5 ms·

I really enjoyed the history of Detroit but; > Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office par

I really enjoyed the history of Detroit but; > Eventually Silicon Valley will end up like Detroit, with abandoned 4-over-1 condo complexes and empty office parks where the software industry once stood. This implies that there's a glut of housing that's been created to home Silicon Valley technologists, which couldn't be further from the truth.

sroussey 6y ago
Yeah, I think the worst case is that Victorian houses divided into 4 condos revert to being a single house again.
nostrademons 6y ago
The housing glut hasn't been constructed yet. Most of Detroit housing stock dates from 1925-1945, which puts it at least 5 years out.
- burlesona 6y ago
  There is absolutely zero chance of a housing glut in California. The regulatory environment is so violently opposed to housing that the vast majority of people who live there could never afford to move. When the end comes, I think it is more likely to be because some thing finally tips such that people leave the area and (because houses are priced at the margins) prices begin to actually drop. Once that happens there could easily be a rush for the exits, as nobody wants to be upside down on a $2 million loan.
  - nostrademons 6y ago
    That scenario has happened repeatedly - 91-94, 01-02, 08-11, and now from 2018-present. It usually plays out as a ~10-25% drop in housing prices over a few years as the market exhausts itself, followed by a resurgence as wages & demand starts catching up again. https://havengroupsf.com/wp-content/uploads/2017/12/30-years-of-san-francisco-bay-area-real-estate-cycles.jpg https://havengroupsf.com/wp-content/uploads/2017/12/30-years... The way I think a glut could arise is when a tipping point is reached and pro-housing renters outnumber NIMBY owners on city councils. This has happened already in Mountain View (which was notoriously anti-development until a group of young pro-housing Googlers packed the city council and voted out all the NIMBYs in 2014, and now green-lights nearly any housing development), Sunnyvale, Redwood City, and San Mateo, and may make its way down to San Jose and up the rest of the peninsula. At present a lot of Bay Area communities are starting to look more like Paris: dense ~4 story apartment buildings, public squares, outdoor dining on pedestrian thoroughfares, etc.

sroussey 6y ago

Yeah, I think the worst case is that Victorian houses divided into 4 condos revert to being a single house again.

nostrademons 6y ago

The housing glut hasn't been constructed yet. Most of Detroit housing stock dates from 1925-1945, which puts it at least 5 years out.

burlesona 6y ago
There is absolutely zero chance of a housing glut in California. The regulatory environment is so violently opposed to housing that the vast majority of people who live there could never afford to move. When the end comes, I think it is more likely to be because some thing finally tips such that people leave the area and (because houses are priced at the margins) prices begin to actually drop. Once that happens there could easily be a rush for the exits, as nobody wants to be upside down on a $2 million loan.
- nostrademons 6y ago
  That scenario has happened repeatedly - 91-94, 01-02, 08-11, and now from 2018-present. It usually plays out as a ~10-25% drop in housing prices over a few years as the market exhausts itself, followed by a resurgence as wages & demand starts catching up again. https://havengroupsf.com/wp-content/uploads/2017/12/30-years-of-san-francisco-bay-area-real-estate-cycles.jpg https://havengroupsf.com/wp-content/uploads/2017/12/30-years... The way I think a glut could arise is when a tipping point is reached and pro-housing renters outnumber NIMBY owners on city councils. This has happened already in Mountain View (which was notoriously anti-development until a group of young pro-housing Googlers packed the city council and voted out all the NIMBYs in 2014, and now green-lights nearly any housing development), Sunnyvale, Redwood City, and San Mateo, and may make its way down to San Jose and up the rest of the peninsula. At present a lot of Bay Area communities are starting to look more like Paris: dense ~4 story apartment buildings, public squares, outdoor dining on pedestrian thoroughfares, etc.