>The very first thing I noticed was how young the average employee is. It was a little startling. I've heard different theories
These salaries come with a big gamble on SV real estate and the market performance of these companies. The first one is a big difference between young and middle aged people. In my 20s I averaged a new home every year as my financial situation changed and I wanted to live in different parts of a city. Now in my 30s with a wife and kid I don't expect to move for 10+ years. The only way to achieve that is buying a house. Which, in SV, means plunking down 3-4 million. That's doable given the salaries, but it's a huge bet that the real estate bubble won't burst.
Same thing with the market performance. Sure, the FAANGs + MS (and minus Netflix) make a ridiculous amount of money and that likely won't change. But what about companies like Snap, Pinterest, Lyft, et.al. that lose money? There's a huge risk that these companies (1) go bankrupt or (2) decide to focus on profitability and slash their engineering workforce.
If you're a 20 something renter you ride the gravy train as long as it keeps coming. If you're a 30 something with small kids and a mortgage you want stability.
Now in my 30s with a wife and kid I don't expect to move for 10+ years. The only way to achieve that is buying a house. Which, in SV, means plunking down 3-4 million.
I think you're pretty deep in the bubble or you have really extreme tastes. I have tons of friends in their 30s with kids in SV and NYC. Almost all of them are renters. The actual financial calculation for renting vs. buying in these markets is brutal. You need to stay for 10-20 years for buying to start to make sense.
Also, you don't need $3-4mm in either of these markets to buy a place suitable for two adults and a child. There are plenty of 2 bedrooms for a third of that.
These salaries come with a big gamble on SV real estate and the market performance of these companies. The first one is a big difference between young and middle aged people. In my 20s I averaged a new home every year as my financial situation changed and I wanted to live in different parts of a city. Now in my 30s with a wife and kid I don't expect to move for 10+ years. The only way to achieve that is buying a house. Which, in SV, means plunking down 3-4 million. That's doable given the salaries, but it's a huge bet that the real estate bubble won't burst.
Same thing with the market performance. Sure, the FAANGs + MS (and minus Netflix) make a ridiculous amount of money and that likely won't change. But what about companies like Snap, Pinterest, Lyft, et.al. that lose money? There's a huge risk that these companies (1) go bankrupt or (2) decide to focus on profitability and slash their engineering workforce.
If you're a 20 something renter you ride the gravy train as long as it keeps coming. If you're a 30 something with small kids and a mortgage you want stability.