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Housing in SF/SV is in trouble. Last week alone we had Twitter (3700), Stripe (1000), Lyft (700), Opendoor (550), and now FB (probably 5000). Obviously not ever
by datalopers 4y ago
Housing in SF/SV is in trouble. Last week alone we had Twitter (3700), Stripe (1000), Lyft (700), Opendoor (550), and now FB (probably 5000). Obviously not every employee resides in that region but it's a good ~40% of the workforce [edit: of these companies].
- paxys 4y agoOne can only hope, but Bay Area housing survived the 2008 bubble and whatever is happening now is peanuts compared to that so far.
- adam_arthur 4y agoTech wasn’t hit very hard in 08, nor was it nearly as large a part of the economy. CA housing was hit hard though. Yes. LA was one of the worst hit
- sahila 4y agoYeah but prices have dramatically increased since 2008, I want to say 2-4x or more based on my anecdotal data.
- deleted 4y ago[deleted]
- rr808 4y agoTrue, but balance that with people coming back to the office. I'd think AirBnBs in Tahoe are definitely in trouble!
- omnimus 4y agoAre you saying about 10 000 are 40% of the workforce of SF/SV? So workforce in SF/SV is 25 000?
- dividefuel 4y agoI think they are saying 40% of those laid off are in SF/SV.
- omnimus 4y agoAh yeah that makes sense!
- mschuster91 4y agoNot of the total workforce, but "the workforce that earns enough to be able to afford thousands of dollars a month in rent alone". If enough "big tech" people get laid off and are forced to move away because they can't make rent, eventually rental markets should cool down first, and secondary the ownership markets.
- daveevad 4y agoAdmittedly biased Bay area resident myself, but the fundamentals of the housing markets remain from my perspective: this part of the country has the best climate and natural beauty. Over the longer term, I'm not too worried about housing prices but these next couple of years could be brutal. I'd be curious to hear alternate contenders for the climate, landscape claims of mine if anyone's game.
- alliao 4y agojust curious, are most buildings built for the big one? or is it more let the quake shake down the weak mentality
- vinyl7 4y agoClimate doesn't matter much when people can't afford a mortgage payment on a tiny house that costs several million dollars
- ghaff 4y agoThere are a lot of reasons the Bay Area is desirable--especially if you're someone who appreciates outdoor activities and natural beauty. But most people also need jobs and at least somewhat affordable housing. If snowbelt or desert cities do a better job of providing those, climate and natural beauty only go so far for a lot of people--especially if they don't otherwise have strong connections to the area.
- rr808 4y agoThe other thing has changed is interest rates. Fundamentals @ 7% mortgages really aren't great either.
- plasticchris 4y agoBut that’s not what drove the prices - housing prices were basically the cost of accessing the labor market.
- FfejL 4y ago7.7 million people live in the Bay Area. Your 40% estimate is off by several orders of magnitude.
- deleted 4y ago[deleted]
- orpheansodality 4y agoFor twitter, here are the actual number for the bay area, according to state filings[0] * SF: 784 * San Jose: 106 Still high numbers IMO but SF for example has ~800k residents, so this only represents ~0.1% of the total population. Not super convinced yet that it's going to have any immediate impact on housing in the city unless this triggers a much larger avalanche of firings that don't have an associated swarm of smaller companies waiting in the wings to pick good employees up at a discount. [0] https://www.sfchronicle.com/bayarea/article/Here-s-how-many-Twitter-employees-were-laid-off-17560274.php https://www.sfchronicle.com/bayarea/article/Here-s-how-many-...
- rco8786 4y ago> Not super convinced yet that it's going to have any immediate impact on housing in the city It's not "Twitter layoffs cause issues" - it's more that if you can identify 5, 10, 15+ well known companies doing layoffs concentrated in that area there is probably also a very long tail of smaller companies doing layoffs also. Cumulative effect of it all can be quite large. > ~40% of the workforce This is an enormous exaggeration. However, even a 4-5% reduction in jobs in the area can have an enormous effect on the economy and housing market.
- dekervin 4y agoI think the 40% number was about the ratio of people let go that reside in SF.
- andrejc 4y agoHow does ~1000 represent 0.001% of 800k?
