House Prices Drop Again in San Francisco and Silicon Valley(wolfstreet.com)
wolfstreet.com
House Prices Drop Again in San Francisco and Silicon Valley
https://wolfstreet.com/2019/08/15/housing-bubble-2-in-san-francisco-bay-area-silicon-valley-is-cooked/
143 comments
Starting your own thing in your garage is one thing, but we have a much bigger problem, in that service industry workers simply can't afford to live within a reasonable distance of this area, so there's a shortage of that form of labor, despite paying well over minimum wage.
Local stores, bakeries and restaurants, are closing down at a fast rate. I've been living here for a long time, and I'm sad to see small businesses being displaced by upscale chains. Downtowns areas which used to be a mix of small businesses and restaurants, are turning into chains of upscale restaurants and shops that are out of my price range (mid range tech worker)
We're going to find out what an industry town looks like when all industries but one or two are priced out, and the initial indications aren't very nice.
Local stores, bakeries and restaurants, are closing down at a fast rate. I've been living here for a long time, and I'm sad to see small businesses being displaced by upscale chains. Downtowns areas which used to be a mix of small businesses and restaurants, are turning into chains of upscale restaurants and shops that are out of my price range (mid range tech worker)
We're going to find out what an industry town looks like when all industries but one or two are priced out, and the initial indications aren't very nice.
I don't know why SF is so popular. It smells bad and is always cold.
Atlanta, for instance, has way more culture (rap, hip hop, country, hollywood) and diversity (of race, wealth, background, career, etc). The food scene is phenomenal - I follow people on Instagram to find out where the trendiest midnight pop-ups are. Music is everywhere. Art permeates. It's about as far from a monoculture as you can imagine.
I own a huge home in the city and pay less on my mortgage than people in SF pay for rent. It's a cool hipster place too - 1800s cotton mill with 20 foot ceilings. A couple of my coworkers have fairly large machine shops in their homes. Space is practically unlimited here.
Food is cheap, rent is cheap, but the experience and lifestyle exceeds expectation.
I work for a tech company and make the same wages y'all do.
The only thing that sucks here is transit, but I live on the Beltline and walk/bike everywhere, so it's not so much a problem for me.
I feel like tech needs an exodus from SF. A lot of the money for innovation is just being handed over to landlords.
Atlanta, for instance, has way more culture (rap, hip hop, country, hollywood) and diversity (of race, wealth, background, career, etc). The food scene is phenomenal - I follow people on Instagram to find out where the trendiest midnight pop-ups are. Music is everywhere. Art permeates. It's about as far from a monoculture as you can imagine.
I own a huge home in the city and pay less on my mortgage than people in SF pay for rent. It's a cool hipster place too - 1800s cotton mill with 20 foot ceilings. A couple of my coworkers have fairly large machine shops in their homes. Space is practically unlimited here.
Food is cheap, rent is cheap, but the experience and lifestyle exceeds expectation.
I work for a tech company and make the same wages y'all do.
The only thing that sucks here is transit, but I live on the Beltline and walk/bike everywhere, so it's not so much a problem for me.
I feel like tech needs an exodus from SF. A lot of the money for innovation is just being handed over to landlords.
As someone who lives just down the street from you in Grant Park... uh, please shut up. The talking point should be: the heat in Atlanta is terrible, the traffic is terrible, it's miserable here, please don't move here and make it worse.
In all seriousness though, I agree with you on all points except the weather. What I fear is that the word gets out even more than it already has and we ruin a good thing. The Beltline is a transformational project and I've been rooting for it since the beginning, but lately, with all the growth, I'm starting to get a little concerned that the infrastructure really isn't in place to handle what's coming.
In all seriousness though, I agree with you on all points except the weather. What I fear is that the word gets out even more than it already has and we ruin a good thing. The Beltline is a transformational project and I've been rooting for it since the beginning, but lately, with all the growth, I'm starting to get a little concerned that the infrastructure really isn't in place to handle what's coming.
Interesting, lots of people say the exact same things about Portland. I would guess every booming city is facing this dilemma.
yes, the locals just blame it on procedurally generated things which are totally hotswappable with the things people in another city blame. "I'm mad at those people with money (but would buy here at market rate if I could afford it)"
Marginally fascinating.
The irony being that if you get to travel enough to notice this, you are practically already exempt and privileged in some way.
Marginally fascinating.
The irony being that if you get to travel enough to notice this, you are practically already exempt and privileged in some way.
SF is popular because the weather is incredible. The bay area has cultural diversity beyond what most cities aside from New York can offer.
If you can afford it, SF is a wonderful place but it does have problems big cities with large homeless populations have.
When you say "I work for a tech company and make same wages y'all do", I'd be interested in what that number is.
edit: To clarify on wages, I'm not trying to have a pissing contest. I'm curious what you consider wages that are same as SF. Frankly, I wouldn't stay here if I didn't make what I make but I also know you won't make the same in most tech companies. I'd leave if compensation was sub $200k.
If you can afford it, SF is a wonderful place but it does have problems big cities with large homeless populations have.
When you say "I work for a tech company and make same wages y'all do", I'd be interested in what that number is.
edit: To clarify on wages, I'm not trying to have a pissing contest. I'm curious what you consider wages that are same as SF. Frankly, I wouldn't stay here if I didn't make what I make but I also know you won't make the same in most tech companies. I'd leave if compensation was sub $200k.
> The bay area has cultural diversity beyond what most cities aside from New York can offer
Wat. I specifically think SF is the opposite of diversity. Far left ideology is the norm, with no room for dissent... and racially, it's just whites and asians. If that's your idea of diversity, no thank you. Places like Atlanta, Houston, and Tampa are much more diverse.
