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This is going to have a slow, but material impact on house prices in the Bay area over the next few years.
by tsycho 6y ago
This is going to have a slow, but material impact on house prices in the Bay area over the next few years.
- wobbly99 6y agoUpward or downward?
- three_seagrass 6y agoI would say downward because it's decreasing the demand to be close to these giant tech company campuses, but the bay area housing market has and always seems to defy typical economic patterns for housing. Throw in unemployment and upcoming inflation with the fed cash dump, and it's still very unpredictable.
- chrisseaton 6y agoBut at the same time people will want nicer homes as they're spending more time in them... I guess people living without gardens are pretty stressed right now.
- three_seagrass 6y agoPeople are not buying nicer homes for a temporary shutdown. I have coworkers video conferencing from a desk in a closet and don't care.
- ghaff 6y agoThe question though is about a "new normal" where people work from home a large chunk of the time--and, yes, if your apartment isn't just a place you sleep I think that affects the decision-making of a lot of people about where they live. I don't really see coworkers videoconferencing from closets but, then, most of us aren't in unusually high CoL areas.
- untog 6y agoCounterpoint: I'm a parent and I very much care. I won't be moving to the suburbs tomorrow but it has us asking questions about our ideal life: if we're not taking the subway into the office every day then maybe city life isn't quite as worth it.
- three_seagrass 6y agoCounterpoint: Would you take out a new 30-yr mortgage right now to buy a home in the suburbs? Then why aren't you? That's my point.
- chrisseaton 6y agoHmm I disagree I think many people have heavily optimised for never needing to be in their home except for sleeping. They work in an office, they work out at a gym, they eat out every meal, their do their laundry at work, public parks are their green space... and this probably now looks like a very a bad idea for the long-term, even if this particular situation clears up quickly.
- devdas 6y agoNot really. I find apartment blocks without an enclosed garden to be annoying, but other than that, it doesn't matter too much.
- ericmcer 6y agoHow do you imagine proximity to work becoming irrelevant affecting housing prices around job hubs?
- economicslol 6y agoClearly downward? If you don't have to work at an office in the Bay Area why would you continue paying $3K/mo in Rent or praying your startup has a good exit so you can pay $1M cash for a starter house?
- exmadscientist 6y agoNot clear at all. Effective WFH requires a bigger house, which would tend to favor remote areas. But partial WFH, where you're still in the office ~1 day/week on average, will push for _both_ larger and closer housing.
- bradleyjg 6y agoAn hour and a half commute five days a week is a brutal grind. Once a week it doesn’t sound so bad.
- ghaff 6y agoDefinitely. The Bay Area is a bit tougher to get out of really expensive housing depending upon where you work. But I'm (at rush hour) something like 90 minutes out of Boston whether driving or rail/subway. And housing is, if not depressed Midwest cheap, pretty reasonable in many towns that far out. That is, as you say, pretty brutal daily--which I never really had to do even when I worked in the city. But it's only a mild PITA once a week or so.
- Mvandenbergh 6y agoNot to mention that if you're in a day a week for specific meetings (vs it being your "office" the expectations about when you will arrive there are different. You may be able to travel during quieter hours which can be faster and less stressful.
- pmiller2 6y agoI WFH "effectively" in an 800 sq foot apartment. If I didn't have a dog, I could probably do so in less space.
- aantix 6y agoAgree. I think you’ll still have young workers coming to the city. But there’s less pressure to stay once you establish contacts and a solid job.
- ghaff 6y agoI tend to agree although there are a lot of factors at play. -- Obviously, the overall employment situation, in tech, in the Bay Area, and elsewhere. Unemployed people who don't otherwise have roots in the Bay Area aren't going to hang around and pay current rents there. -- The degree to which companies relax WFH policies but still want employees to come in on a semi-regular basis. -- The degree to which other companies decide that it doesn't matter where at least some employees live so long as they're available for video calls and other synchronous communications during regular working hours. (And what the salary impact is for those who don't live in higher CoL areas.) -- Anecdotally, at least in public, a lot of execs in "tech" and elsewhere seem to be a lot more open to at least partial remote work.
- gnopgnip 6y agoHow this affects hiring is another big factor. If you WFH 100% of the time but need to find a new job you are limited to other 100% WFH
- ghaff 6y agoYes. There often tends to be a conflation between "Remote within a reasonable timezone" and mostly WFH but able to drop in for meetings once every week or two. But the two cases are actually pretty different in terms of where you can live. The latter means you don't need to have an easy commute but you still need to be in a 1-2hr driving range. That said, I don't live in the Bay Area.
- notJim 6y agoIs this true? I would assume most places are hiring with the assumption that office workers will return to the office once we get through this. The company I work for is certainly hiring under this plan. Speaking to my coworkers, most of them are not happy to be working from home. I work at a company where remote is an option, so those who wanted to already were.
- illumin8 6y agoI'm curious how you think this is going to play out. Obviously it seems like house and apartment prices in SF city will suffer, but do you think we'll see a jump in house prices on the peninsula and in the suburbs like east bay? We rent in east bay and I consider ourselves fortunate to have a yard and a pool. I can only imagine that it will become more desirable to live in suburbia than in the city, but it sure would be nice if a lot of people leave the bay area entirely to help the housing demand get down to a reasonable level, at which prices can start to get back to normal.
- fasteddie31003 6y agoThis pandemic has hastened my plans to move to Tahoe. The lockdown takes all the benefits of city living away.
- Florin_Andrei 6y agoI understand, but I must state the obvious - the lockdown is not forever.
- deleted 6y ago[deleted]
- ghaff 6y agoNo, but the long term effects are unpredictable. I certainly wouldn't encourage anyone in a city to pack up and move to rural Alaska because of the situation. But I suspect many people on the fence about living in this or that city and going through a rough period of city-living will take this as a call to move elsewhere.
- mrfusion 6y agoIt’s not ending any time soon. And there might be rolling lockdowns going forward.
- shortandsweet 6y agoWhy Tahoe? I'm on the NV side. Super crowded.
- fasteddie31003 6y agoI've already got land on the Donner Summit to build a house. Starting this summer. It's a lot less crowded than Oakland.