- orpheansodality 4y agowhoops decimals mixup, will edit: 784 / 815,201 = 0.00096 = 0.1%
- bombcar 4y agoHousing is a very "tipping point" thing - if there are 100 houses for sale and 101 buyers, prices will rise until one buyer drops out. If there are 100 houses and 99 buyers, prices will drop until another buyer appears or a seller takes a house off the market. It's not exact, but small changes can have large effects. However SF likely has a huge waiting list of people who would like to move in, so it's not likely to take effect immediately.
- whiplash451 4y agoIt’s not like the laid off people will run out of the area the next day en-masse. All have some kind of ties there.
- jacurtis 4y agoAnd there’s plenty of other companies ready to scoop up the talent. Most these laid off employees will have job offers within a month.
- datalopers 4y ago> And there’s plenty of other companies ready to scoop up the talent 1) Tech job openings have fallen by ~50% since a year ago 2) Total comp packages are materially lower, creating a strain on people's ability to pay for their housing
- Firmwarrior 4y agoI think this is a little different from the fake recession talk in 2020, where HR and thrifty managers tried to scare people into accepting less money There are still great jobs out there, but you can't just bang out a day of Leetcode and collect a batch of $600k offers at the moment
- datavirtue 4y agoAhh...the great billionaire collusion WFH reset.
- alliao 4y agothe least they could do to end WFH is monitor and manage indoor air quality. 500ppm CO2 OR 222nm UVC so it's at least safer to go back in the office. right now it's a plumes of covid indoor and it's just matter of when for repeat infections; who'd want that.
- kamaal 4y agoPlenty of other companies can't pay half a million dollars to center a div either. Lots of people will lose visa status, homes, cars etc.
- paxys 4y agoWhat does the 40% number have to do with anything? A company can lay off 100% of its workforce but it won't affect the local Bay Area market unless it makes up a significant number of its ~8 million population. A few hundred or even a few thousand people aren't going to move the needle.
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- abeppu 4y agoTo the degree that housing in the area is in trouble, I still have to guess that the impact of the recent large layoffs must be dwarfed by the impact from interest rate changes. Of the people that still have jobs and feel secure in them, their cashflow will still get them much less house than a year ago. For those that had some form of equity compensation, the value of that has probably dropped sharply. I.e. people who would otherwise be potential home-buyers will be making significantly smaller offers, even if they still have jobs. I think there are a number of recently completed or near-completion condo buildings that are going to be in trouble, having been planned around sale-price expectations which now seem hard to reach. But in the broader and longer-term view, doesn't the fact still remain that we have too little housing in the region?
- datalopers 4y ago> I still have to guess that the impact of the recent large layoffs must be dwarfed by the impact from interest rate changes Two sides of the same coin. It'll be brutal. Bay area home prices will fall by at least 40% from 2021 highs by end of 2024.
- metadat 4y agoHow do you arrive at 40%? The peninsula has never experienced such a drastic decline since.. ever. Even through the dotcom bubble and 2008 financial crisis.
- Firmwarrior 4y agoHe's just trying to make me happy by telling a beautiful fantasy tale "And you'll have a yard without committing to a 3 million dollar investment!" Oh well, back to patching the grout on my dilapidated million dollar shithole condo..
- metadat 4y agoYeah, I'm still going to buy that house this quarter. Not too worried about the long-term value, there is literally no more land area to develop in the western region of the Bay Area.
- deleted 4y ago[deleted]
- woeirua 4y agoIt’s going to take time for this to materialize. Presumably laid off engineers have access to significant reserves, many of them will be able to ride out a short term period of unemployment. Now, if this turns into a torrent of layoffs across the Bay Area, then those engineers will be looking at long term unemployment, at which point we’re going to see short sales, foreclosures, etc.
- solardev 4y agoGood!! Maybe regular people will be able to live there again.
- School-Cotton 4y agoWouldn’t lower demand for housing be a good thing?
- MarkSweep 4y agoBesides the layoffs directly, the stock prices going down could cause people to get into trouble. Facebook had a program where you could get a mortgage that took into account your RSU income. Now that the stock is down 75% from a year ago, I would guess some people could have trouble paying their mortgage.
- twelve40 4y agoit would be interesting to see how many of those layoffs target remote people (all those places, not just twitter). not sure where to find this data. Clearly, for twitter at least "remote work forever" turned out to be a trap. Anecdotally from my linkedin feed many layoffs were remote. Again, I don't know where to find real numbers on this, and I don't make any claims or judgements, just observing.