Wat. I specifically think SF is the opposite of diversity. Far left ideology is the norm, with no room for dissent... and racially, it's just whites and asians. If that's your idea of diversity, no thank you. Places like Atlanta, Houston, and Tampa are much more diverse.
[speaks in fry register]
"You're, like, a literrrrrrallll Notzeeeee..." /s
"You're, like, a literrrrrrallll Notzeeeee..." /s
> SF is popular because the weather is incredible.
You mean hazy and dry?
> The bay area has cultural diversity beyond what most cities aside from New York can offer.
But then...
> Frankly, I wouldn't stay here if I didn't make what I make but I also know you won't make the same in most tech companies. I'd leave if compensation was sub $200k.
How much cultural diversity is there really if daily existence is a constant struggle for anyone making less than $200k?
You mean hazy and dry?
> The bay area has cultural diversity beyond what most cities aside from New York can offer.
But then...
> Frankly, I wouldn't stay here if I didn't make what I make but I also know you won't make the same in most tech companies. I'd leave if compensation was sub $200k.
How much cultural diversity is there really if daily existence is a constant struggle for anyone making less than $200k?
There isn’t. Unless he meant engineers from other countries.
> but it does have problems big cities with large homeless populations have.
NYC and Chicago do not seem to have the vast homeless issues that SF does.
NYC and Chicago do not seem to have the vast homeless issues that SF does.
The contemporary homeless problem is vast, growing and almost exclusively along the West coast where climate permits year-round outdoor living.
They also have winter and humidity. The Bay Area climate is so average it’s a perfectly place to live outside. Try sleeping on a street in December in New York or Chicago. Similarly San Diego and Seattle have homeless populations.
> SF is popular because the weather is incredible.
The weather is polarizing, to say the least. Some of us like feeling change, as in through seasons. I fucking hate feeling cold in August. There's about three good weeks of warmth in the year and the rest of the year you need layers.
The weather is polarizing, to say the least. Some of us like feeling change, as in through seasons. I fucking hate feeling cold in August. There's about three good weeks of warmth in the year and the rest of the year you need layers.
I grew up in the Midwest and spent half a decade between Texas and Georgia. Some of us are also sick of the hot summer heat. And I say that as someone who lives in the Santa Ana foothills in Orange county (it's regularly flirting with 100 degrees in my backyard during the peak of summer -- at least it's dry).
> SF is popular because the weather is incredible
Well.. it's more like the weather is constant. It's always foggy, with random periods where the "marine layer" is not present.
However, drive 30 minutes and you can get away from the annoying fog.
Well.. it's more like the weather is constant. It's always foggy, with random periods where the "marine layer" is not present.
However, drive 30 minutes and you can get away from the annoying fog.
Or walk to SoMA or the mission or potrero hill or any other neighborhood east of the fog line.
Mission bay is fog free as well.
I get the appeal of the Bay area if you don't have to drive far. And I get the appeal of San Francisco if you never have to venture out of Pacific Heights and The Presidio so to speak.
But damn, the sheer number of homeless people pooping on the streets is dystopic. And I've been all over the world. The garbage on the streets of New York City smells better. The tent cities all over the mission blow my mind. I used to really want to live there but when I go up there these days it's only because I have to be there.
But damn, the sheer number of homeless people pooping on the streets is dystopic. And I've been all over the world. The garbage on the streets of New York City smells better. The tent cities all over the mission blow my mind. I used to really want to live there but when I go up there these days it's only because I have to be there.
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> SF is popular because the weather is incredible
If you like cold summers and fog over much of the city... Otherwise you'd likely prefer the weather in the peninsula, which is sunny and warm almost every summer day. In fact Redwood City's slogan is "Climate Best by Government Test", heh. But SF gets surprisingly cold even in the middle of summer.
If you like cold summers and fog over much of the city... Otherwise you'd likely prefer the weather in the peninsula, which is sunny and warm almost every summer day. In fact Redwood City's slogan is "Climate Best by Government Test", heh. But SF gets surprisingly cold even in the middle of summer.
> If you like cold summers and fog over much of the city... Otherwise you'd likely prefer the weather in the peninsula, which is sunny and warm almost every summer day.
Why do people assume everyone wants nothing but sun sun sun? It's so boring. I like a bit of cold, fog, and rain.
Why do people assume everyone wants nothing but sun sun sun? It's so boring. I like a bit of cold, fog, and rain.
Then Seattle is a much nicer city if that’s what one is after
Only half the city gets that much fog. Sunset/Richmond side of things. We've had fog maybe 5 days this year in Noe.
Many of us do!
Tech isn’t a constant pie. For Atlanta to grow, SF doesn’t need an exodus. In fact, the destruction of SF’s tech scene will be a giant blow to North America’s tech sector for a generation. The forced de-agglomeration of tech cities is not an experiment China or India are running.
If you want Atlanta to grow, pray SF (and New York, and LA and Vancouver and Toronto) fix it’s real-estate problems.
If you want Atlanta to grow, pray SF (and New York, and LA and Vancouver and Toronto) fix it’s real-estate problems.
>Tech isn’t a constant pie.
Is that why it makes wierd spirals?
Is that why it makes wierd spirals?
Several Asian people I know who moved to the Bay Area seemed to be traumatized by the racism they faced growing up in the South. Don't know if it is different now.
Parts of SF do smell but most of it and most of the Bay Area don't. Likewise, part of the Bay Area is foggy but I would say 80% of the Bay Area isn't.
There is definitely a growing monoculture here. Not sure Atlanta doesn't though. If you look deep enough most places do in at least one aspect.
Traffic is bad most places in the Bay Area though. Prices are high for many things beyond housing.
I think tech is definitely spreading itself a bit more geographically. Its overall a good thing. The concern is how many of these places have enough tech diversity to be self sustaining. The Bay Area is just much, much deeper technically than these other places.
