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San Francisco Homeowners Lose $260B in Value
- meghan_rain 3y ago[flagged]
- whitemary 3y ago[flagged]
- teaearlgraycold 3y agoGood news for home buyers!
- bottlepalm 3y agoNot really the interest rates are unaffordable for anyone that needs to take out a loan to buy their first house. Great for cash buyers...
- deleted 3y ago[deleted]
- akavi 3y agoBigger opportunity cost for cash buyers...
- option 3y agohave you been to SF recently though? Would you like to raise a family there?
- throw03172019 3y agoDefinitely not downtown but there are many nice pockets for families.
- teaearlgraycold 3y agoYes. Depends where.
- cornfutes 3y agoIf houses in hot markets truly had economic / inherent value, for example the quality of life improvement / job opportunities, then that can’t really be lost.
- rcme 3y agoJob opportunities in the bay have clearly soured over the last year. So yes, real value has been lost.
- tomashertus 3y agoThe article nitpicks on some of the most pressing issues that were so many times discussed. But I find this bit to be absolutely hilarious: > In 2018, the city created a pooper scooper team, each member of which received annual compensation of about $211,000 that year. Given the inflation that has occurred since that time, scooper compensation may be close to $250,000 per year today.
- pokstad 3y ago[flagged]
- bo-tao 3y agoDo NYC have this team? When I went there I saw a couple massive shits on those covered sidewalks
- woodruffw 3y agoThat's covered by DSNY's mandate. However, most waste on sidewalks in NYC is from pets, not humans (this doesn't make it better, obviously).
- thelastgallon 3y agoReminds me of this scene in Billions: https://youtu.be/JLISv6WcUVY https://youtu.be/JLISv6WcUVY
- personjerry 3y agoNo way that's real right? That's more than junior engineers at FAANG
- grantism 3y agoDo junior FAANG engineers have to pick up human waste? IMO, "dirty work" deserves the paycheck.
- 3y ago
- camel_gopher 3y agoSo that’s why they are still going for over asking
- fnord77 3y agobought my condo in 2018. in the wrong part of town redfin says I'm down 30% at least debating whether to cut my losses - with tech companies gone, mass transit on the brink, and the city in a tailspin, I have this nightmare scenario in my head where prices end up 1/10th of what I paid
- notyourwork 3y agoWhich area? I lived in Mission bay for 5 years.
- fnord77 3y agosoma near YB
- deleted 3y ago[deleted]
- Shekelphile 3y agoIt's not a loss of 30% if the 5+ years you have lived there have been trouble free. Just normal depreciation.
- fnord77 3y agoit was until the pandemic. I picked that area for a very short commute, a 10 minute walk. It was great. Then the pandemic happened, everyone is working from home and the area is barren ghost town now at the time soma was selling for as much or more than premium neighborhoods. lesson learned. Now those areas have actually appreciated
- dilippkumar 3y ago> In 2018, the city created a pooper scooper team, each member of which received annual compensation of about $211,000 that year. Given the inflation that has occurred since that time, scooper compensation may be close to $250,000 per year today. I needed to read this to convince myself that I’m not asking for or expecting outrageous compensation at work.
- vlovich123 3y agoThis is grift masquerading as public services.
- ryanSrich 3y agoThat’s actually more than several engineers I know who work in the bay. What a wild wild city SF is (and not in a good way).
- Rebelgecko 3y agoKeep in mind that figure includes health insurance, retirement contributions, payroll taxes, etc. They might only be making $100k per year, which is nice but not enough to ball out in SF
- snotrockets 3y ago$71k (see https://www.businessinsider.com/san-francisco-poop-patrol-employees-make-184000-a-year-2018-8 https://www.businessinsider.com/san-francisco-poop-patrol-em...)
- Rebelgecko 3y agoYup, looks like even in 2022 their salaries are <$100k: https://transparentcalifornia.com/salaries/search/?q=Sewer%20Maintenance%20Worker&y=2022&a=san-francisco https://transparentcalifornia.com/salaries/search/?q=Sewer%2...
- StrangeATractor 3y ago
- foota 3y agoI've thought often about the economic power of a large number of well compensated people, but this is staggering "Between 2019 and 2021, San Francisco lost nearly $15 billion of household income, even after accounting for those who moved into the city."
- notyourwork 3y agoThat surely will have local repercussions, I don’t see how it couldn’t. The tax revenue and local spend changes have to be hammering local business.
- foota 3y agoI'm tempted to think that the impact on the tax base is the larger piece here, since wealth at some point doesn't contribute that much more to local businesses (e.g., I think the number of people is more relevant for business impacts, whereas the income is more relevant to taxation). I'm also not sure how this accounts for changes in income, as in maybe the people leaving are simply more senior than those coming in, amd this could be a normalish situation? E.g., if there's some normal increase in income levels of people staying in the city and then some portion of very well compensated people leaving, there could be an equilibrium. The missing piece then is the change in income for people that didn't move.
