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Bay Area housing prices drop in tech-heavy counties

• gumby 8y ago
  Looks like the price of starter homes. The high end is still holding up well, and will likely get juiced by the spate of IPOs this summer.
  • DesiLurker 8y ago
    Don't the IPOs have a six month holding for employees? if so they wont be able to cash out well into holiday season. edit:spelling
    • jfaat 8y ago
      It’s typically 90 to 180 days[0] [0] https://www.investopedia.com/ask/answer/12/ipo-lockup-period.asp https://www.investopedia.com/ask/answer/12/ipo-lockup-period... edit: removed ‘usually much shorter’ which was wrong. Parent stated the right timeframe and I mathed bad.
      • seattle_spring 8y ago
        It's usually 180 days, equal to 6 months and consistent with what the parent claimed.
    • mitchell_h 8y ago
      I'm not in the bay area....However I did recently buy a house. Banks are taking locked out stock, or even pre-ipo shares, as people's "gross value" in order to get people qualified.
      • fossuser 8y ago
        What banks? The banks I worked with to get qualified didn't value any of this above zero, they also didn't value tenant income. They did value whatever the max was you could borrow against your 401k.
        • TomVDB 8y ago
          That's unusual: whenever we got a new mortgage or refinanced (US Bank, Wells Fargo, Chase, ...), our rental income and the rental cost was included in the calculation.
          • fossuser 8y ago
            To clarify - tenant income from renting out one of the rooms of the place I'm trying to buy (not existing tenant income). Basically the peninsula is unaffordable to own alone, but if I could get a two bedroom and rent out a room I could do it (alternative is having to buy in SF a one bedroom for 780-875k). Banks don't let you do this though and without this I'm priced out of two bedroom units. I suspect you could create some new mortgage instrument that allows groups of friends to buy a house together since now we typically just do this via renting and splitting the cost for individual rooms (though I hesitate to suggest this since it would ultimately drive up prices even higher). It's also hard to find people willing to risk this, but I think a standard contract structure could go a long way to reducing the social risk.
            • refurb 8y ago
              though I hesitate to suggest this since it would ultimately drive up prices even higher I went to one open house in SF and the top floor was a nicely updated if small house. The basement/garage? The owner had put up walls to create 6 rooms and 2 bathrooms. The rooms were maybe 10'x10'? Apparently they rented them out to help with the mortgage. You could probably get $500-700/month for each or $3000-3600 for all six? And that's one reason why parking is an absolute mess in SF even if you get away from the city center. A lot of houses have one or more in-laws (many illegal). And no place to park the car in the garage!
            • roguecoder 8y ago
              You can absolutely get a joint mortgage with a friend: I did. The real challenge is finding someone you want to go in on a long-term coliving arrangement with, agree with on how to handle home maintenance and the like, and trust not to try to screw you over.
      • dontbenebby 8y ago
        Is the market for condos as insane as for houses? I think I'd be happy with a 1BR in someplace like SOMA where you can walk to everything you need. Conversely I'm not sure I'd want a long commute (across bay bridge, down South Bay, or in Marin) even if I could have a sweet house.
        • fossuser 8y ago
          It's a little better, I was looking in SOMA and 1BR is around 875k, but you might be able to find older stuff around 700k.
    • bradlys 8y ago
      From what I've heard from everyone everywhere on HN, banks are willing to give you a loan knowing you have a lot of stock in a big tech IPO. (Even if you can't liquidate for 6 months) I don't know how much you need but presumably more than the home is worth. I'd love to hear some real world examples of people doing this. I'm curious if you need 20% down because that alone will put most of these folks who have been living off their salary alone out. (You can't easily save 20% down in less than 10 years for a $2-4m home on a single startup salary)
      • PopeDotNinja 8y ago
        > From what I've heard from everyone everywhere on HN, banks are willing to give you a loan knowing you have a lot of stock in a big tech IPO That could have gotten me in trouble when I was younger. I had startup stock that traded at $50+ on the day of the IPO. When the lockup ended, the stock was trading at $12. At the time, I more likely to think the stock was going to $1200, not $12. I'd likely have ended up owing a bunch of money I couldn't pay off AND a big tax liability. If I were in that situation today, I'd see if I could find someone who would give me money at today's price and get N shares of stock in 6 months (the duration of the lockup period).
