Thursday, October 25, 2007 and housing prices

As Microsoft just went about offering an absurd amount of money for a fractional ownership of the latest Wall Street gem known as, little do people know that action affects our house search and rent prices. Little known fact of is that they subsidize rental costs of employees who live within a certain radius of the company. In other words, if you’re a (which is located in Palo Alto) employee living in Palo Alto you can get upwards of $600/month towards your rent beyond your regular salary.

This incentive, of course, will continue to keep both rental properties and homes to remain expensive in Palo Alto as those 300+ employees become desensitized to the price of their mortgage payment and rent. This in turn causes a shift of value driving up the prices and others who may not get the same subsidy. Another comparable to this would be inflation, where the same dollar now would not get you the same location as 5 years ago prior.

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