That Silicon Valley housing is very expensive is no surprise to anyone who is paying attention.

Fueled by a bullish tech market for the better part of a decade, with inventory dramatically constrained, each new home entering the market can be flooded with aspiring buyers who are eager to pony up millions of dollars for uninspiring homes, with the desirable promise of reduced commute times to big tech companies or startups, or access to high quality schools.

As a homeowner who bought our place in 2010, I could be doing victory laps about perceived value increases each time I view Zillow or Redfin to see how our long-term investment is doing, but the harsh reality is that the daunting financial demand needed just to find a place to live is having a dramatic impact - not just on the Bay Area as a region, but in markets far from our tech epicenter.

Prices in secondary markets outside the Bay Area are skyrocketing as distressed Californians seek alternatives. Working class families are being priced out of the most desirable cities, forced to endure hours of commute times from far-flung outlying towns, or losing their homes outright. Some small businesses are closing because they can't afford the lease, or can't find enough help to keep their business running. Help wanted ads for service workers are visible practically everywhere, and few answers are clear, aside from pushing for more housing, which in itself finds opposition from the slow to no growth community.

While much of the world isn't all that sympathetic to the concerns of a relatively well-off Bay Area population that is home to some of the most successful tech companies on the planet, there's a clear and increasing separation of the exceptionally comfortable (read: rich) group, and those being squeezed by a higher cost of living that is rapidly outpacing any kind of increase in income.

As I wrote just over a year ago (See: DINKs vs SITKOMs and Other Family Finance Disasters), Bay Area housing costs are putting incredible pressure on families who haven't been lucky enough to partake in an IPO or acquisition (or two). Neighborhoods that seem average can be shockingly full of homes valued well over a million dollars, putting mortgages well out of reach, and rents continue to skyrocket. For those who already own a home, this can be a great source of comfort, but for those on the outside looking in, the circumstances aren't getting any better.

When it comes to socking away money for retirement, practically nothing beats being a DINK. A married couple without any children, and both parents working, is often referred to by this acronym, representing the Double Income, No Kids. Sometimes the DINK acronym is followed with a lower case "y", as in "yet". No kids, yet, so now's the time to take that extra vacation or save money, because trust me, you'll need it.

Some couples blissfully stay in this stage for their duration - happy for both partners to be significant wage earners, and not adding on any expenses disguised as smiling children. But others don't, which often leads to the inevitable decision of how quickly either parent returns to the workforce, if at all. Some parents, usually the mother, take reduced career roles or part-time jobs, to augment the child raising, and others try to make do with the primary wage earner's income, knowing it will be a little bit tighter around the house, but by gum, generations previous have made it work, so why can't we?

This is the lesser known and obviously much less healthy option of being SICK, "Single Income, Couple Kids". With income decreased, approximately by half, and expenses up, the flexibility in finance is decimated. Junior needs new clothes, or to eat regularly, or to attend classes, or maybe he needs braces. And the second member of the couple still likes shopping.


Living in Silicon Valley as I do, there's plenty of great opportunities for hard working people to find incredible jobs with incomes often the envy of other parts of the country and world. Often, however, the expenses rise to match - especially when it comes to the base living expense of owning a home. Time and again, I've seen happy couples start to fret as they outsize their small apartment, and their family prices themselves out of the Bay Area, as they retreat to cheaper places, be it Texas, Utah, Oregon or Tennessee.

Still others try to ignore the oppressive costs of ownership and enter into the "sounds funny but isn't really funny" reality of what's known as a SITKOM. As it was explained to me by a coworker, that's where you have a Single Income, Two or Three Kids, with an Outrageous Mortgage. That's a sitcom with a laugh track, but it's at you. You can work yourself crazy and never see those kids, you can have an equity event that makes your living comfortable, or you can leave, essentially. Those are your options.


Consider, for example, the current bubble that's happening in Bay Area housing. My wife and I bought our home in Sunnyvale, which is pretty mid-level on the Peninsula, priced a tad higher than Santa Clara and the East Bay, for example, but trailing the ritzy Palo Alto, Los Altos and San Carlos for housing prices. In 2010, seeing prices fall from their 2007 highs to about 90% of peak, we bought at what I saw as 90 cents on the dollar, getting ourselves a 4 bedroom home with room for ourselves and our soon to be three kids. In the ensuing three years, with an economic recovery, a nearby Facebook IPO, and continued growth for area jobs, our home is now priced greater than 30% ahead of where I bought it. I certainly couldn't afford to live where I live now if I were looking, if that made any sense.