        • CydeWeys 8y ago
          It would've been bad for you, but the bank would've been OK. Mortgages are collateralized loans, so they'd just get the house, plus whatever money you had left, and it wouldn't be a big loss for them. I don't think you'd be able to get a non-collateralized loan based on putative IPO stock value.
          • PopeDotNinja 8y ago
            > I don't think you'd be able to get a non-collateralized loan based on putative IPO stock value. I've heard that people with a ton of stock can find people willing to work with them. If you have $100 million USD in HawtStartup, I'm sure someone who believes that stock is going WAY up would be happy to buy at today's price w/ some discount in 6 months. Kind of like how farmers sell futures. I'm not an expert on the subject, and I've never had the kind of equity locked up, so who knows.
    • usaar333 8y ago
      You can get lock-up loans from ibanks to secure down payments.
  • usaar333 8y ago
    No they aren't. Just look at affluent areas like Palo Alto which have fallen year-over-year: https://www.zillow.com/palo-alto-ca/home-values/ https://www.zillow.com/palo-alto-ca/home-values/ (or Atherton for that matter: https://www.zillow.com/atherton-ca/home-values/ https://www.zillow.com/atherton-ca/home-values/) I'm skeptical IPOs will affect the market outside SF or Northern San Mateo county, given almost all are SF-based companies [with your windfall, you are going to buy yourself a crap commute in a more boring area?]. Note that SF rents and pruchase prices have gone up a bit YTD, but other areas are flat to falling. (Finally, people/the media are way over-speculating how many people are going to start buying homes after an IPO. From my experience, going funemployed for a year or so was a more common thing to do with the windfall)
    • caprese 8y ago
      > with your windfall, you are going to buy yourself a crap commute in a more boring area? Exactly, I'm so glad Silicon Valley made it up to San Francisco for real this decade. This was always long overdue.
      • rubicon33 8y ago
        The struggle is real, aint it.
      • Nuzzerino 8y ago
        The one thing that bothered me most about the bay area was all the people who were more willing to live in cold, foggy, crowded, expensive SF AND deal with a commute to the area with nicer weather (south). Maybe they had family issues back home and have a need to live somewhere that is more "open minded" than anywhere else.
        • caprese 8y ago
          SF weather is neighborhood by neighborhood, with cold and foggy being ubiquitous only in the summer time, which is counterintuitive for tourists. It's anywhere from 58 to 72 degrees almost all times in parts of the city. Nice weather if you know where to look or have a particular preference. So maybe thats just a secret for you? But I do like areas that are warm at night time too, which SF is not.
  • jmoss20 8y ago
    From the article: > Bay Area real estate agents say the market has remained strong in certain areas — especially for starter homes listed at or below the region’s median sale price.
    • dsfyu404ed 8y ago
      >listed at or below the region’s median sale price. Price stuff to move and it moves. There's no surprise there.
  • almost_usual 8y ago
    The last thing I would want to do is buy a home in SF if I made a few million suddenly. It's still not cheap, you'll get killed on property taxes, the house will need work, it will also likely need an earthquake retrofit. If you're already on rent control you could invest it, travel for a long time, and do whatever you wanted. Unless you have a burning desire to buy immediately or hope to make money off SF real estate (Investment, Airbnb, etc) I don't think it really makes sense. It sounds ridiculous but a few million dollars doesn't actually go that far in SF if you're wanting to be a home owner _and_ retired. If you want to continue working I guess it would be fine but why would anyone want to keep working if they worked like crazy pre IPO? I suppose if you have a multi unit you could rent the space and live off of that income but now you've just decreased the value of your home significantly and you've taken on responsibility of being a landlord.