Parts of SF do smell but most of it and most of the Bay Area don't. Likewise, part of the Bay Area is foggy but I would say 80% of the Bay Area isn't.
There is definitely a growing monoculture here. Not sure Atlanta doesn't though. If you look deep enough most places do in at least one aspect.
Traffic is bad most places in the Bay Area though. Prices are high for many things beyond housing.
I think tech is definitely spreading itself a bit more geographically. Its overall a good thing. The concern is how many of these places have enough tech diversity to be self sustaining. The Bay Area is just much, much deeper technically than these other places.
I agree with you. Atlanta is a really interesting, underrated city. It feels both southern and urban in ways that few other cities do. My impression is also that it has not just a lot of racial diversity, but at all economic levels. I grew up in the South in cities with many black people, but Atlanta was the first place where I got a sense of what it felt like to be around a significant number of middle-class and wealthy black people.
Problems with the surrounding culture of the state are real, though. Being in a progressive city in a regressive state sucks, because those state laws still affect you.
Problems with the surrounding culture of the state are real, though. Being in a progressive city in a regressive state sucks, because those state laws still affect you.
Without trying to be inflammatory, and I truly mean that... One interpretation of what you're saying is that poor blacks are regressive. But, I assume what you really meant is that poor whites are regressive?
I've also lived in Georgia, and not in Atlanta, but in Augusta and Macon with a sprinkling of Savannah, as a relatively poor person (average white male) during their early 20s, if you want some context behind what I'm saying...
I've also lived in Georgia, and not in Atlanta, but in Augusta and Macon with a sprinkling of Savannah, as a relatively poor person (average white male) during their early 20s, if you want some context behind what I'm saying...
I'm from the south and interpret that comment in a very different way. Poor blacks are much more easily disenfranchised, especially in small towns. Educated people are more likely to be able to have id and get registered to vote, especially if they are a minority.
> One interpretation of what you're saying is that poor blacks are regressive.
Sure, but by that same interpretation, ice cream sales cause summer temperatures.
I think there is a correlation that politically regressive areas also feature worse poverty rates for minorities. My strong hunch is that the causation goes in the opposite direction of what you imply. Places that care less about civil rights and equality are less likely to work to address the systemic racism that leads to relatively greater poverty for blacks than whites.
Sure, but by that same interpretation, ice cream sales cause summer temperatures.
I think there is a correlation that politically regressive areas also feature worse poverty rates for minorities. My strong hunch is that the causation goes in the opposite direction of what you imply. Places that care less about civil rights and equality are less likely to work to address the systemic racism that leads to relatively greater poverty for blacks than whites.
You're also dealing with a hostile state government in the bible belt, and surrounded by far red areas. I'm leaving Missouri and wouldn't consider Georgia for that reason, although I have always enjoyed Atlanta.
So you can't stand to live in a place where many people don't think the way you think, yet you'd probably appreciate a more "diverse" city? You appreciate places like San Francisco because while others may look different, they think the same. That's fine, people are more comfortable around those who agree with them; but quit kidding yourself.
That's an uncharitable interpretation of the OP. It's not that people think different, it's that people are actively discriminated in Atlanta (well it's less an Atlanta problem and more a Georgia problem). For context I write this as an African American living in the Bay Area with family that's based in Atlanta.
For example as a Black person I know my vote won't count for much in Georgia, and that the state is actively working to disenfranchise it [0]. I also know that I won't have the ability to plan my family [1]. I know I might get weird looks if I'm in a non-heteronormative relationship [2].
So the problem most people have with "red" states isn't that people love God, love cops and love pickup trucks, it's that these areas actively working to restrict our "blue" freedoms.
0: https://www.theguardian.com/us-news/2019/aug/14/stacey-abram...
1: https://www.nytimes.com/2019/05/07/us/heartbeat-bill-georgia...
2: https://www.nytimes.com/2019/07/20/us/tennessee-internet-min... (Note, this is about Tennessee, but similar attitudes pervade the South)
For example as a Black person I know my vote won't count for much in Georgia, and that the state is actively working to disenfranchise it [0]. I also know that I won't have the ability to plan my family [1]. I know I might get weird looks if I'm in a non-heteronormative relationship [2].
So the problem most people have with "red" states isn't that people love God, love cops and love pickup trucks, it's that these areas actively working to restrict our "blue" freedoms.
0: https://www.theguardian.com/us-news/2019/aug/14/stacey-abram...
1: https://www.nytimes.com/2019/05/07/us/heartbeat-bill-georgia...
2: https://www.nytimes.com/2019/07/20/us/tennessee-internet-min... (Note, this is about Tennessee, but similar attitudes pervade the South)
SF tore down a major black community within the city (Filmore) and its policies have resulted in an exodus of blacks except for some impoverished communities.
You think your vote counts in the bay area?
Say what you will about voter suppression in Atlanta, but a vote counted there is worth a lot more than a vote counted in California.
Flip Georgia blue, and you’re making real change.
Say what you will about voter suppression in Atlanta, but a vote counted there is worth a lot more than a vote counted in California.
Flip Georgia blue, and you’re making real change.
It counts for a lot in the CA statehouse vs what it would be in GA. That said at the federal level, my vote is largely meaningless. But for the majority of my voting life I've had a bifurcated federal government that gets nothing done. So from my vantage the state is where real policy is coming from anyways.
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The comment you are replying to explicitly mentioned a "hostile state government", none of the ax-grindy stuff you're bringing up.
This is a disengenuous argument. Even people who genuinely like diversity are not obligated to want to live near all possible kinds of people. I like diversity, but I don't want to live next to neo-Nazis, anti-vaxxers, serial killers, etc.
https://en.wikipedia.org/wiki/Paradox_of_tolerance
https://en.wikipedia.org/wiki/Paradox_of_tolerance
So you’re lumping in Republicans with “Nazi’s, anti-vaxxers and serial killers”?
