“Is this a bubble?” will be the topic of the summer with our clients.
Mary Meeker of Kleiner Perkins dismissed talk of an Internet bubble in her closely-watched annual report on Internet trends last week. The New York Times dubbed Meeker’s report “a sort of farmer’s almanac for the tech industry.”
The upshot: today’s bubble is not as crazy as the 2000 Dot Com Bubble. Total tech IPOs, tech IPO volume, number of tech companies raising money, and total venture money raised by tech startups are all down 50% t0 87% from 2000. Furthermore, the NASDAQ is 18% below the 2000 peak. As TechCrunch put it, “That means we’re not tempting a crash the way Pets.com did.”
Now, our real estate market does not follow the tech market in lock step. There are other factors in play in our real estate market, like Chinese buyers. China’s GDP is growing faster than any region in the world, Meeker notes. China now represents 16% of the global GDP, which equals Europe. The US share of global GDP is 19% — and falling. The Chinese economy is a major global force, and Peninsula real estate is a very attractive investment option for Chinese investors.
REFERENCES:
New York Times, “State of the Internet: Still Growing But More Mobile Than Ever”
Read the full Internet Trends 2014 report