    • thorwasdfasdf 8y ago
      This. You'd think this is the perfect ticket out of here, they'd been waiting for. So many great cities in the US with much lower housing costs and no feces lining the streets.
      • kelnos 8y ago
        For me, what's keeping me in the bay area is my social circle. The thought of starting over (late 30s) socially in a new city where I only know 0 or 1 or 2 people... it sounds exhausting and lonely. Then again, with the money I'd be saving living in a more reasonable city, I could probably fly back here every weekend and still break even.
        • pertymcpert 8y ago
          Or go to London (assuming Brexit has some resolution) or Paris. Way better culture and interesting to live in.
    • refurb 8y ago
      This is really true. I keep an eye on the SF market and $1M will buy you a tiny home (1100 sq ft) that has had little to no upgrades in the last 30 years in a neighborhood that is still "up and coming". If you want what most middle class would regard as a nice home (1500 sq ft+, upgraded in the last 20 years, in a nice neighborhood), you're looking at $1.5M-$1.75M. Or with 20% down, a monthly payment (mortgage, taxes, insurance) of over $9,000+ per month or nearly 100% of the take home pay for a $200,000 a year job. Maybe it's just wishful thinking, but houses can't keep going up like that. Take a look at the historical Case-Shiller data for SF[1] and tell me it's not "bubble-like". SF will always be expensive (always has), but this seems ridiculous. [1]https://fred.stlouisfed.org/series/SFXRSA https://fred.stlouisfed.org/series/SFXRSA
• 01100011 8y ago
  I wonder if the trade tensions with China affected foreign sales? I think most professionals in the valley are smart enough not to buy at the peak of the market. They don't want to pay top dollar for a 60 year old pile of crap. Personally, I think of my time in the valley as limited. I can't retire here, so why would I want to buy? Also, I'm here to work, not care for a house.
  • chrischen 8y ago
    Yea pile of crap, and the knowledge that all that money isn’t really going towards infrastructure, government, or local economy, but to the lucky schmuck that was simply here before you. I would actually prefer high taxes in lieu of high real estate costs, since at least the money goes back to the public.
    • conanbatt 8y ago
      High taxes are the way rents are high. Because the landlords arent paying them: workers and consumers are. Thats why coffee is 5 dollars, a beer is 8, you have to lyft to work because the 2billion dollar transit station is closed, etc. Its not about high taxes vs low taxes, its about the right tax structure. SF collects 2800U$S per month per household in taxes!
      • overdrivetg 8y ago
        Do you have a source for your "SF collects $2800 per month per household in taxes" number? This Quora answer[1] suggests it's more like $3300/person/yr. The 2010 Census says SF has 345,811 households, or about 2.35 people per household. So $3300 * 2.35 / 12 =~ $650/mo/household in SF. [1] https://www.quora.com/How-much-does-San-Francisco-make-in-tax-revenue-compared-to-Oakland https://www.quora.com/How-much-does-San-Francisco-make-in-ta...
        • conanbatt 8y ago
          SF budget is 11 bill. That quora answer is from 2011. https://www.sfchronicle.com/bayarea/article/SF-s-budget-soars-by-937-million-and-will-top-12955416.php https://www.sfchronicle.com/bayarea/article/SF-s-budget-soar.... Even if you cut it inhalf for the general funds, it gives out 1400U$S per month.
• lsllc 8y ago
  Maybe the new Federal tax S.A.L.T. deduction limit?
  • dlubarov 8y ago
    Also the new 750k cap for the mortgage interest deduction.
  • shereadsthenews 8y ago
    Indeed. The prices rise and fall based on the buyer's monthly budget. Taxes go up, prices go down. Mortgage rates fall, prices rise.
    • sk5t 8y ago
      You'd think so, although doesn't this usually take a couple of years to happen?
      • shereadsthenews 8y ago
        It might take people a while to realize their taxes changed but mortgage rates are instant. The loan you can afford on a given payment goes up and down with the rate without delay. Since most people go house shopping with a preapproved mortgage this has an immediate effect on the market price of houses.