No, I'm giving examples of the kinds of people one wouldn't want to live next to even if one wanted diversity.
The idea that liking diversity means liking all possible humans is flawed.
The idea that liking diversity means liking all possible humans is flawed.
Which is exactly why liberal voters should move to Georgia. Georgia is purple, and it's close to going blue. It makes much more sense than concentrating these votes in California, which is as blue as it gets.
California votes are "useless", whereas Georgia votes "matter". (I don't mean to offend by this, but the swing states have an outsized impact.)
I voted out Karen Handel last election -- in a very close race -- which felt truly amazing.
California votes are "useless", whereas Georgia votes "matter". (I don't mean to offend by this, but the swing states have an outsized impact.)
I voted out Karen Handel last election -- in a very close race -- which felt truly amazing.
State laws matter more for quality of life, and I’m not going to hold my breath waiting for the backward states to catch up to CA (and other progressive states).
What liberties do you enjoy that we don't? The only egregious thing I can point to in Georgia is the heartbeat abortion bill, which if you aren't paying attention is merely a ploy to get it in front of the Supreme Court so they can make it national.
We were so close to defeating Governor Kemp and making this not happen. Now it's a risk to you and the entire nation.
We were so close to defeating Governor Kemp and making this not happen. Now it's a risk to you and the entire nation.
Assisted suicide, pro choice and pro proper sex education discussing contraceptives, sick leave, parental leave (and family leave), overtime pay (and other job benefits like being able to sit and generally pro labor, non compete ban, marijuana freedoms, stricter environmental standards etc.
It’s not all roses, there are improvements to be had, but it’s leaning in the right direction. I don’t even know why people consider states without family leave acts.
I appreciate that you are helping turn the tide though by living in a Georgia and voting to support the people that will help push the country forward, but unfortunately I can afford to live elsewhere where my daughter doesn’t have to worry about unpaid maternity leave or having to go back to work after a few weeks. I’m flummoxed as to how to fix the political system giving too much voting power per capita to conservative states without a war though.
It’s not all roses, there are improvements to be had, but it’s leaning in the right direction. I don’t even know why people consider states without family leave acts.
I appreciate that you are helping turn the tide though by living in a Georgia and voting to support the people that will help push the country forward, but unfortunately I can afford to live elsewhere where my daughter doesn’t have to worry about unpaid maternity leave or having to go back to work after a few weeks. I’m flummoxed as to how to fix the political system giving too much voting power per capita to conservative states without a war though.
What makes CA and NYC politics better? A place where you struggle to house and educate your family on a six figure salary seems to be sorely lacking.
To me it seems like we are doing terrible where it matters; - cost of living is terrible due to unwise regulation (housing, taxes for ineffective measures etc) - the vast amount of poor that live on our streets do not tell anything good about our safety net - peoples capability to engage with people of different opinions is dystopic, leading to social isolation - the education system has in the last 40 years gone from one of the best to one of the worst
To me it seems like we are doing terrible where it matters; - cost of living is terrible due to unwise regulation (housing, taxes for ineffective measures etc) - the vast amount of poor that live on our streets do not tell anything good about our safety net - peoples capability to engage with people of different opinions is dystopic, leading to social isolation - the education system has in the last 40 years gone from one of the best to one of the worst
Thanks for posting that! It reminds me that things can change for the better. I remember the way that her actions really damaged Susan G Komen for the cure charity. You make a good point about changing things. I'm on the west coast, I'm from the south. I at times am tempted to move back to the south, or one of the swing states and help move things along. It's not the best for people to segregate as we have into liberal west coast states overall, but I love living here more than my racist home town with high crime rates; I also get I'm not doing anything to help that.
I've spent my entire life in a purple island surrounded by red. It's someone else's turn.
It definitely smells bad. For me it's not at all cold: it's very consistently nearly perfect weather for me. To me, Atlanta summers are comically, miserably hot.
My favorite thing about SF is that it is rarely hot and it's relatively close to incredible mountains. I'm certainly not here for the nightlife, food scene, or art/creative scene, but more power to those who are.
My favorite thing about SF is that it is rarely hot and it's relatively close to incredible mountains. I'm certainly not here for the nightlife, food scene, or art/creative scene, but more power to those who are.
> make the same wages y'all do
As SF? Are you making, say, over $400K in Atlanta?
As SF? Are you making, say, over $400K in Atlanta?
SF is popular because it's the only place near a huge number of jobs on the peninsula that's not a generic bedroom community. If someone dropped you on El Camino Real anywhere between San Jose and San Francisco, you would have a very hard time telling which city you're in. They're all basically the same. (For those who don't know, El Camino is a major street which passes through most city downtown areas, and goes up and down the peninsula).
The bay area cities tried to maintain their "suburban" image, and ended up all being the same.
The bay area cities tried to maintain their "suburban" image, and ended up all being the same.
> always cold.
I realize this is subjective, but... What? I don't think I've ever been there when the high temperature was under 55.
I realize this is subjective, but... What? I don't think I've ever been there when the high temperature was under 55.
There is an art culture in the Bay Area and not everyone likes hip hop or country culture either.
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Humidity makes life way more miserable than temperature.
I escaped the south 16 years ago and I never want to fucking go back.
Further the bay area is home to many unique cultures that are sadly seriously distressed thanks to the housing situation, yet tenaciously persist as best they can.
Further the bay area is home to many unique cultures that are sadly seriously distressed thanks to the housing situation, yet tenaciously persist as best they can.
If you check out a lot of neighborhoods in SF you can really see this. The more middle class neighborhoods have lots of small businesses that you'd use - mechanics, bakeries, restaurants, coffee shops, etc.