Editor's Note: Trust me, I'm glad it's gone up. So don't get me wrong.

Taking the abstracts out, the median price for a 3 bedroom home with just over 1,500 square feet in the area is approximately $1 million. With interest rates around 3.75% to 4%, and property tax to match with about $12k a year, you can pretty easily see your expenditures, on the home alone, being upwards of $5,000 or more out of pocket every single month. And that's before you turn the lights on for electricity, get water going, ask for garbage pickup service, add TV or Internet and put a single spoonful of food into your growing kids' mouths. So if you're taking home $60k a year after taxes, you have to be making about $90k just to cover that cost, with no additional headroom. It takes a salary of significantly more, along with perks like stock options that have real value, to be able to keep above water each month.


Exciting math, right? That's part of why you're seeing stories about developers piling into bunkbeds at hacker lofts in  San Francisco, and others are saying it takes an equity event (or two) for an entrepreneur to even afford to stay here.

That hair-thinning worry and the corresponding rise in home value, as well as the knowledge that prices could eventually reverse themselves (as things that go up often come down), has me occasionally putting out ideas. For example, if our home sold for the price Zillow lists it, and most homes do, or even higher, I could pay off our mortgage in full, and with the resulting cash, I could buy a equivalent home elsewhere in the country and fully pay off four years of college for all three of my children without any issue. As a parent who wants to make sure my kids are taken care of, and one who wouldn't mind taking expenses down, it's a fun logic test, if nothing else.

Unfortunately, the buy low and sell high mentality one brings to the stock market, where you can trade a stock you bought earlier in the day or week, doesn't really apply to physical goods and livelihoods like a home. You can't just opt out of the housing bubble for a month, wait for prices to cool as you park in a hotel, and then buy back your home at 20% off. If you could time that, you'd be a magician.

So that drives SICKies like me to think of even more aggressive ways to make change. Can the spouse get a job that more than pays for inevitable daycare and doesn't saddle us both with compounding damage to lost face to face time with the kids? Is playing the lottery or PowerBall when it hits record highs a solid investment? Can I augment my income by playing professional poker if I watch enough Hold 'Em on late night ESPN? Or should I just put everything I have on the next tech IPO and ride their coattails?

Don't get me wrong. I love Silicon Valley and there's really no other environment like it - where so many people obsessed with tech and changing the world through innovation reside in one place, and where so many of them refuse to take no for an answer. But as someone who was working here through the first dotcom boom and crash, and has seen recessions since, I hardly want to see the tide turn the other way and find those of us who have been taking the extra step to expand a family and keep a solid job going are on the wrong side of the ledger.

Prices are going up, and it could come to a point where you need to command two incredibly high paying jobs and an equity event even to survive. It could be an odd phase of the inner city in reverse, with the less privileged fleeing to the outskirts and commuting in to work with those who've already hit it big. That'd be SICK.

In the last decade-plus, the SEC and other agencies have pushed to bring more transparency to potential investors, who traditionally have had much less access to companies and information than Wall Street insiders. From protective rules such as the Sarbanes-Oxley act, to the public posting of SEC documents online, investors can get a much broader picture than they could not so long ago. But if you're not a Wall Street Insider, it's unlikely you've sat down face to face with the company CEO and CFO and heard them tell you just why they are the best place to put your money. For the last five years or so, I've had RetailRoadshow in my RSS feeds, and get the opportunity to see them pitch, unfiltered.

With interesting Tech or Web companies like Zillow, LivingSocial, Groupon, and others trying their hand at public markets and others like LinkedIn and Tesla Motors having done so in the last year-plus, now's as good a time as any to keep RetailRoadshow bookmarked.


For such a vital service, RetailRoadshow is surprisingly quiet. Their Twitter account hasn't posted since April 2010, only having done so 29 times. If they've got a Facebook page, I don't know about it. But their RSS feed works and their bare bones site works. What the site lacks in visibility it makes up for in unfiltered information. You get the same data as the insiders, as the company's chief executives speak to you - uninterrupted by questions, with the company's prepared deck scrolling alongside. You even hear the mouse clicks as the exec hits the next slide.


Watching presentations such as that from Zillow, LinkedIn, 3Par, FriendFinder and others in the past makes the process of bringing a company public look a lot simpler than it is, of course. Many of the execs don't have top-notch speaking skills, and often, their slides look like they need some retouching by a design guru. The hardest part of the process, typically, is getting the company to the point where they could file anyway, even if you think some of the companies looking to go public really aren't ready, or got their amazingly fast.

