Tech is BACK!....Housing downfall might be limited in San Diego afterall.

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Submitted by forsale_2007 on April 25, 2007 - 6:29pm

Well, the good news. Preliminary earnings report from many of the tech companies have been great. And the ones that haven't, investors really aren't paying attention to shortfalls (IE JNPR)....

Apple, Intel, Amazon, Google. Tech is BACK!
Great news for geeks.

Another thing. Qualcomm just announced earnings, and they raised forecast again. What does this have to do with the housing market? Considering that Qualcomm is probably the largest employer here in SD, and fortunes are made with stock options,etc.... The housing downturn might not occur so soon after all for well paid owners in relatively ok areas...

Comments?

Submitted by The-Shoveler on April 25, 2007 - 6:49pm.

Nor_LA-Temcu-SD-Guy

I would love for this to be true (Tech is Back!!) (and hope it is), But I think it has more to do with selling in euro's products made here and abroad (in cheap labor area's).

Riddle of the day --- If your sales to Europe are flat, but you manufacture in China ... Do your earnings go up ????

Europe's and China's economy is not completely disconnected from ours I believe so I think it is just a matter of time before the chickens come home.

Submitted by deadzone on April 25, 2007 - 9:18pm.

Are you pulling this out of your rear? A tech rebound will have no affect on the local housing crash. Also, Qualcomm is not the largest employer in SD. I'll guarantee there are fewer highly paid tech jobs in SD today than in 2000, yet housing prices doubled or tripled since then. That proves there is absolutely no relationship between local tech jobs and the housing boom.

Submitted by forsale_2007 on April 25, 2007 - 9:25pm.

Yes I am pulling this out of the rear. But you take say 8000 jobs at qualcomm and cut them by 30% because of a bad quarter or future prospects, and I guarantee you that housing will be affected.

But that will have to wait. Until the prospects of companies like QC crumble drastically, there are plenty of millionaires roaming these streets.

Submitted by Cow_tipping on April 25, 2007 - 9:30pm.

Are you pulling this out of
Submitted by deadzone on April 25, 2007 - 11:18pm.
Are you pulling this out of your rear? A tech rebound will have no affect on the local housing crash. Also, Qualcomm is not the largest employer in SD. I'll guarantee there are fewer highly paid tech jobs in SD today than in 2000, yet housing prices doubled or tripled since then. That proves there is absolutely no relationship between local tech jobs and the housing boom.

Correct, and it includes me. OK make it 2001 and I am like so in. Of course I am the minority, I just went across the country. Most of the other jobs like mine went clear across the pacific.
Cool.
Cow_tipping.

Submitted by masayako on April 25, 2007 - 9:51pm.

forsale_2007,

It doesn't matter. QCOM's earning will make NO DIFFERENCE to housing rebound.

For low-life QCOM engineers (I was one of them): They don't make enough to buy entry level home at this price range. Stock options make no difference. You talk about $10k-20K stock options max. for them.

For mid-life QCOM engineers/managers: They are smart enough to know NOT TO buy in at this dropping market. Second, they are "move-up"pers. They can't buy unless they can sell, which we believe, they can't.

For high-flying QCOM geeks/directors: These are limited characters. There are only a few of them out there, so it won't affect the massive housing in the broad way.

Always remember, not all QCOM employees are millionaires. They are not stock brokers from Morgan Stanley. Many of them are new college grads with not much savings. They make $60k to start their career. Not even enough for a 2/2 condo near the office. They are just looking at the housing bubble and hoping to buy an affordable home someday. They don't have the MONEY to pull the trigger at this point unless the price drop way down. By the way, they are good at math too, so they know when the numbers work for them -- NOT NOW. ;)

Masayako

Submitted by forsale_2007 on April 25, 2007 - 9:56pm.

I didn't say housing was going to rebound. But a amagadon housing slump would have been nicely accelerated if you had an employer(s) like QC dump. It hasn't, and will probably take some time for this to happen.

Submitted by capeman on April 25, 2007 - 10:34pm.

Yeah but as a Blue Chip style company QC doesn't give squat for options anymore and if they did they won't be seeing the 4000% growth they did in '98-99. This housing party is over and nothing short of a HUGE war will soften the crash. Sentiment will turn at some point in the next year and then free-fall. The lending spigot has been shut off for this price range so it is just a matter of when everyone realizes their house is only worth 40-70% of what they thought then it will play out.

Submitted by whybuy on April 25, 2007 - 11:55pm.

Considering that Qualcomm is probably the largest employer here in SD

not even close:

Federal Government 39,100
State of California 37,100
UC, San Diego 24,790
City of San Diego 20,700
County of San Diego 18,900
Sharp HealthCare 13,872
USPS 11,611
Scripps Health 10,313
Kaiser Permanente 7,386
Qualcomm Inc. 6,000

http://sourcebook.sddt.com/2004/Listings_ListCompanies.cfm?BusinessCategory_ID=140

Submitted by sdrealtor on April 26, 2007 - 12:06am.