Take a walk through an upper class neighborhood (Noe Valley is a good example) and it's either really expensive versions of the same ($7 for a cupcake? sure!) or weird niche stores that only the wealthy can afford (skin care clinics, high-end clothing, etc).
Take a walk through an upper class neighborhood (Noe Valley is a good example) and it's either really expensive versions of the same ($7 for a cupcake? sure!) or weird niche stores that only the wealthy can afford (skin care clinics, high-end clothing, etc).
I lived in Noe Valley for 14 years in a rent controlled apartment that quadrupled in value during that time. I was eventually evicted with an owner move-in but during that period I saw all of the useful local businesses close and be replaced with ...
1. Doctor/Dentist offices
2. Real-estate agencies
3. Banking and financial institutions
3. Doomed boutiques riding off the areas old reputation - these always closed within 6 months.
4. Expensive date restaurants or bars serving just enough food to count as a restaurant.
Off the top of my head, we lost the newspaper/magazine shop, hardware store, a few cheap restaurants, the glass blowing shop, the running store, a bunch of nice boutiques, the local butcher and most (but not all) of the businesses that made someone want to live in Noe in the first place. We gained a ton of financial and real-estate frontage (useless for day-to-day life) a couple of nice but expensive upgrades like a Whole Foods. All this money and no-one seems to actually spend it on local business, so nothing stays open for long.
Off the top of my head, we lost the newspaper/magazine shop, hardware store, a few cheap restaurants, the glass blowing shop, the running store, a bunch of nice boutiques, the local butcher and most (but not all) of the businesses that made someone want to live in Noe in the first place. We gained a ton of financial and real-estate frontage (useless for day-to-day life) a couple of nice but expensive upgrades like a Whole Foods. All this money and no-one seems to actually spend it on local business, so nothing stays open for long.
I used to live right by 24th street right before the whole foods moved in, and I can visualize all of those shops as I walked down the street to Holey Bagel (still going strong!). The little weird boutiques! The running store! But even then I would never go into any of those places. I am fully on board lamenting the fact that numerous one-of-a-kind stores no longer exist in SF because it is not economical for them to do so (RIP Macbeath hardwood), but a lot of those little shops on 24th street were put out of business by Amazon and the internet, not by SF.
This is quite possibly just a manifestation of a national trend by landlords (all ten of them) to raise rent so high that sure things like 7/11 or KFC quit. The only tenants that seem to be able to afford the rent are $COFFEE and The Habit. I've seen this in my home town (San Diego), Spokane, and Manhattan. I've probably seen it in other towns but it stops being noticeable.
A friend moved to Noe Valley about 15 years ago. Said it was working class at the time (still well off by SF standards).
Now it’s like a playground for the rich with a standard 1,500 sq ft home nearing $2.5M.
Now it’s like a playground for the rich with a standard 1,500 sq ft home nearing $2.5M.
You're basically left with hipster restaurants and coffee shops that'll charge 10$ a coffee and 20$ a meal.
The effect of SF’s nativism was to differentially push out all but the nouveau riche — ironic but inevitable because there is no restriction on internal migration in the United States.
I can’t wait for the Amazon Prime Steakhouse.
I was so disheartened to experience this when I visited last fall. I immediately ruled the area out for my move in a couple months.
Service people? Seriously, people who make $100,000 a year will have a lot of trouble living in a nice place and still be able to save for retirement. I don't know how many people in the Bay Area make $100k or less, but I would guess many millions.
It's true, but prices declining is a positive thing, and I'll take what I can get. (I say that as a Bay Area homeowner—contrary to my financial interests, I would rather see relief for lower-income renters than more equity for tech workers like me!)
Prices are definitely softer than they were a year ago, but they appear to have flattened. Note: Summer of 2018 was the highest. Prices reached euphoric levels as people overbid on homes. I'm not certain many of those buyers will recover those costs anytime soon.
Here's the median sale price from Trulia: https://www.trulia.com/real_estate/San_Jose-California/marke...
We've also done some analysis on home prices in the popular cities. Compared to 6 months ago:
Fremont https://agentsunlocked.com/trends/Fremont Single family homes in the 1500-2000 sqft range are down by about 1%
San Jose https://agentsunlocked.com/trends/San-Jose San Jose is up by about 2%
Palo Alto https://agentsunlocked.com/trends/Palo-Alto Up by 4%. Inventory in PA is usually quite thin.
San Francisco https://agentsunlocked.com/trends/San-Francisco SF is flat.
Here's the median sale price from Trulia: https://www.trulia.com/real_estate/San_Jose-California/marke...
We've also done some analysis on home prices in the popular cities. Compared to 6 months ago:
Fremont https://agentsunlocked.com/trends/Fremont Single family homes in the 1500-2000 sqft range are down by about 1%
San Jose https://agentsunlocked.com/trends/San-Jose San Jose is up by about 2%
Palo Alto https://agentsunlocked.com/trends/Palo-Alto Up by 4%. Inventory in PA is usually quite thin.
San Francisco https://agentsunlocked.com/trends/San-Francisco SF is flat.
A recession resulting in job losses in tech would probably drop house prices. Still at 1.5 million there’s a long way to decline.
Based on the charts, this looks more like a cyclical bounce rather than a long-term trend. Even at "9.5% below the peak in May 2018", that's only a little over a year of downward pressure. The question is if an economic downturn combined with new housing starts can actually upset the long-term upward trend for more 18 months.
Yup. Sounds healthy to me, and hardly a "pop". Things were overheated and need to deflate a bit.
In my 'hood on the Peninsula, single datapoint I know, a house was just listed yesterday at $1.25m with a zillow estimate of its peak value at $1.5m in October 2018. That corresponds with my "feel" of the market in the area, as someone who still has zillow listings emailed regularly for the past 5 years for my zip.
