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"Last year I was in Seattle and all I heard was complaints about all of the highrises going up as if that was what was causing the high rents." Well, no. Peopl

by timr 9y ago

"Last year I was in Seattle and all I heard was complaints about all of the highrises going up as if that was what was causing the high rents." Well, no. People are complaining about the change in their neighborhoods, of which high rents and new construction are both observable qualities. But not to worry...if rents are truly declining, the new construction will rather quickly stop. Real estate investors are smart enough not to build into falling markets for long. They will leave holes in the ground before they complete a project that won't pencil out on financing -- just as they did in Seattle and San Francisco during the last bust. (Edit: you guys...really. The article itself says that construction has already slowed down: "Developers and banks that lend money for new construction have taken notice of the market cooling. While tons of new buildings are already approved or under construction now, the pipeline for future projects that exist only on paper is shrinking." If rents decline from new construction, it happens over years of economic shifts, not because developers rush headlong over the cliff like a bunch of lemmings.)

hn_throwaway_99 9y ago
Sigh, not sure why I feel the need to respond to posts like these, but this pattern, where a poster expresses haughty distain that others dare downvote them, then posts "evidence" that likely misses the point of the downvotes in the first place, is annoying. I don't think anyone who understands supply and demand thinks that new construction won't slow - it's pretty self evident that if demand slows that people will stop adding supply. If anything, I think folks are objecting to the tone of your post that makes it sound like declining rents will leave a wake of "holes in the ground" instead of a normal and healthy adjustment.
- timr 9y ago
  "not sure why I feel the need to respond to posts like these, but this pattern, where a poster expresses haughty distain that others dare downvote them, then posts "evidence" that likely misses the point of the downvotes in the first place, is annoying." I didn't post "evidence" (scare quotes yours). The quote is right there, in the article. It's something that's actually happening, and I quoted it because of the irony. Likewise, I lived in SF during the last crash. I saw the holes in the ground, with my own eyes -- developers pulled construction equipment out of foundations, and left them there, at mid-Market, in downtown San Francisco. I lived near two of them. Nothing I'm saying here is even remotely theoretical. The real issue is that there's a certain popular narrative here, and any facts that disagree with that narrative are immediately ejected from the conversation. It isn't "haughty disdain" to observe that people are rejecting facts that don't fit their biases.
  - lsc 9y ago
    You're not wrong, people are just objecting to your bombast. Also note, 2008 was unusually dramatic; one of the big projects in downtown sunnyvale went bankrupt and changed hands several times before completion. Yes, declining home prices do sometimes leave long term holes in the ground, but mostly only when prices decline a lot more quickly than expected, as they did in 2008. I was here in 2001, too, though (or a little up the peninsula) and there was a bigger drop in rent (though not sale prices) then than in 2008. In 2001, sure, you saw 'for rent' signs, but as far as I remember, the 'holes in the ground' as you put it, of buildings who's builders had gone bankrupt partway through were rare.
    - timr 9y ago
      Nah, people are objecting because they don't want to hear facts that contradict their preferred narrative. They want to believe that construction instantly lowers prices, and any information that contradicts this narrative is voted into the dirt on HN. I grant you that 2008 was exceptional, as recessions go...but it's not rare to see projects abandoned. I saw it in Seattle in 2001 as well. It just depends on the state of the projects when the recession hits -- you might not get "holes in the ground" unless the decline hits quite suddenly (as in 2008), but you definitely see projects abandoned. That's universal.
  - wbl 9y ago
    Profitable projects get built regardless of price history.
c3534l 9y ago
Certainly here in Portland that's what people complain about. The rent here isn't as bad as, say, New York City or San Francisco. But it does mean that over time people can no longer afford to live in the neighborhood they grew up in, and it means change that the existing residents don't want.

by timr 9y ago

hn_throwaway_99 9y ago

Sigh, not sure why I feel the need to respond to posts like these, but this pattern, where a poster expresses haughty distain that others dare downvote them, then posts "evidence" that likely misses the point of the downvotes in the first place, is annoying. I don't think anyone who understands supply and demand thinks that new construction won't slow - it's pretty self evident that if demand slows that people will stop adding supply. If anything, I think folks are objecting to the tone of your post that makes it sound like declining rents will leave a wake of "holes in the ground" instead of a normal and healthy adjustment.

timr 9y ago
"not sure why I feel the need to respond to posts like these, but this pattern, where a poster expresses haughty distain that others dare downvote them, then posts "evidence" that likely misses the point of the downvotes in the first place, is annoying." I didn't post "evidence" (scare quotes yours). The quote is right there, in the article. It's something that's actually happening, and I quoted it because of the irony. Likewise, I lived in SF during the last crash. I saw the holes in the ground, with my own eyes -- developers pulled construction equipment out of foundations, and left them there, at mid-Market, in downtown San Francisco. I lived near two of them. Nothing I'm saying here is even remotely theoretical. The real issue is that there's a certain popular narrative here, and any facts that disagree with that narrative are immediately ejected from the conversation. It isn't "haughty disdain" to observe that people are rejecting facts that don't fit their biases.
- lsc 9y ago
  You're not wrong, people are just objecting to your bombast. Also note, 2008 was unusually dramatic; one of the big projects in downtown sunnyvale went bankrupt and changed hands several times before completion. Yes, declining home prices do sometimes leave long term holes in the ground, but mostly only when prices decline a lot more quickly than expected, as they did in 2008. I was here in 2001, too, though (or a little up the peninsula) and there was a bigger drop in rent (though not sale prices) then than in 2008. In 2001, sure, you saw 'for rent' signs, but as far as I remember, the 'holes in the ground' as you put it, of buildings who's builders had gone bankrupt partway through were rare.
  - timr 9y ago
    Nah, people are objecting because they don't want to hear facts that contradict their preferred narrative. They want to believe that construction instantly lowers prices, and any information that contradicts this narrative is voted into the dirt on HN. I grant you that 2008 was exceptional, as recessions go...but it's not rare to see projects abandoned. I saw it in Seattle in 2001 as well. It just depends on the state of the projects when the recession hits -- you might not get "holes in the ground" unless the decline hits quite suddenly (as in 2008), but you definitely see projects abandoned. That's universal.
- wbl 9y ago
  Profitable projects get built regardless of price history.

c3534l 9y ago

Certainly here in Portland that's what people complain about. The rent here isn't as bad as, say, New York City or San Francisco. But it does mean that over time people can no longer afford to live in the neighborhood they grew up in, and it means change that the existing residents don't want.