Ther you have it - Largest private employer in SD after goverment and non-profits.

Submitted by anxvariety on April 26, 2007 - 12:41am.

deadzone, please post more. thank you.

Submitted by Bugs on April 26, 2007 - 12:41am.

I imagine the number of 6-figure jobs being added in tech is but a drop in the bucket compared to the jobs being dumped in the RE business. There is no way is tech making up for the lost RE jobs.

Submitted by anxvariety on April 26, 2007 - 12:53am.

I know an engineer at Qualcomm.. worked there pratically in the Link-A-Bit days...

The person cashed out a cool mil.. paid cash for a $300k house in North County.. sold it 5 years later for $1+ mil, and moved up to Northwest and bought 100+ acres cash and are sitting on alot of money from Qualcomm and everything else related to how perfectly their timing was(admittedly accidental; wasn't trying to time the market or anything).

Like others said.. imagine what the hierarchy looks like with 7000 employees(does that include sub/contractors?) How hard it would be to break through not only to a level where you'd get enough options, but also how far the stock would have to breakout for it to be that significant.. now compare that to the average employee, how many people does the winner have working for him/her.

Back when I was making 80k/year, gas was $1 and single family homes were like $180k in Elsinore.. my salary hasn't quadrupled like gas, and it hasn't tripled like homes in Elsinore, I need to get outta here!

Submitted by The-Shoveler on April 26, 2007 - 6:31am.

Nor_LA-Temcu-SD-Guy

Yea I was just talking to an engineering colleague yesterday who bought a house in 2002 about the same time I did, he paid 400K I paid about 300K, we both agreed that (even though we could not even buy a condo for that now) it seemed so expensive at the time (Maybe it was).

Submitted by 4plexowner on April 26, 2007 - 7:08am.

I am an engineer at another large company here in San Diego - 4000 employees

Stock options at this company used to be pretty much automatic - each time an employee bought stock through the company's program he would receive 2 or 3 options

Now there are NO options awarded automatically with stock purchases

Also, stock options used to be given out as performance awards and that no longer happens (that I am aware of)

My point - engineers here in San Diego, in my experience, aren't pulling down the kind of bucks that some people seem to think they are

And even with a six-figure income, these engineers aren't going to prop up San Diego's real estate market - perhaps I am the only one who has noticed, but a six-figure income in San Diego is just a comfortable living wage - it isn't like $100K/year means you have money falling out of all your pockets and that you can afford an $800K POS tract home in North County

And we haven't even talked about engineers, in general, being intelligent, parsimonious people who are less likely to be sucked into the tail end of this massive real estate bubble

Anyone who thinks tech is going to save San Diego's real estate market is fooling themselves

Submitted by 4plexowner on April 26, 2007 - 7:17am.

Any other engineers care to chime in about stock options?

Is your company still granting them? Has the volume of options being granted changed?

Have your co-worker's attitude about the company's compensation plan changed? (my co-workers are feeling pretty well f'd over these days - management is receiving stock and options as bonuses and the line-level troops are lucky to get a 3% raise each year)

The original poster of this thread is saying that options being granted to engineers are a significant source of income here in San Diego - I don't see that and I'm curious if anyone else does

Submitted by anxvariety on April 26, 2007 - 7:43am.

Aren't many engineers contractors anyway? I know in software it's more and more that way...

I always thought of options as more of an incentive to account for the risk in a new company, more so than a standard reward for working at a big one.. I don't foresee many front-line workers getting much of the pie, this seems like more of an executive thing once the company is established..

Submitted by forsale_2007 on April 26, 2007 - 8:27am.

(No i don't work there anymore).
Peon engineers back in the mid 90ies started in the $40k/$50k range, and granted roughtly 1600-2000k options. Split adjusted since then that would be about 16:1.

But the latest batches of hires at tech companies are more patent layers instead of just pure geeks (they had a a tech background). I've also "heard" Broadcom in Rancho Bernardo is extremely generous, offering both option grant and actual shares. But I have not yet confirmed.
Buddies of mine are saying entry enginerds are offered roughly $80k (100k+ for phd). Mileage will vary depending on department,etc. Also, legal departments are sort of out there in pay scale. The days of the high flier stock options are over, but still we're not talking about starving engineers (at least not the ones that I've seen).
Can't say that about I.T... It's not really tech, although it gets lumped into tech.

One thing for sure, I know that defense companies pay like crap (no I'm not employed there either).

Submitted by forsale_2007 on April 26, 2007 - 8:34am.

Aren't many engineers contractors anyway? I know in software it's more and more that way...

I always thought of options as more of an incentive to account for the risk in a new company, more so than a standard reward for working at a big one.. I don't foresee many front-line workers getting much of the pie, this seems like more of an executive thing once the company is established..