As someone who watches the markets like this, I really have just two browser cheats to keep on top of the process - the first being filings at the SEC that contain "S-1" in the title, and the second being RetailRoadshow. But if you do find a company whose pitch you want to see, go fast, because they don't stay live for long.

Many people look to Zillow for third party estimates of property values, whether homes are on the market or not. One can turn to Zillow to gain property information on homes, including home features, property tax data, and previous sales. The more data-hungry or curious may even watch their own homes or target properties to see fluctuations, due to a number of factors, and get a good idea of whether homes' prices are rising or declining.

Two weeks ago, the company recalibrated its systems, and has pretty much thrown all previous years' data out the window, replacing it with new histories. So if you were using the site to get a good picture of your neighborhood, they're hoping you'll ignore what you already know and start fresh.

Coming up on the one year mark in our home which we purchased last summer, I've kept an eye on the surrounding market, both on Zillow and Redfin, to not only watch our own home's data, but seeing new sales come and go. In an economy which is by no means perfect, the weekly data coming from Zillow from its frequent "Zestimates", and tagged on my weekly Mint.com emails was pretty bad all Spring. My email archive shows eight separate consecutive downward revisions of our own home value, shaving off sixty thousand dollars in equity. While I have no intention of moving again any time soon, it was hardly reassuring.


I even complained about the continued drops and negative feedback I saw through Zillow on one of my less-trafficked Twitter accounts, citing the $67k drop of almost 10 percent in just under three months.


But on June 13th, Zillow wiped the slate clean and the year's data doesn't show such a steep decline after all, showing a comparatively straight line with a near-static value and a minimum of variance. Instead of a sharp downfall I had assumed was true this Spring, the gap between highest Zestimate and lowest is only about $20k, less than a third of the bloodbath I was seeing.

Pricing one's home for sale or financing is a delicate one, a dance of recent area sales, market trends, and all manner of comparables. But Zillow's move has me questioning not just our own home's value, and the year's graph, but all estimates I bump into, and of course, their own projections for values in years' past.

In an FAQ on Zillow's site related to "Zestimate Improvements", they mention that you "Possibly" could see changes in history, thanks to algorithm edits going back to 2006, arguing for improved "current accuracy" and "historical accuracy" - adding "We are now working on re-doing all the history."


It's likely they know what they are doing, and with more data, they were losing confidence in both their current and historical values. But it sure didn't seem like the company was unsure about its competence before the move, and I'm not sure they're confident about their current data any more.

    
    
    

As with my top gadgets list for 2010, this year's list is personal. It's what I use, and what I found had the most impact for me in 2010, which I found myself using every day. The services themselves are limited to being Web-based, so I am not talking about those which are primarily iOS or Android apps, but if they do have a mobile equivalent it helps. What I've found in the way I use the many Web services and sites that take my time is that I may find things first, and I don't always enjoy those which are most popular, but once I do find real value, I am as loyal as they come.

That said, here are the sites that had significant impact on me and my family in 2010. Your mileage may vary.

1) Redfin

2010 saw the arrival of baby #3 in our family. Braden, who joined us in late August, made his potential known at the beginning of the year, and this forced us to start planning a process to move up and out of our condo. With Bay Area housing prices a volatile, yet always expensive, thing, we had to use the best resources available to help navigate the housing search.

Without any hesitation, I can say Redfin saved us. We set the required criteria for potential homes to fit our growing brood, and started getting alerts in the Spring as we set favorites, getting to learn the trends in each sale and seeing the macroeconomics of the market in a microscope. Needless to say, if a home wasn't listed on Redfin.com, we didn't find it, and it's their loss. Even after buying our home in July and moving across town, I frequently use it to follow home sales in the area, and keep sure that we got the best deal for the best place we could afford.

Redfin quite possibly saved us hundreds to a thousand or more a month, or could even have meant another bedroom afforded or a shorter commute. The value is unmistakable.

2) Mint.com

Planning for both the sale of our condo and purchase of our home simultaneously, while navigating the growth of Paladin and transition to my6sense this year, has required an eagle eye into our finances, seeing how our spending has trended, up and down, and managing money flow. Mint.com has become an essential stop for keeping tabs on our home value, 401k status, bank and credit accounts to show us whether we broke even each month, or if we didn't, what the root causes were.

