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A construction worker installs a window in San Mateo, California. He needs to build a lot more homes in Southern California in order to get the market back to normal.
DataQuick released data on October Southern California home sales Tuesday, and while the news looks superficially good — sales are up, prices are rising, foreclosures are down — the market remains distorted.
There are three factors that should make prospective homebuyers wary:
- There's a shortage of housing supply in Southern California, creating a bubble, with demand outstripping existing inventory and pushing up prices. Few new houses have been built in the region the past four years.
- Money is cheap. Mortgage interest rates are at historic lows. Combined with prices that were depressed by the bursting of the big housing bubble four years ago, this is drawing buyers into the market and convincing sellers that now is the right time to put homes on the market.
- Investors are major players in the market.
The enterprise social network would do anything to avoid an IPO. And then along came Microsoft...
Yammer, based in San Francisco, is basically Twitter for business — although in the two roughly years since I regularly used it, it's evidently added some Facebook-esque features. It's been at the vanguard of "enterprise social networking," or bringing microblogging and social networking into the business environment. With the consumer space tapped out, this is where a lot of companies are looking to expand.
Or, in Microsoft's case, acquire. Just for perspective, $1.2 billion is FAT valuation for Yammer. Remember Instagram, the year-and-half old photo sharing site with 13 employees that Facebook bought on the eve of its IPO for $1 billion? Yeah, that seems so long ago now...
Yammer sold for a little more than one "Instagram," in the new parlance of Silicon Valley. But more importantly, Microsoft bought the company for all cash. Instagram, by contrast, was a cash-and-stock deal, mostly stock. So Yammer's investors, who had put about $150 million into the startup, are going to see a very large payday, composed of actual money that they can use to either buy a second yacht or turn around and pour into other startup investments.
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Are apps where the jobs are? Maybe not.
A couple of people called my attention to this report from TechNet, on the apparent jobs boom in the so-called "app economy." Here's Slate's Matt Yglesias, who considers it a positive trend — with a future:
[TechNet economist Michael Mandel's] basic point is an extremely sound one. As I've argued before, doing the same old thing but doing it with a smartphone ap is a huge part of the future of innovation in America. A little processor power plus constant internet connectivity plus location services plus a camera has incredibly broad applications for all kinds of everyday service delivery and this, rather than building devices, is where the big economic impact comes in.
Apple might disagree with this, given its recent, iPhone-fueled financial results. You could certainly argue that there was no app economy — and none of the 466,000 jobs created by it since 2007, according to TechNet — without the Apple App Store. Which came first? The App platform, in the iPhone. Build it and they will come.