 

We hire a lot of I.T. contractors to get the grunt work done. But for more things like design/prototypes/first gen stuff, we typically use internal hires. Outsourcing is no longer as cost effective. It's like $50/hr for some folks some places like Bangalore for contracting, plus you have to deal with the time differential,language issue,etc. Also, contracting work quality tends to lag in house (especially overseas). It's just cheaper to open an office there.  I.T. typically is easier to outsource/contract. Other things like high tech r&d has challenges. You can't exactly outsource designing the next broadband protocol. 

The lesson I learned is if you're planning to stay in tech, don't stay in areas considered "engineering labor". 

Submitted by CDMA ENG on April 26, 2007 - 8:37am.

So in comment to the very first post...

WHERES THE DATA...

Remember the slogan of this site.. "In God we trust... All else bring data"

Tech is back? Even with the 6 figures a lot of geeks draw these days it won't buy you a reasonable home here.

Also, QualCom is is under the gun these days. Its own (once laughed at) spread spectrum technologies are being duplicated by the EU. Its called UMTS. QCom may have some tough times in the years ahead (right now they are still doing fine).

Submitted by FormerSanDiegan on April 26, 2007 - 8:46am.

CDMA ENG - I couldn't agree more.
The original post is either hype or hope, and no substance.
Sure tech may rebound and bring some decent jobs here in the future, but there is no evidence of it yet that I have seen.(other than some pretty solid Venture capital investment in bio-tech)

Submitted by SD Realtor on April 26, 2007 - 9:06am.

I direct an engineering team for a large telecom company as well as perform real estate services. In the past few years the options have dried up mostly because of the new reporting guidelines for accounting. In years past yes many engineers did very well with stock options. Also many engineers in the field with over 8 years of experience have lots of stockpiled options however the net worth of those options may not be much if they were granted after 2000 unless they were reissued. Lots of employees at Broadcom had that happen.

What you said is pretty true 4plex. In fact at our company we do not have any annual merit increase anymore. We get a 6 month "bonus" now based on a formula that is tied into stock performance, production milestones, and design wins. In order to fund this "plan" we had no merit increase in the previous calendar year. The first payout last November was great, about 4% of our annual salary, the next payout this May will be less, about 3%. So in one year that is 7% which is great. Except we got no increase last year. The option grants have been meager at best. Also note, the base salary does NOT increase unless you get a promotion now.

SD Realtor

Submitted by blahblahblah on April 26, 2007 - 9:07am.

Federal Government 39,100
State of California 37,100
UC, San Diego 24,790
City of San Diego 20,700
County of San Diego 18,900
Sharp HealthCare 13,872
USPS 11,611
Scripps Health 10,313
Kaiser Permanente 7,386
Qualcomm Inc. 6,000

Looks like a socialist paradise. 9 of the top 10 employers here in SD make payroll either directly with your tax dollars or indirectly through government subsidies and insurance. Also note that only one of the top ten employers actually produces anything other than services.

Submitted by The-Shoveler on April 26, 2007 - 9:32am.

Nor_LA-Temcu-SD-Guy

One last point is engineers are practical types, ie.. if you gave one a million dollar bonus, they will more than likely buy a modest home and stick the rest in the bank or retirement account.

Submitted by 4plexowner on April 26, 2007 - 9:34am.

And continue to drive the 10 year old car, etc - we engineers are a practical lot ...

Submitted by an on April 26, 2007 - 9:46am.

I totally agree with a lot of the post regarding how tech is not going to save housing. To the OP who mentioned QCOM, remember that QCOM is still no where near its 52 week high. So engineers at QCOM who got options last year, their options are now still under water. I work at a large telecom company as a software engineer and I can attest to the lack of options & pay raise. You'll be happy if you get a 3-4% pay raise. I also agree with Nor_LA-Temcu-SD-Guy that engineers are practical types. We tend to be more conservative with our money in regards to housing. Buying tech toys is a whole different issue :-).

Submitted by surveyor on April 26, 2007 - 9:50am.

engineer spouses

while engineers may be frugal, their spouses may not be. my wife would always tell me about how a few engineers would be always asking for promotions and raises so that they could fund their spouse's excess (usually because they were second wives).

Submitted by masayako on April 26, 2007 - 10:45am.

surveyor,

I will have to say this is just another urban legend unless you have data to prove it? Or, is it a joke I don't get? :)

Submitted by Critter on April 26, 2007 - 10:52am.

This may sound strange, but one of the worst ways to justify asking for a raise is because you (or your wife) needs the money.

Raises should be granted because your work is stellar enough to warrant a wage hike. No one cares what you owe (similar to sellers who want to sell their homes for what they owe plus expenses, regardless of what the market will bear).

Submitted by masayako on April 26, 2007 - 10:54am.

Another sad thing for tech. employees is that good company earning doesn't equal more cash in their pockets.

3-4% merit increase on average don't get you climb that housing ladder any easier.

Submitted by kewp on April 26, 2007 - 11:02am.

Hey, once I cash out the options from my gig at Google San Diego, I'll buy a sweet pad in the ghetto for a half-mil. So will my other 10k co-workers. No housing crash here!

What a bunch of bull!

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