In my 'hood on the Peninsula, single datapoint I know, a house was just listed yesterday at $1.25m with a zillow estimate of its peak value at $1.5m in October 2018. That corresponds with my "feel" of the market in the area, as someone who still has zillow listings emailed regularly for the past 5 years for my zip.
$100-200k of depreciation in a year is rather steep!
I don't know why the article title (and therefore this post's title, currently) says "House prices drop" as the article specifically says the opposite:
> In California overall, there is now a bifurcation: Condo prices are already falling on a year-over-year basis, and house prices are still rising.
> In California overall, there is now a bifurcation: Condo prices are already falling on a year-over-year basis, and house prices are still rising.
in sf bay area specifically it is dropping. as the title says.
in california (which i am sure you know is different from the sf bay area) house prices are slightly up.
in california (which i am sure you know is different from the sf bay area) house prices are slightly up.
Note that the lockup for the recent spate of IPOs hasn't expired yet. It's possible that there will be a small recovery/bounce in the coming winter and spring. We'll see.
Is that actually a major blocker? Anecdotally, when I check out expensive open houses, it's frequently Uber & Lyft engineers that are also there. It's possible that they're just window shopping, but to me it seems like if you know you have $X in pre-IPO stock and have been pulling in $150-200K base for 5+ years the lockup doesn't really matter. You've got enough saved for a down payment already, and when I talked to a mortgage broker they seemed willing to lend against public-company stock compensation. (This strikes me as...risky, but it wouldn't be the first time banks have done something risky in a bubble.)
> risky
It just depends on the debt to collateral ratio
25% could be good enough, but when they do 50% or overleverage then you should worry
The bay area would definitely be hit hard temporarily if tech, housing and lending slowed as some real estate companies take on greater risk than others, like offering no money down if you work at a FAANG with a lien on your shares.
But if there isnt much leverage then asset prices themselves dont magically become a problem just because the upward trajectory lasted a while
1999 and 2008 were leverage problems, with 2008 exacerbated by the surprise implosion of a large bank - Lehman - a few days after getting the highest credit rating, this simultaneously froze all lending since the confidence system failed. Morgan Stanley was leverage 40x the assets they had. So regulations since then ensure certain capital ratios: deleverage. As long as people find wealth and buy with that found wealth, bull market continues. If people buy with the future prospects of finding wealth, and that fails, bull market fails. Less future betting, continued steady bull market.
It just depends on the debt to collateral ratio
25% could be good enough, but when they do 50% or overleverage then you should worry
The bay area would definitely be hit hard temporarily if tech, housing and lending slowed as some real estate companies take on greater risk than others, like offering no money down if you work at a FAANG with a lien on your shares.
But if there isnt much leverage then asset prices themselves dont magically become a problem just because the upward trajectory lasted a while
1999 and 2008 were leverage problems, with 2008 exacerbated by the surprise implosion of a large bank - Lehman - a few days after getting the highest credit rating, this simultaneously froze all lending since the confidence system failed. Morgan Stanley was leverage 40x the assets they had. So regulations since then ensure certain capital ratios: deleverage. As long as people find wealth and buy with that found wealth, bull market continues. If people buy with the future prospects of finding wealth, and that fails, bull market fails. Less future betting, continued steady bull market.
With a seemingly endless stream of stock wealth, those recent IPOs don't even cross my radar, frankly. I don't have the impression that there are more IPOs recently than there had been over the past decade, but maybe I'm wrong.
For companies centered around the Bay Area, this was probably the biggest year in a while. However, employees have had secondary market access to sell their shares in all the major companies that went public recently. So I'm not sure if the lockup would make a difference.
It's weird, but I wonder if people may be holding on to supply with this in mind. Or even waiting until next spring.
But decreased supply from buyers waiting to list should increase prices, not decrease them.
Indeed.
However, I wonder how median price is impacted by a shifting mix of the houses that change hands?
If buyers were moving towards the lower end of the market and away from the upper end, you could see the median price decrease when in fact any given house has actually gone up in price.
However, I wonder how median price is impacted by a shifting mix of the houses that change hands?
If buyers were moving towards the lower end of the market and away from the upper end, you could see the median price decrease when in fact any given house has actually gone up in price.
Now, at least. If the buyers don't materialize and they give up on waiting, it increases supply and decreases prices.
If they were holding on to supply, it would keep prices high (since the people that did want to buy houses right now would have to pay higher prices to make up for the lost revenue sellers would have gotten post IPO
Over the years I've constantly heard about how expensive X city is. But you look 10 years later and it's even more expensive.
If the city has jobs and the weather is relatively nice versus the rest of the country then don't expect the home prices to drop for any long period of time.
What ends up happening is that a set of people that can't get the right paying jobs get priced out and those that have the right skills move in. We see it over and over again. You would think that technology would have disrupted the situation but it has not.
My thinking is that with the deliver anything in 2 hours apps. It will be easier for people to move into an area where they don't have all the restaurants and small shops people usually like in the neighborhood. They can just order it. Therefore, making it easier for prices to stay up as long as there's a way to pay.
Los Angeles is one of those cities that has long ago priced many people out of being able to buy a home. So what has happened is that people commute into the city from cities around LA. I don't expect that to change in most of our lifetimes.
If the city has jobs and the weather is relatively nice versus the rest of the country then don't expect the home prices to drop for any long period of time.
What ends up happening is that a set of people that can't get the right paying jobs get priced out and those that have the right skills move in. We see it over and over again. You would think that technology would have disrupted the situation but it has not.
My thinking is that with the deliver anything in 2 hours apps. It will be easier for people to move into an area where they don't have all the restaurants and small shops people usually like in the neighborhood. They can just order it. Therefore, making it easier for prices to stay up as long as there's a way to pay.