Planning ahead and our focus on the specifics led to our loan operators' excitement when they found we actually had already paid the 20% down on our new home, and I heavily leveraged Mint.com to balance the process, even as we had to close our purchase before the sale of our condo had closed. Doing it without Mint.com would have been a complete pain.

3) Google Reader

Even with the rise of real-time news, Google Reader's ability to catch all my RSS subscriptions in one place is unmatched. Though I have actively scaled back some of the busier or more redundant sites of late to get more time back, Reader is a cornerstone for my information consumption. It, of course, is also a major player in feeding my6sense. That I had encouraged comments and sharing of content from my Google Reader shares led to an easy transition to Google Buzz when it arrived earlier this year as well.

4) Spotify

Thanks to early tech blogger access, I have enjoyed the mainlining of music Spotify has offered for the entirety of 2010, and I've been enjoying Spotify for about 16 months by this point, without the service making US support official. Spotify is practically a music nirvana, with all the best stuff just a search away, on my Mac, our iPads or any of my Android devices. The tie-in with Sonos doubles down on the brilliance as well, delivering all the world's music anywhere in my house. For anybody in love with Last.fm, Pandora, Napster, Rhapsody, Rdio or the rest, Spotify is like getting called up to the big leagues from the minors. Practically the only time I ever visit iTunes now is to download application updates for our iPads.

When I hear new albums from my favorite artists have debuted, I don't go to Amazon.com like I once did, or iTunes. I just go to Spotify, and it seems they are always there. The fact I can call up any song and choose any point in that song and never suffer buffering or sound quality issues is seemingly magic.

5) Twitter

Twitter became even more useful in 2010 than in early years after I dramatically scaled back who I followed, set up customized lists, and gained the ability to sort the service's many updates by relevance, or show only those with links, in my6sense. Removing the link-free updates from Twitter practically put the service on the same pedestal as Google Reader RSS. On the desktop, I continue to use Tweetie for Mac, with its integrated multi-account support, tracking Paladin clients and my6sense, including keyword searches, @replies and any other discussions that could flare at any time.

To use Twitter in isolation from the rest of the Web would starve you of oxygen. But at this point, using the rest of the Web and avoiding Twitter could be similarly bad. News breaks on Twitter and your brand and products can win or lose 140 characters at a time.

6) OneTrueFan

I am gaga over OneTrueFan, not because of the gamesmanship, or even due to its top news feature just launched, but instead due to the potential for discovery from peers of mine to new sites and sources for news. OneTrueFan helps me find out where established folks who I respect are getting their news, or what services they find critical. OneTrueFan manages to be incredibly useful while also being fun. When on the desktop, I use OneTrueFan's browser bar to share articles to Twitter and Facebook, knowing I'll be rewarded for bringing new readers to the story, and to see just how effective my shares were - much like Bit.ly analytics for the entire Web.

This is the second go-round for this team, who spawned and sold MyBlogLog to Yahoo! years ago, who promptly put it through their "How to Botch an Acquisition 101" course. The band is back together and you should wait for some sweet sweet music as they build a horizontal social network that spans all the sites you visit.

7) Google Buzz

For a long-time FriendFeed devotee, the debut of Google Buzz earlier this year, delivering smart aggregation by a company promising to support it, was like manna from heaven. Pad on linking with Google Reader shares, and you could see serious potential. I wasn't as big a fan of it being locked down into a Gmail experience, but believed in its open standards pedigree and corporate promises for fast innovation. I also was one of the few who heard their caution about not taking Facebook and Twitter head-on, but looking to foster a community within Gmail.

Public bumps stalled the service's potential growth out of the gate, and while I enjoy the community a great deal there, and visit every day, it is not as big as it could be, never having launched a dedicated site, where I would spend much more time, and quietly working on its innovations, not making good news when it was available. Without having any detailed insight, I think it is safe to assume that Buzz and the Buzz experience will play a strong role in whatever Google's future social plans for 2011 will be.

8) Blippy

Speaking of amazing services with public privacy bumps that didn't get the press eating out of their hand, Blippy has evolved to play a much bigger role in my online experience than I had first anticipated. Blippy in my mind is the next step after you've first told us you "like" something, and then "checked in" on Foursquare. Blippy shows you what you did when you got there, with your own money. The company is making a real product graph to help connect consumers and bring intelligent reviews to your purchase streams.

Blippy now has pulled in about $100 million in purchases through its site. That's a good chunk of consumer data. Aren't you intrigued by what brands would want to know about these folks? Don't you want to know how Blippy will leverage this gold mine? I do.

