4 ms·

330K USD in San Francisco is much, much less than 300K USD in Buenos Aires

by pszndr 8y ago

randomacct3847 8y ago
True, but consider that 70% of rentals in SF are rent controlled. It takes a couple emails from FB groups or Craigslist to find a good living situation for way below market rate. Case in point: my friend that worked at Waymo paid $900/mo for a room in a house in Lower Haight...
- jazzyjackson 8y ago
  900$/mo isn't necessarily below market rate. I lived by central park in manhattan for $1000/month, and I slept on the loft above my clotheshangers because it was basically a closet.
  - randomacct3847 8y ago
    This is for sure below market...it’s been rent controlled for almost 10 years. Huge room in central Lower Haight. That place should go for at least $5500 between 3 people in a 3 bed/2ba.
mattigames 8y ago
People don't even conceive the difference, in Buenos Aires you can rent a great house in a great neighborhood for 800 USD per month, in San Fran you get a shared room where other 3 people live for that much -IF even that-. In SF you spend at least 5 dollars going anywhere and going back using public transport, in Buenos aires $2 is more than enough to go the the opposite side of the city and back.
- lucb1e 8y ago
  I know it is that way, but I don't understand it. It always seems to me like it just indicates that the exchange rate is wrong: clearly I can buy more stuff if I convert my money to pesos and spend them there, so the peso is just worth less than the amount we get per euro. Could someone recommend some a website or blog post that explains this? (Or is it a simple enough explanation to fit in an HN comment without going hugely off topic?)
  - agf 8y ago
    So why haven't you done that, one of the times in the past you've thought this? All the reasons you haven't are why everyone else doesn't either, so that's why it's the proper exchange rate.
  - lojack 8y ago
    What makes you attribute that to exchange rate when you can do the same thing with different parts of the US? $800 for a nice house in a nice part of town isn't that far off from prices where I live (Cleveland).
  - retsibsi 8y ago
    In the case of housing and transport, it's easy to see why prices can be very different in different parts of the world: cheaper housing basically just means that not as many people (relative to the number of houses available) are willing and able to spend a lot of money to live in that location; transport prices probably differ for a bunch of reasons, but the main point is that there's no reason they should converge, as transport within city X is not a possible substitute for transport within city y. For other goods, you should be surprised if the price discrepancy is one that you really could exploit for significant profit (after accounting for shipping, import/export restrictions and taxes, and so on) -- but otherwise, I don't think it's a very strange phenomenon. Prices will always be set somewhere in the overlapping region between the cost of production (and distribution, and taxes, minus any subsidies, etc.) and the amount that customers are willing and able to pay. Both of those amounts can vary pretty dramatically from place to place.
  - jussij 8y ago
    Rental housing is a market and just like other markets it can be modelled using the economics described by the demand curve. The demand curve maps the relationship between supply, demand and price. It says that for high demand and low supply the price is high, for low demand and high supply the price is low and over time supply, demand and price will find an equilibrium. So if you consider the housing market, on the supply side you are looking at a constrained resource (i.e. it is constrained by the land available to build). The demand side will be driven by the numbers of people looking to rent and that will be driven by many other factors like work prospects, quality of life, crime rates etc etc. So for places like SF there will be great demand for that limited housing which means the price (i.e. the rent) goes up.
jypepin 8y ago
you could probably still make that money working remotely with a sfba company tho

330K USD in San Francisco is much, much less than 300K USD in Buenos Aires

by pszndr 8y ago

330K USD in San Francisco is much, much less than 300K USD in Buenos Aires

True, but consider that 70% of rentals in SF are rent controlled. It takes a couple emails from FB groups or Craigslist to find a good living situation for way below market rate. Case in point: my friend that worked at Waymo paid $900/mo for a room in a house in Lower Haight...

jazzyjackson 8y ago
900$/mo isn't necessarily below market rate. I lived by central park in manhattan for $1000/month, and I slept on the loft above my clotheshangers because it was basically a closet.
- randomacct3847 8y ago
  This is for sure below market...it’s been rent controlled for almost 10 years. Huge room in central Lower Haight. That place should go for at least $5500 between 3 people in a 3 bed/2ba.

mattigames 8y ago

People don't even conceive the difference, in Buenos Aires you can rent a great house in a great neighborhood for 800 USD per month, in San Fran you get a shared room where other 3 people live for that much -IF even that-. In SF you spend at least 5 dollars going anywhere and going back using public transport, in Buenos aires $2 is more than enough to go the the opposite side of the city and back.

lucb1e 8y ago
I know it is that way, but I don't understand it. It always seems to me like it just indicates that the exchange rate is wrong: clearly I can buy more stuff if I convert my money to pesos and spend them there, so the peso is just worth less than the amount we get per euro. Could someone recommend some a website or blog post that explains this? (Or is it a simple enough explanation to fit in an HN comment without going hugely off topic?)
- agf 8y ago
  So why haven't you done that, one of the times in the past you've thought this? All the reasons you haven't are why everyone else doesn't either, so that's why it's the proper exchange rate.
- lojack 8y ago
  What makes you attribute that to exchange rate when you can do the same thing with different parts of the US? $800 for a nice house in a nice part of town isn't that far off from prices where I live (Cleveland).
- retsibsi 8y ago
  In the case of housing and transport, it's easy to see why prices can be very different in different parts of the world: cheaper housing basically just means that not as many people (relative to the number of houses available) are willing and able to spend a lot of money to live in that location; transport prices probably differ for a bunch of reasons, but the main point is that there's no reason they should converge, as transport within city X is not a possible substitute for transport within city y. For other goods, you should be surprised if the price discrepancy is one that you really could exploit for significant profit (after accounting for shipping, import/export restrictions and taxes, and so on) -- but otherwise, I don't think it's a very strange phenomenon. Prices will always be set somewhere in the overlapping region between the cost of production (and distribution, and taxes, minus any subsidies, etc.) and the amount that customers are willing and able to pay. Both of those amounts can vary pretty dramatically from place to place.
- jussij 8y ago
  Rental housing is a market and just like other markets it can be modelled using the economics described by the demand curve. The demand curve maps the relationship between supply, demand and price. It says that for high demand and low supply the price is high, for low demand and high supply the price is low and over time supply, demand and price will find an equilibrium. So if you consider the housing market, on the supply side you are looking at a constrained resource (i.e. it is constrained by the land available to build). The demand side will be driven by the numbers of people looking to rent and that will be driven by many other factors like work prospects, quality of life, crime rates etc etc. So for places like SF there will be great demand for that limited housing which means the price (i.e. the rent) goes up.

jypepin 8y ago

you could probably still make that money working remotely with a sfba company tho