Los Angeles is one of those cities that has long ago priced many people out of being able to buy a home. So what has happened is that people commute into the city from cities around LA. I don't expect that to change in most of our lifetimes.
"If the city has jobs and the weather is relatively nice versus the rest of the country then don't expect the home prices to drop for any long period of time."
people move there because of the companies and their HQs, and how the density drives the salary up, it has very little to do with the weather?
"My thinking is that with the deliver anything in 2 hours apps. It will be easier for people to move into an area where they don't have all the restaurants and small shops people usually like in the neighborhood. They can just order it. Therefore, making it easier for prices to stay up as long as there's a way to pay." Again, what does this have to do with the primary motivations to move?
people move there because of the companies and their HQs, and how the density drives the salary up, it has very little to do with the weather?
"My thinking is that with the deliver anything in 2 hours apps. It will be easier for people to move into an area where they don't have all the restaurants and small shops people usually like in the neighborhood. They can just order it. Therefore, making it easier for prices to stay up as long as there's a way to pay." Again, what does this have to do with the primary motivations to move?
I moved to LA for work, but I've stayed for the weather.
Because the general quality of life here is miserable and it’s a filthy area. For instance, in recent events the DA is fumbling the prosecution of a homeless attacker and the judge said jail wasn’t always the solution... I saw a guy pull his penis out on the BART escalator and rub it on 3 women! I saw another guy with a huge knife walking around the BART platform. Anyone who took the Civic Center BART would remember the hallways of heroin addicts with needles in their arms. And then houses cost $1M for a house where cops won’t do anything about people shitting on your property or camping on your property unless you have a restraining order... and then you a job you work 9-17 hour days at? It’s just not worth it. I just wish I knew where I wanted to escape to. Seattle, Portland, Denver are all nearly as bad and getting worse. Where are the normal people fleeing to? Is there refuge somewhere? Austin is seemingly more appealing all the time, but the weather and politics of Texas are turn offs.
I'm also curious where people are going - one place is out on the BART extensions. Public schools 9's and 10's, reasonable police response to violent behavior etc (I saw guy spit on old women on BART, she was near tears, she'd asked him to move his feet (he had them out across the handicapped seats). No one even blinks - my guess is he could punch but not kill her without consequence.
New York? What's wrong with new York? They're authoritarian in just the one thing most people want them to be authoritarian on, which is policing
Not that I think much of technical analysis, but from eyeballing those charts it looks like we're right on the (upwards) trend that has held all decade, with the exception of people getting a bit over-excited in 2018.
I'm quietly hoping for it to flatten off or drop, but I don't see it in those charts.
I'm quietly hoping for it to flatten off or drop, but I don't see it in those charts.
Here's a site graphing in different ways 30+ years of SF and SF Bay Area market data: https://www.marymacphersonsf.com/30-years-of-san-francisco-b...
The pattern has been the same since the 1980s.
The pattern has been the same since the 1980s.
Stanford is not going anywhere. UCSF is not going anywhere. UC Berkeley is not going anywhere. VC not going to completely uproot anytime soon. Can’t build much farther out in the suburbs due to water shortages, and not making more land. NIMBY prevents higher density housing projects.
Apart from fires and earthquakes, I don’t see why the trend will change.
Apart from fires and earthquakes, I don’t see why the trend will change.
Seems to be really strong seasonality. How does that make sense? Wouldn't people put off their purchases until -it looks like- the end of the year?
> Wouldn't people put off their purchases until -it looks like- the end of the year
A. Housing is one of the basic requirements, and there are a variety of reasons why you wouldn't be able to time it like that. E.g. ended a old job, started a new job, marriage, birth, death.
B. Even outside large life events, many people don't want to disrupt large holidays with a stressful move. Ditto for school terms.
C. Houses look and show better in summer that winter. Seeing a healthy yard instead of bare trees, snow, and brown grass is good for value.
D. Often, the person buying a house is selling a house at the same time. Your new house costs 10% less in the winter, but your old house sells for 10% less as well. (Still a good deal if you are upgrading; just less of a good deal than you might initially think.)
E. If buying a house is absolutely conditional on selling one, winter is a somewhat riskier time since the market's volume is lower.
A. Housing is one of the basic requirements, and there are a variety of reasons why you wouldn't be able to time it like that. E.g. ended a old job, started a new job, marriage, birth, death.
B. Even outside large life events, many people don't want to disrupt large holidays with a stressful move. Ditto for school terms.
C. Houses look and show better in summer that winter. Seeing a healthy yard instead of bare trees, snow, and brown grass is good for value.
D. Often, the person buying a house is selling a house at the same time. Your new house costs 10% less in the winter, but your old house sells for 10% less as well. (Still a good deal if you are upgrading; just less of a good deal than you might initially think.)
E. If buying a house is absolutely conditional on selling one, winter is a somewhat riskier time since the market's volume is lower.
Summer is generally the busiest time of year for real estate purchases and Christmas/New Years is generally the slowest.
Anecdotally, this is true in many places but not true in San Francisco. August tends to be slow for purchases in SF for historic reasons that I don't fully grok, but it shows up in the data and is "common knowledge" among local agents.
Houses are ugly and wet in winter. There's definitely seasonality to the housing market. Most sales in summer. And winter best time to buy, can save 10-20%.
Unless they are desperate, any wait until summer to sell, so winters can be supplied constrained.
Possibly also select for more problematic houses?
It's just a median price, not a proper index. Probably just people buying bigger houses/better locations at some times of year.
I think home purchases are made after the school year ends, but before the next school year starts.
Yet from what I've seen rent prices continue to hold or rise. If I had to guess, more and more people may be opting away from home ownership so the charts on demand for purchasing homes may be trending downward as demand for renting trends upward. Would've been interesting of the article juxtaposed the two but it could help explain why prices for one has gone down as the other goes up.