9) Zillow

The companion piece to Redfin, Zillow helps provide value estimates for homes practically anywhere - even if they are not on the market, with trends showing if the prices are rising, falling or stable, with 1 year and 5 year histories being especially useful. As someone who just bought a home, I get a lot of fun out of keeping Zillow open on my phone as we walk the kids around the neighborhood to get an idea of the homes we are passing, and their history, or simply getting incremental updates to see if the value of our home has increased since we bought it five months ago. (It has)

10) IceRocket

Yes, Icerocket. Icerocket is the best blog search and Twitter search tool on the planet, period. That you're not using it every day means you haven't figured out why you should. I check IceRocket to watch for mentions of my activity and content in Facebook, Twitter, Blogs, Video and Photo sites daily, as well as those for companies I interact with.

Missing the Buzz? Check out http://louisgray.icerocket.com/ to see what IceRocket has on me or http://my6sense.icerocket.com/ for my6sense, for example. Technorati has changed its focus. Google Blog Search seems neglected at best. IceRocket may not have the brand pizazz, but it's the best.

So who didn't I mention? Quora? Quora's cool, and maybe in 2011, it will play a bigger role, but it hasn't yet made a major impact for me in how I use the Web. Foursquare? That's a mobile experience for me. In June, I wrote up 50 startups worth watching, and that included many of these as well as others. So for a broader scope of companies I am seeing, that's not bad (from 6 months ago). Why isn't Facebook here and Twitter is? Good question. I do use Facebook a lot, but that's like telling the world I use e-mail. Duh. I didn't feel a need to tell you I use Blogger either. That's obvious. So where are you spending the most time, and am I crazy to put sites like Blippy, IceRocket and OneTrueFan so high?

A truly brilliant Web service is one that impacts your life offline, and can change your life for the better. While there are many different Web sites considered must-visits practically every day, there are other vertical apps which can be especially important for a brief period of your life - such as those, for example, based around health issues, graduate test prep, or prenatal planning. In our home in the last few months, in companion with Mint.com, no single service has been more important, nor more heavily utilized and debated, than Redfin.com (and its associated iPhone app). As we anticipate our third child in a few months, we've known we need to move to a bigger place, and we have done almost all our research and comparisons through Redfin. Essentially, if the activity isn't displayed on Redfin, we assume it doesn't exist.

While there are no doubt many different real estate search sites on the Web, Redfin came well recommended by peers, and in my own comparisons, I often found that Redfin data was more recent and more accurate than others, such as Zillow.com, despite the fact that both services (and many others) pull from the same sources.


As a family looking to get a better home, but not being uber-rich, which would come in handy here in the high-priced Bay Area, my wife and I had to determine several things, including those factors which we determined were important to us, including location, size of the home, number of bedrooms, the type of backyard, size of the yard, and quality of nearby schools. Meanwhile, as I played with Excel to try and figure out just how much we could afford, I started dabbling with Redfin to find potential homes and stow them away in my favorites.


This dabbling soon became a full-time hobby. For the last three months, I've scoured the Peninsula for homes that made sense for us. If I thought they were a candidate, I hit favorite. I could sort by price, sort by the size of the home, eliminate those that didn't meet criteria, and find which ones had upcoming open houses. Meanwhile, Redin.com has been sending me updates by e-mail overnight to catch me up in case prices change, those on my watchlist saw sales pending, or if open houses were planned or canceled.



Redfin has become my hub for the entire search, and has been so effective that my wife and I haven't looked anywhere else. Every home we have looked at, we previously previewed on Redfin and had the specs memorized before we went through the front door. And after every visit, we went back to Redfin to make changes to our list.


Knock on wood, this search looks to be soon coming to an end, hopefully. As my wife's not getting any less pregnant, and the buyer of our condo is entering the homestretch on his approvals and paperwork, I hope we start planning the moving phase, and dealing with that major headache.

Redfin.com is not available in all areas, focusing on a number of select metropolitan areas - which, obviously, the San Francisco Bay Area is one. As somebody who prefers to leverage the Web for practically everything I possibly can, it's been awesome to have a strong silent partner like Redfin.com doing all the hard work of looking around for me and letting me know exactly how much I would have to pay each month, or in property taxes, or even how the price of potential homes has changed over the last few years. I love playing with data, and Redfin has a ton of it. If you are thinking of moving or selling your place, and Redfin.com is in your area, I can't see why you would go it alone.