        • sk5t 8y ago
          This does not mean that RE prices react suddenly; it takes years, usually, and you see markets not clearing and inventory sitting around rather than price corrections. Otherwise there would have been plenty of RE steals to snatch up in 2008; yet, outside of one or two ridiculous areas, there weren't. Funny to be downvoted for noting sticky prices. I don't make the rules!
  • pcwalton 8y ago
    Higher interest rates too.
• notadoc 8y ago
  > The record streak of rising Bay Area home prices started in April 2012, when the median sale price in the nine county region was $425,000, according to CoreLogic. Over the next seven years, median sale prices have more than doubled, hitting a peak of $935,000 last May. Wild housing inflation is similar all along the west coast, with many areas doubling, tripling, or more in price over the past 6-7 years. All the more reason for tech companies and startups to look at other parts of the country. The midwest, south, northeast, are all so much more affordable.
  • closeparen 8y ago
    When tech companies have work that does not need to be done in the SF/NYC/SEA, they go straight to India, Eastern Europe, and (increasingly) Latin America. There is no role for mid-priced US cities. Which makes sense. They are trying to maximize human capital : cost ratio. Ordinary American cities are good at neither. You go for the highest human capital or the lowest cost. And in some dirt cheap places you can still find a bunch of underemployed people with STEM education.
    • aristophenes 8y ago
      Somebody needs to tell that to Austin, Texas, they don't seem to have gotten the message. Denver/Boulder too, though housing there is getting pretty high as well.
      • goobynight 8y ago
        Even if it seems high, you get a lot more for the money. $1700 will get you a luxury 1bd (600+sqft), new/recent construction, a pool, bbqs, "sky lounge", 5-20 minute walk to work, and so on. From what I can tell, it takes more than that just to get into a shitty box in SF.
        • hellisothers 8y ago
          True but you’re going to take a 30-40% paycut all to reduce your rent by $1000-$1500/mo. Rent goes down but a car and an xBox cost the same everywhere.
• thorwasdfasdf 8y ago
  We all know Supply is severely constrained. So, ultimately, it's all about demand which determined by how many employers are hiring. Have google and facebook cooled off their highering now that they may be facing potential regulations/being broken apart? Have other companies reduced their highering in the area?
  • refurb 8y ago
    It's not just supply of new homes, but also existing homes. Inventory for sale at any given time in the bay area is really low. Things like Prop 13 give people a LOT of incentive to stay put and not leave (until they are ready to never come back). Combine that with a small group with extremely high incomes and you've got a recipe for outrageous home prices.
    • tehlike 8y ago
      Or pass it on to their estate and never pay taxes on it.
  • Simon_says 8y ago
    I want to believe you, but you can't spell "hiring".
• stanski 8y ago
  Funny. That's not what the link says: "/bay-area-home-sales-dip-as-prices-continue-to-rise"
  • minimaxir 8y ago
    Headlines change for various reasons, but slugs are forever.
    • jolmg 8y ago
      They should've adopted an addressing scheme like StackExchange's where its numeric_id + '/' + descriptive_text. That way they could've changed the headlines and the links all they wanted. The server would've ignored the changing text and used the id.
    • toomuchtodo 8y ago
      Slugs should be GUIDs! :D
      • minimaxir 8y ago
        Slugs are one component of SEO.
        • toomuchtodo 8y ago
          Lots of unfortunate realities in life.
    • stronglikedan 8y ago
      > slugs are forever But with an HTTP 301, they don't have to be. ;-)
• ummonk 8y ago
  Article says sale prices dipped in San Mateo and Santa Clara counties, stayed flat in San Francisco, and rose in the East Bay and Marin county. We are likely just seeing the effects of the center of gravity for the tech industry shifting out of Silicon Valley towards SF.
  • joejerryronnie 8y ago
    That shift already happened 8 years ago, it's now shifting back to SV.