>>> more and more people may be opting away from home ownership
I don't think people are opting away from home ownership but rather forced away from home ownership due to high down payment requirement and lack of enough jobs that allow someone to save enough.
Who has $100,000 in cash to put down 10% downpayment?
It is a vicious cycle.
Less people are able to afford downpayment. So more people are crowding into rental market. But affordable rental supply is decreasing as more rental units are converted into condo/house AND more people are forced into rentals.
It is really a vicious, destructive downward spiral.
I don't think people are opting away from home ownership but rather forced away from home ownership due to high down payment requirement and lack of enough jobs that allow someone to save enough.
Who has $100,000 in cash to put down 10% downpayment?
It is a vicious cycle.
Less people are able to afford downpayment. So more people are crowding into rental market. But affordable rental supply is decreasing as more rental units are converted into condo/house AND more people are forced into rentals.
It is really a vicious, destructive downward spiral.
Having boots on the ground here, have to wonder if related to all the increased Austin emigration.
I'm seeing significant migration to basically any liberal city with a decent quality of life. I've lost friends to Boulder, Toronto, Boston, Raleigh/Durham, Seattle, and Sydney (Australia).
> Sydney (Australia)
Do you think people on HN don't know where Sydney is?
Do you think people on HN don't know where Sydney is?
What is the seasonality?
It looks like prices peak in the summer and bottom out in the winter. The difference in price isn't far off from what a Realtor would charge in commission (otherwise there would be arbitrage.)
Am I right about that?
It looks like prices peak in the summer and bottom out in the winter. The difference in price isn't far off from what a Realtor would charge in commission (otherwise there would be arbitrage.)
Am I right about that?
I think the most important principle here is that no reasonable and compassionate housing reform should be attempted until I, I mean, until people, until people have a chance to cash out at the peak.
There aren't enough 1%ers being minted by things like Google and Facebook IPOs to drive purchases.
(Winter is coming)
(Winter is coming)
Left Bay Area in mid-2000s. Cannot go back. Not sure if I want to.
SF median price is 1084$/sq ft. It still has a long long way to drop before it gets anywhere close to the 128$/sq ft nationwide average. At the rate of -6% per year, it would need to continue dropping at that rate for 35 years before we reach the national average. So, one way or another, we're going to be stuck with extremely high housing prices for a really long time.
Why would one ever expect the median price per square foot in San Francisco, a metropolis with high economic activity, to ever approach that of the US on average?!
If we’re going to pick targets, then comparing it to other large metropolises in the US makes more sense (LA: $678, Seattle: $526, San Diego: $447)
If we’re going to pick targets, then comparing it to other large metropolises in the US makes more sense (LA: $678, Seattle: $526, San Diego: $447)
Those are more examples of over-regulated over-zoned blue state cities that have done it wrong.
Take a look at a city that knows what they're doing with housing, like Chicago or Houston (population 2 million and over, and Houston growing x4.5 faster than SF!). Houston added 364K people in the last 8 years. How many did SF do, a pathetic 80K in a city that has sooo many tech companies and soo much money. SF and other blue cities have a lot to learn about how to grow, and how to create the type of policies that allow them to do so (some of the population is hellbent against that).
Know how much housing costs in a city twice as large as SF, growing x4.5 times faster, Houston is 143$/sq foot and puts the entire West coast and every other blue state/city to shame.
Take a look at a city that knows what they're doing with housing, like Chicago or Houston (population 2 million and over, and Houston growing x4.5 faster than SF!). Houston added 364K people in the last 8 years. How many did SF do, a pathetic 80K in a city that has sooo many tech companies and soo much money. SF and other blue cities have a lot to learn about how to grow, and how to create the type of policies that allow them to do so (some of the population is hellbent against that).
Know how much housing costs in a city twice as large as SF, growing x4.5 times faster, Houston is 143$/sq foot and puts the entire West coast and every other blue state/city to shame.
I know nothing about Chicago, but I DO know that Houston is frequently cited as an example of doing it exactly wrong.
Better to regulate than to let developers build in a designed flood zone, as Houston did.
They're stilling tallying the damages from the recent flooding there and it's in the billions.
Also, Chicago is one of the bluest cities in the country. It's even bluer than Los Angeles or San Diego, both of which have sizable conservative populations.
They're stilling tallying the damages from the recent flooding there and it's in the billions.
Also, Chicago is one of the bluest cities in the country. It's even bluer than Los Angeles or San Diego, both of which have sizable conservative populations.
That's one of the first things I check when I'm renting. I don't live in flood zones, even if they're levee'd.
if you loose your 150K house in Houston, maybe you have a bit of a financial setback. If you loose your house in SF, you'll face financial bankrupcy because your losses are so much higher. Earthquaker insurance will cost you a huge amount.
I don't know much about Houston, but it's worth noting that Houston has 14x the land area.
And no zoning laws whatsoever — which is great until some chemical plant next to a retirement home blows up and people die (or are seriously injured).
Chicago and Houston are not desirable places to live when compared to every other city mentioned in this thread.
What's wrong with Chicago?
The state of Illinois is not financially sound. The state's bond rating, a measure of its credit worthiness, is hovering at the border of junk-bond territory. Pension liabilities and ineffective government are persistent dark clouds. You likely don't want to be the last taxpayer standing when the wheels come off that train.
Compare it to an equivalent urban area. Nationwide averages are meaningless.
The price per sq.ft. will never approach the average in any important city.
https://www.visualcapitalist.com/interactive-map-price-per-s...
https://www.visualcapitalist.com/interactive-map-price-per-s...
This is unfortunate, since this is money better spend on innovations and people getting enough wealth to start their own thing in their garage.