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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 marke

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.
      - overdrivetg 8y ago
        OK, I finally did what I think is the real, updated math: According to [1] from 2018, "Roughly half of the budget consists of self-supporting activities at the City’s Enterprise departments" So that leaves $5.5B in General Fund taxes. According to [2], in 2017 SF had 884,363 residents with 13.4% under 18, so 765,858 adult residents. $5.5B divided over 765,858 taxpaying adults is $7,181/adult/yr, or just under $600/mo. You can roll that up into households if you want, but it feels more illustrative to have the number be per taxpaying adult IMO. Having said that, I'll buy your $1,400/household/month number as being basically about right. I don't disagree with your point about high taxes, but I did want to actually see what the accurate numbers were. Thanks for the interesting discussion. I'm in LA so I ran the numbers down here for comparison... We turn out to tax at $262/adult/mo, so SF's effective city tax rate is about 2.3x vs Los Angeles. [1] https://sfmayor.org/sites/default/files/CSF_Budget_Book_June_2018_1_Final_REV1_LR.pdf https://sfmayor.org/sites/default/files/CSF_Budget_Book_June... [2] https://www.census.gov/quickfacts/sanfranciscocountycalifornia https://www.census.gov/quickfacts/sanfranciscocountycaliforn...
        conanbatt 8y ago
        > You can roll that up into households if you want, but it feels more illustrative to have the number be per taxpaying adult IMO. Having said that, I'll buy your $1,400/household/month number as being basically about right. My initial comparison was about rent, so household is what I wanted to compare to. When you get a studio apartment for 2000U$S, the state gets 1400U$S. And because they do not raise 1400U$S through property taxes, they are skimming you somewhere else, by taxes that affect your income in unclear ways (business taxes, sales taxes, etc). A landlord outside of san francisco, renting out that studio aprt, pays a fraction of the taxes that household consumes. Its a major distortion.
  - blang 8y ago
    The tax that gets passed along in rent is property tax, which in California is generally pretty low[1] compared to other states because of prop 13[2]. [1] https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/ https://wallethub.com/edu/states-with-the-highest-and-lowest... [2] https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13
    - conanbatt 8y ago
      Property taxes are not absolutely economically incident on rent, raising property taxes will affect renters in ambiguous ways. But sales taxes definitely punish workers (and lower the income the worse), while low property taxes favor landlords.
  - chrischen 8y ago
    But the high taxes merely a symptom of high property values, which are the root cause of the problem. Taxes are necessary or there would be no incentive to repurpose properties for maximum utilization. In fact SF property tax rates are lower than most other states. The problem is some sort of artificial constraint on property supply, making land both under-utilized and increasing its value to enrich the incumbent landowners! The bulk of the benefits goes to the landowners still—before, and during growth. Taxes ensure that current landowners cannot keep all the profit, but if they owned the land before the prices skyrocketed, they're still the main beneficiaries of all the cash flowing in.
    - conanbatt 8y ago
      > Taxes ensure that current landowners cannot keep all the profit, but if they owned the land before the prices skyrocketed, they're still the main beneficiaries of all the cash flowing in. If all the taxes SF levies were on the land, landowners would not make that much profits because it would strongly eat away at their earnings. High taxes are not a symptom of property values, high city spending is a cause not a symptom.
- philwelch 8y ago
  But it’s California! You can have both!
jeffFrom18F 8y ago
Hard to say what the peak is? I arrived here in 2015 and things seem overheated, but prices have just continued to climb. The tax changes seem like they should have dampened things but they haven't too much.
witcherchaos 8y ago
You forgot that Chinese economy crashed heavily last year and this year. In addition, Chinese government really stepped up the blocking of money transfer out of the country
sonnyblarney 8y ago
"I think most professionals in the valley are smart enough not to buy at the peak of the market." People don't know when the peaks are, that's the point. I lived in SF during the dot-com and everyone through prices were insane and were due to collapse any time.