  • dilyevsky 8y ago
    Doesn’t explain why san mateo dipped. It’s pretty chill commute from here to the city. That maybe just increased supply...
• YeahSureWhyNot 8y ago
  similar trend in new york, I think housing prices reached their peak in 2018 and so far they are either flat or slightly falling. in some parts of the country they are not even back at pre 2008 levels, in other parts they have passed pre 2008 levels just recently. sounds about right. now lets wait for that market correction that 75% analysts predict will happen in next 2 years to happen
  • soVeryTired 8y ago
    > similar trend in new york Similar trend all over the english-speaking world. UK: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/january2019 https://www.ons.gov.uk/economy/inflationandpriceindices/bull... Ireland: https://www.daft.ie/report/2018-Q4-houseprice-daft-report.pdf https://www.daft.ie/report/2018-Q4-houseprice-daft-report.pd... Canada: https://housepriceindex.ca/#maps=c11 https://housepriceindex.ca/#maps=c11 Australia: https://tradingeconomics.com/australia/housing-index https://tradingeconomics.com/australia/housing-index My best guess is it's a rising interest rates thing. My second-best guess is that something has kicked off in China and it's slowly rippling through the world.
    • YeahSureWhyNot 8y ago
      didnt Australia have soft crash this year?
      • soVeryTired 8y ago
        I think they're down about 5% year on year, but after routine gains of 5% - 10% a year, I wouldn't really call that a soft crash. We'll see what happens in the coming months.
        • onlyrealcuzzo 8y ago
          It's not the percentage amount that matters, it's the rate of change -- which is enormous.
  • 8y ago
• ChuckMcM 8y ago
  From the article -- Alan Barbic, president of the Silicon Valley Association of Realtors, said agents on the Peninsula are working harder to sell high-end properties. “Without a doubt,” he said, some professionals have been priced out of the market. This is why I always cringe at articles that say "Nobody can afford to live there." The reality is that lots of people can "afford" to pay these prices, more than there are homes, hence the high prices. When people stop being able to afford the houses, or willing to pay high prices, guess what, the prices go down. When I bought my current home it was during one of the "downturns" when everyone said "Silicon Valley is dead, look at all the chip companies laying off people and going out of business!" And then the Internet became the new thing and the market rebounded. And then it crashed again and house prices went down, and then it rebounded again. Houses cost what people are willing to pay for them. And when people stop paying what is being asked, the price goes down. Speculation can hide some of that dynamic during periods of rapid price increases but a lot of speculators go broke and give up. We saw a lot of that during the mortgage meltdown. I think it is great that the prices have moderated. And I think the number of new housing units coming on line has helped that as well.
  • devoply 8y ago
    When you have a glut of capital it may not be the case that people are able to afford housing, it maybe the case that the wealthy have bought up a ton of investments; maybe not even local wealthy but foreigners. The best example of this is China or Vancouver where there is a glut of housing that no one can afford so it sits around empty... the people who paid for it don't have a problem with this.
  • drewblaisdell 8y ago
    > This is why I always cringe at articles that say "Nobody can afford to live there." The reality is that lots of people can "afford" to pay these prices, more than there are homes, hence the high prices. A classic example of engaging with semantics over sentiment. "Nobody" is clearly just a hyperbolic proxy for "only a relatively small number of people".
    • ChuckMcM 8y ago
• tibiahurried 8y ago
  Buying a house and settling in the Silicon Valley/SF/etc... does not make any financial sense whatsoever. They are all pretty much overpriced, crappy and old. Even the quality of the new "luxury condos" is crap. Seriously, take a closer look at the quality of the windows, walls, doors, floor, everything...it is all paper thin cheap stuff way overpriced. Not to consider taxes, earthquake and fire insurance. Cost of life, school, pre-school, daycare etc, they are all crazy expensive. Public transportation is nearly non-existent. Traffic is insane. People who live in SF wake up at 5.30am/6.00am to catch the bus and commute to the Valley oO. They spend at least 2hours if not more a day in traffic. The only thing that imo makes sense is to move there, save as much money as possible. Maximize your 401k and pension plan contributions. Don't work in scrappy startups for a low paycheck and stock options (most startups are doomed to fail or will never go IPO) but prefer instead bigger companies or close to IPO ones that have a good 401k matching plan, bonuses, incentives, and higher base salary. Get a new job every 2/3 years, so that you can increase your salary quickly + signing bonuses. Do this for ~10years and then move to a normal place where you could buy a super nice house in cash and then work remotely.
