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What I find amazing though is that rents have been flat for the last 2 years. https://www.zillow.com/santa-clara-county-ca/home-values/ https://www.zillow.com/

What I find amazing though is that rents have been flat for the last 2 years. https://www.zillow.com/santa-clara-county-ca/home-values/ https://www.zillow.com/santa-clara-county-ca/home-values/ And prices (relative to rents) have increased even more (>35% actually) if you factor in tax code changes making home-owning comparatively more expensive. Irrational market?

SatvikBeri 9y ago
I think it's mostly that the relative value of future money to current money went up, due to cheap money and lack of investment opportunities. One piece of evidence for this is increase in earnings-per-share multiples paid for stocks in the S&P 500: http://www.multpl.com/ http://www.multpl.com/
- usaar333 9y ago
  But the counter-evidence is that real estate investment trusts are generally flat over the last 2+ years (and that S&P valuation increases can be mostly credited to belief in a business friendly political environment). What makes Santa Clara real estate defy that trend?
conanbatt 9y ago
Rents might have hit a limit with the lower half of incomes of the area. I've read some articles that mention that california is losing a lot of people.
- seanmcdirmid 9y ago
  People are always leaving California, yet every year it gains in total population. As Yogi Berra said, "Nobody goes there anymore. It’s too crowded."
  - jessaustin 9y ago
    "Bay Area is top region for outward migration in the U.S." https://www.sfgate.com/expensive-san-francisco/article/Bay-Area-outward-migration-exodus-sf-redfin-12563337.php https://www.sfgate.com/expensive-san-francisco/article/Bay-A...
    - seanmcdirmid 9y ago
      Yes, it would lose population if it wasn't also a top region for inward migration from outside the US. Growth is definitely slowing down (housing has a lot to do with that), but I don't think we will see actual falls until the next decade.
      - jessaustin 9y ago
        That's a short article, and it describes "actual falls" already in progress. It claims that last year the net outflow for SF was 2,332 down from net inflow of comparable absolute value only five years ago.
jseliger 9y ago
SF has, finally, after decades of underbuilding, allowed some modest increase in the supply of multi-family housing units: https://sf.curbed.com/2017/5/4/15543668/san-francisco-new-home-construction-population-2017 https://sf.curbed.com/2017/5/4/15543668/san-francisco-new-ho.... Oakland has done the same. The story above is about single-family units, and there is effectively almost no undeveloped space within commuting distance of SF / SV for additional single-family housing units. SF and SV are likely substitutes for renters in the area. Seattle has some similar problems: https://jakeseliger.com/2015/09/24/do-millennials-have-a-future-in-seattle-do-millennials-have-a-future-in-any-superstar-cities https://jakeseliger.com/2015/09/24/do-millennials-have-a-fut... although less severe; about 60% of Seattle is still zoned for single-family housing alone: https://www.thestranger.com/slog/2017/06/21/25230243/poll-finds-nearly-half-of-seattleites-support-changing-single-family-zoning https://www.thestranger.com/slog/2017/06/21/25230243/poll-fi..., which exacerbates its housing crisis.
- seanmcdirmid 9y ago
  Seattle has made a lot of progress in the last 20 years. West Seattle for example, has become pretty crowded with apartments, though, as with with the rest of the city, they are concentrated along transit corridors (West Seattle still chokes on traffic these days, unfortunately). Rents are definitely weaker than they were a couple of years ago. Maybe no reductions but definitely incentives and a freeze on increases.
- pradn 9y ago
  It's surprising how close majority-single-family-housing areas are to downtown Seattle, South Lake Union (Amazon campus), and Fremont (Google campus + smaller companies.) A few blocks north of the Google campus is mostly single-family housing. Queen Anne, north Capitol Hill, Greenlake, First Hill - all have apartment buildings only on major roads.

SatvikBeri 9y ago

I think it's mostly that the relative value of future money to current money went up, due to cheap money and lack of investment opportunities. One piece of evidence for this is increase in earnings-per-share multiples paid for stocks in the S&P 500: http://www.multpl.com/ http://www.multpl.com/

usaar333 9y ago
But the counter-evidence is that real estate investment trusts are generally flat over the last 2+ years (and that S&P valuation increases can be mostly credited to belief in a business friendly political environment). What makes Santa Clara real estate defy that trend?

conanbatt 9y ago

Rents might have hit a limit with the lower half of incomes of the area. I've read some articles that mention that california is losing a lot of people.

seanmcdirmid 9y ago
People are always leaving California, yet every year it gains in total population. As Yogi Berra said, "Nobody goes there anymore. It’s too crowded."
- jessaustin 9y ago
  "Bay Area is top region for outward migration in the U.S." https://www.sfgate.com/expensive-san-francisco/article/Bay-Area-outward-migration-exodus-sf-redfin-12563337.php https://www.sfgate.com/expensive-san-francisco/article/Bay-A...
  - seanmcdirmid 9y ago
    Yes, it would lose population if it wasn't also a top region for inward migration from outside the US. Growth is definitely slowing down (housing has a lot to do with that), but I don't think we will see actual falls until the next decade.
    - jessaustin 9y ago
      That's a short article, and it describes "actual falls" already in progress. It claims that last year the net outflow for SF was 2,332 down from net inflow of comparable absolute value only five years ago.

jseliger 9y ago

SF has, finally, after decades of underbuilding, allowed some modest increase in the supply of multi-family housing units: https://sf.curbed.com/2017/5/4/15543668/san-francisco-new-home-construction-population-2017 https://sf.curbed.com/2017/5/4/15543668/san-francisco-new-ho.... Oakland has done the same. The story above is about single-family units, and there is effectively almost no undeveloped space within commuting distance of SF / SV for additional single-family housing units. SF and SV are likely substitutes for renters in the area. Seattle has some similar problems: https://jakeseliger.com/2015/09/24/do-millennials-have-a-future-in-seattle-do-millennials-have-a-future-in-any-superstar-cities https://jakeseliger.com/2015/09/24/do-millennials-have-a-fut... although less severe; about 60% of Seattle is still zoned for single-family housing alone: https://www.thestranger.com/slog/2017/06/21/25230243/poll-finds-nearly-half-of-seattleites-support-changing-single-family-zoning https://www.thestranger.com/slog/2017/06/21/25230243/poll-fi..., which exacerbates its housing crisis.

seanmcdirmid 9y ago
Seattle has made a lot of progress in the last 20 years. West Seattle for example, has become pretty crowded with apartments, though, as with with the rest of the city, they are concentrated along transit corridors (West Seattle still chokes on traffic these days, unfortunately). Rents are definitely weaker than they were a couple of years ago. Maybe no reductions but definitely incentives and a freeze on increases.
pradn 9y ago
It's surprising how close majority-single-family-housing areas are to downtown Seattle, South Lake Union (Amazon campus), and Fremont (Google campus + smaller companies.) A few blocks north of the Google campus is mostly single-family housing. Queen Anne, north Capitol Hill, Greenlake, First Hill - all have apartment buildings only on major roads.