Stanford, the new “It School” according to the New York Times, UC Berkeley, Santa Clara, USF, UCSF and more.

So what does all this mean for Real Estate?

Well, the Bay Area has another product that New York can never compete with and is one of the top reasons why young, talented college students, armed with their wealth of knowledge from the worlds top universities want to move here…Our weather (read..NO SNOW), our quirky culture, and beautiful scenery.

The population today has swelled to over a million more people (Total CSA Population of 8,469,854) than were here during the 2000 census…which was the height of the dot-com boom….compared to only a 400,000 growth in the greater New York area. In those 10 years, many of the aforementioned tech companies have grown exponentially, and now have the highest valuations of any corporations nationwide.

More important, that growth brings in jobs…great paying jobs…complete with stock options…There is no sign of struggling here like in many rust belt metros. Unemployment in many communities in the Valley are well below 4%. Some 76,000 jobs have been created in just the past few years, and that job number continues to grow in a Moore’s Law like fashion. More impressively, the regions economy would rank 19th in the world if it were a nation. (Don’t believe it? Read this Link)

And, those employees that have those jobs, are highly skilled, highly paid employees that are part of OUR culture now…Jobs equal stability…Stability equals compounding wealth…Compounding wealth needs an outlet to spend that wealth and home buying is one of those. Just take a a look at our dearth of home inventory today and they all seem to be buying homes all at once.

It’s this increased demand from high net worth individuals that are driving our prices up, engulfing our available inventory and posting our average home sales prices to a million dollars and rising.

Is this a bubble? Well, a bubble is a thin skinned, penetrable object that bursts. Economic bubbles happen when asset prices appear to be based on implausible or inconsistent views about the future. 2006-2008 was a bubble/crash event because it existed based on implausible financial instruments luring people into loans they could not pay back….which many didn’t… and the real estate market crashed from excess inventory caused by loan defaults.

Today, the home buying buying is as robust as it was in the mid 2000’s, but…so is the financial net worth of the buyers. With innovations in technology being steadily invented here everyday and our nations appetite for more of the next big thing, job growth may slow down to a flatline in the future, but not enough to put a strain on real estate.

One notable trend, 30% of transactions the past year were all cash buyers. The remainder are conventional loans with 20% or more down and a market infused equity gain that makes that loan to value gap grow each day. It’s nearly impossible to default on a loan when you have plenty of equity or owe nothing altogether.

So, today, the Bay Area is experiencing via economic growth, what New York experienced in the mid to late part of the 20th century. The Big Apple had a decades long run as the most expensive place to live in the U.S…Now, that belongs to San Francisco. And, while we don’t come close to matching New York’s culture, fashion and theater scene…our substitute for that is our beautiful weather, gorgeous geography, diversity and quirkiness.

It’s the place to be…and the proof is in the home buying activity…Why would someone want to pay $1.3 million dollars for a 3 bedroom, 2 1.2 bath, 1700 sq ft home? Many of my clients answer that question really fast…Because they can…They undeniably love it here, they feel safe in their career, they can afford it and THAT ALONE makes buying a home here totally worth it to them. Yes, like New York, our homes are smaller for the price than other parts of the country, and to outsiders that may seem like a sacrifice…but, the rest of us see it as a privilege just to live here….All 8 million+ of us. So, start Spreading the News…Invest in Real Estate here today!

This content is not the product of the National Association of REALTORS®, and may not reflect NAR's viewpoint or position on these topics and NAR does not verify the accuracy of the content.