  • byebyetech 8y ago
    >> move to a normal place where you could buy a super nice house in cash and then work remotely. Can't you do that without doing time in Silicon Valley?
    • stuart78 8y ago
      Yes, but there is probably a lot of value in the network you build would would make those remote jobs easier to get.
      • bpicolo 8y ago
        There's definitely something to be said for the rate at which you can learn to be a strong developer in SV / similar tech hubs, because there's a lot of good mentors in the area to absorb knowledge from.
    • 8y ago
• Waterluvian 8y ago
  So this isn't the same as SV, but I grew up in Waterloo, Ontario. Which is kind of like Canada's SV. The prices have gone just mental over the past few years. We're looking at buying a house, and thanks to working remotely, I can live anywhere. The result is that by buying a house just 45 minutes down the highway from Waterloo, I get literally 50% more house for the same price. Location location location is just mental.
  • whttheuuu 8y ago
    "just" 45 minutes? God forbid you need to find another job in the city - thats a 1.5 hour a day commute. There is a reason why location location location has been a truism in real estate since forever.
  • gwbas1c 8y ago
    45 minute commute in Silicon Valley is considered normal. You'd be expected to show up everyday.
  • truebosko 8y ago
    Well duh, this makes sense. But 45 minutes out of the city you lose many of the perks -- easier and healthier (more walking, less car) access to shopping, food, services, etc. Do you have kids? I still don't understand the suburban escape when people have children. Going from a city with tons of services near you (for the kids!) to driving everywhere.
  • elevenoh 8y ago
    Yeah, I'm looking to buy a detached house in Waterloo. Doesn't show any signs of economic growth & RE prices slowing. But it doesn't seem surprising that those 45 mins away is opportunity/convenience cost worth an amortized $250k+ to many.
  • sonnyblarney 8y ago
    45 minutes from Waterloo is waaay out in the country. You should be able to 2x your home. The Waterloo spike is odd: you'd think the death of BlackBerry would hurt ... But the Canadian economy is built on 'housing mortgages', what's happening really I think is spillover from Toronto. A lot of folks are leaving Toronto and Waterloo is now having 'just enough appeal' for some: regular home prices, 1 hr from the city, less traffic etc.. And the 'appearance' of high tech.
• rixrax 8y ago
  If most 2019 Bay Area IPOs succeed, some say this will introduce over 10,000 new millionaires to Bay Area [0]. And most of them are unlikely to leave and quite a few will likely want to have a house. I can only guess how this will impact house prices. [0] https://www.google.com/amp/s/www.dailymail.co.uk/news/article-6790069/amp/Experts-predict-10-000-new-millionaires-San-Francisco-Uber-Lyft-public.html https://www.google.com/amp/s/www.dailymail.co.uk/news/articl...
  • randomacct3847 8y ago
    California makes it very expensive to stick around since you pay a lot of income tax if you sell. Of course some will stay but a low 7 figure windfall pre-tax will not get you much house, especially if you need a bigger house to start a family, and many will be tempted to not pay a state income tax by moving out of state.