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.
    - overdrivetg 8y ago
      OK, I finally did what I think is the real, updated math: According to [1] from 2018, "Roughly half of the budget consists of self-supporting activities at the City’s Enterprise departments" So that leaves $5.5B in General Fund taxes. According to [2], in 2017 SF had 884,363 residents with 13.4% under 18, so 765,858 adult residents. $5.5B divided over 765,858 taxpaying adults is $7,181/adult/yr, or just under $600/mo. You can roll that up into households if you want, but it feels more illustrative to have the number be per taxpaying adult IMO. Having said that, I'll buy your $1,400/household/month number as being basically about right. I don't disagree with your point about high taxes, but I did want to actually see what the accurate numbers were. Thanks for the interesting discussion. I'm in LA so I ran the numbers down here for comparison... We turn out to tax at $262/adult/mo, so SF's effective city tax rate is about 2.3x vs Los Angeles. [1] https://sfmayor.org/sites/default/files/CSF_Budget_Book_June_2018_1_Final_REV1_LR.pdf https://sfmayor.org/sites/default/files/CSF_Budget_Book_June... [2] https://www.census.gov/quickfacts/sanfranciscocountycalifornia https://www.census.gov/quickfacts/sanfranciscocountycaliforn...
      - conanbatt 8y ago
        > You can roll that up into households if you want, but it feels more illustrative to have the number be per taxpaying adult IMO. Having said that, I'll buy your $1,400/household/month number as being basically about right. My initial comparison was about rent, so household is what I wanted to compare to. When you get a studio apartment for 2000U$S, the state gets 1400U$S. And because they do not raise 1400U$S through property taxes, they are skimming you somewhere else, by taxes that affect your income in unclear ways (business taxes, sales taxes, etc). A landlord outside of san francisco, renting out that studio aprt, pays a fraction of the taxes that household consumes. Its a major distortion.
- blang 8y ago
  The tax that gets passed along in rent is property tax, which in California is generally pretty low[1] compared to other states because of prop 13[2]. [1] https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/ https://wallethub.com/edu/states-with-the-highest-and-lowest... [2] https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13
  - conanbatt 8y ago
    Property taxes are not absolutely economically incident on rent, raising property taxes will affect renters in ambiguous ways. But sales taxes definitely punish workers (and lower the income the worse), while low property taxes favor landlords.
- chrischen 8y ago
  But the high taxes merely a symptom of high property values, which are the root cause of the problem. Taxes are necessary or there would be no incentive to repurpose properties for maximum utilization. In fact SF property tax rates are lower than most other states. The problem is some sort of artificial constraint on property supply, making land both under-utilized and increasing its value to enrich the incumbent landowners! The bulk of the benefits goes to the landowners still—before, and during growth. Taxes ensure that current landowners cannot keep all the profit, but if they owned the land before the prices skyrocketed, they're still the main beneficiaries of all the cash flowing in.
  - conanbatt 8y ago
    > Taxes ensure that current landowners cannot keep all the profit, but if they owned the land before the prices skyrocketed, they're still the main beneficiaries of all the cash flowing in. If all the taxes SF levies were on the land, landowners would not make that much profits because it would strongly eat away at their earnings. High taxes are not a symptom of property values, high city spending is a cause not a symptom.
philwelch 8y ago
But it’s California! You can have both!

jeffFrom18F 8y ago

Hard to say what the peak is? I arrived here in 2015 and things seem overheated, but prices have just continued to climb. The tax changes seem like they should have dampened things but they haven't too much.

witcherchaos 8y ago

You forgot that Chinese economy crashed heavily last year and this year. In addition, Chinese government really stepped up the blocking of money transfer out of the country

sonnyblarney 8y ago

"I think most professionals in the valley are smart enough not to buy at the peak of the market." People don't know when the peaks are, that's the point. I lived in SF during the dot-com and everyone through prices were insane and were due to collapse any time.