    • toast0 8y ago
      Depending on what form your equity takes, California may still tax you if you leave. For ISOs, it's relatively simple, if you're a resident at the time of the Federal taxable event, it's a California event. For RSUs and NSOs, it's California taxable for the portion of vesting that is California sourced: the time where you were a California resident, or working in California. (Caveat: the rules are vague, you're required to use a reasonable method of apportionment and work days is documented as a reasonable method)
      • randomacct3847 8y ago
        Yes, mostly relevant for earlier employees of these companies that were awarded options that they’ve exercised but have not sold their shares (the taxable event)
  • JMTQp8lwXL 8y ago
    So that's 10,000 people and the city SF Bay Area has 7.15 million, and 880k live in SF proper. It doesn't sound like it'd make a very big dent in prices.
• beamatronic 8y ago
  I’d like to see a regressive analysis of how many Bay Area instant millionaires have already been created, over the last 15 years or so. Wouldn’t these folks help support the floor of home prices?
• chocolatebunny 8y ago
  The factor they kind of glossed over is the bumpy stock market last year. People who are looking to buy something in the bay area are going to sell all that company stock they've gained over the years to buy a place. So if the tech sector drops for a year then people are less likely to sell their stock to buy a home.
• charliebrownau 8y ago
  Everyone is finally getting red pilled and leaving the regressive LEFT areas and states in droves
• scurvy 8y ago
  Alameda County increasing while SF and the peninsula are flat to down should be ringing very loud alarm bells in people's heads. Alameda County is not a sophisticated buyers market. This same county was hit hardest and had the most foreclosures in 2008. Peak prices for this cycle folks. This is your loud and clear indicator.
  • jdavis703 8y ago
    The folks paying these peak prices do not seem to match the historic demographics of their new neighborhoods. While I agree we’re near the peak, I’m not sure that Alameda is the proverbial canary in the coal mine here.
    • scurvy 8y ago
      Gold Coast homes selling at 20% off list (if they sell). Socketsite has a great example. Alameda has peaked and you're screwed if you bought there in the last 5 years.
• diogenescynic 8y ago
  I don’t understand why anyone would buy a house here, even if they have the money. There are so many problems with the Bay Area that won’t be fixed for another generation—-open crime, quality of life, wanton theft and vandalism, open meth and heroin use, property crime worse than anywhere else in the country—-and the quality of housing is crap! Traffic, poor public transportation (still better than other cities, but not amazing), and an incompetent government that seems to thumb its nose at the working class here. Why not just buy five houses in the south of France or somewhere actually nice and liveable? I’m here for work and as soon as my nest egg is big enough, I’m getting out. Why buy a $2.5m condo and have to watch a homeless camp out your window? I just don’t really get it.
  • shostack 8y ago
    I think you are equating the entire Bay Area to the Tenderloin. I'm in the mid-peninsula. I've never lived somewhere safer and feel markedly safer after having lived in Chicago most of my life in nice neighborhoods.
    • diogenescynic 8y ago
      I don’t live in the Tenderloin and have these issues. But you’re right, it is a mostly San Francisco issue. It’s also bad in San Jose, Oakland, and Berkeley. Not as bad on the peninsula or in east bay suburbs like Walnut Creek.
• dawhizkid 8y ago
  On an average tech salary, it's relatively easy to save enough to buy a 1 bedroom condo after a few years. The homes that are the highest in demand, at least in SF, are single family homes, which average at least $2m.
• dpc_pw 8y ago
  No one mentioned the magnitude? "Resale home prices dropped year-over-year in February in Santa Clara County by 16 percent" "Santa Clara home prices fell from $1.29 million last February to $1.09 million this year," Doesn't -16% y/y qualify as "crashing" in the real estate?
• sonnyblarney 8y ago
  Macro note: the US still has arguably artificially depressed interest rates as a hangover from the last crash. Even though the economy has picked up, the Fed won't lift to normalized rates. Part of the idea was to re-inflate the value of people's homes after the 2008 crises to get everyone out from underwater but it will have bubbly effects elsewhere. We forget that these exceedingly low interest rates are a crazy thing, not usually considered consistent with any kind of regular economy. With the US at historically low unemployment rates, and the Fed still not willing to raise ... It's like eating sugar and Red Bull at every meal; you'll get ulcers in your California.