- snotrockets 3y agoThe expectation that homes won't deprecate like most assets do is an anomaly.
- EMCymatics 3y agoLocal and state governments suck every drop out of the three legged stool. Poor planning really.
- conductr 3y agoIt’s not really depreciation, it’s the absence of surge pricing
- joegibbs 3y agoIs it though? The homes themselves do depreciate (nobody wants a 1970s house with no aircon that hasn't been repaired or renovated), it's just that the price of the land which the house is situated on increases faster, because it's not like the land loses any value from having somebody live there. The more people move into an area, the more demand there is for that land, so the more its price increases. The only reason you'd expect the price to decrease would be because people don't want to move there anymore because of new areas that are more desirable or something negatively impacts the desirability of the area.
- Shekelphile 3y agoThis logic only works if you ignore the fact that housing prices have been juiced even in areas experiencing population decline and economic blight. I live in upstate NY and housing prices have tripled in my town despite no actual growth occurring here in decades, with more entry level jobs evaporating here every few years with local industries continuing the trend of closing up shop. It's also highly dubious that any land in SF can be considered higher value due to the rampant crime issues. I really don't understand how anyone would want to buy a home or live in one where there a daily risk to waking up to a home invasion, your car being pilfered through, literal human shit on your doorstep, etc. All in a place where cost of living is 2-3x higher than nearly every other part of the country. It's laughable.
- bottlepalm 3y agoThe government can only keep interest rates artificially high for so long. Once they go down again, housing prices are going to explode. There's no way to reverse printing 13 trillion dollars in corona stimulus.. the damage has been done.
- ryanSrich 3y agoThe housing market is unique in that interest rates did absolutely nothing to housing prices. But it was entirely expected. When you couple low supply with people who have 2-3% interest rates, you create an absolutely massive shortage on the supply side. Why would a current home owner EVER sell their house right now? Not only are the prices outrageous, but you’ll be paying 7% interest. Even if you have to sell, you’re better off renting and picketing the difference. It’s madness.
- conductr 3y agoI think the market is pretty locked due to this and akin to having no liquidity.
- Finnucane 3y agoA Hoover Fellow, I presume?
- tsunamifury 3y agoAs pointed out in the article the lions share of losses are in Pac Heights and Nob Hill due to the outsized prices already there. I rent a home there that fluctuates between 7 million and 5 million over the course of the pandemic and I watched a neighbor poor over 100! Million into a house when he thought things were only going up. That being said most people here don’t ever sell really. You just hold and buy another home someplace else. It’s a funny place. So the loses are not real until they are realized. That being said I don’t think the city is headed in a positive direction anytime in the next 5 years.
- throw03172019 3y agoWhat kind of home did he get for 100 million?
- tsunamifury 3y agoHe purchased it for 25 million and poured another 100 million into it. But it is the most impressive home in San Francisco. Right across from the Lyon steps. You can’t miss it. The only one that you have to crane your neck to see all 5+ stories of it.
- snake_doc 3y agoThe Redfin YoY price change he quotes is a median price change. He then extrapolates a median price change on the entire market to calculate the “$260B” change in asset valuations. That is dubious at best for a monthly volume of ~500 sales…
- n_eutrino 3y agocompared with Seoul and Hangzhou, this 16.7% seems such a mild decline.
- spicyramen_ 3y ago[dead]
- woodruffw 3y agoAs with previous articles from this source[1], this article contains misleading editorializations: the "pooper scooper" compensation number includes the government's retirement and insurance obligations, and doesn't reflect anywhere close to actual take-home pay[2]. I'm not a SF resident, and have no particular loyalty to it (or any particular interest in defending its municipal policies). But the author (and publication at large) seem to be interested primarily in gleeful portrayals of SF's collapse, with factuality as a distant concern. [1]: https://news.ycombinator.com/item?id=35857223 https://news.ycombinator.com/item?id=35857223 [2]: https://www.businessinsider.com/san-francisco-poop-patrol-employees-make-184000-a-year-2018-8 https://www.businessinsider.com/san-francisco-poop-patrol-em...
- rahimnathwani 3y agoPublic employees typically receive a larger portion of their total compensation as retirement benefits, than do typical employees at private companies. Given this difference, it seems like it would be misleading not to quote total compensation.
- woodruffw 3y agoThe misleading nature is the implication that SF's public servants are, on average, taking anywhere close to 200k in TC home. We can have a conversation about pensions and retirement funding if you'd like, but that isn't mentioned anywhere in the article. Instead, the article moves to imply that city employees are lining their pockets, when they aren't.
- anthlax 3y agoI’ll be moving to SF in the next month. Anecdotally rents are still hovering at ~3.3k in the mission to ~4k in e.g polk gulch. 1b1b, 750sqft
- gleenn 3y agoIf you own a home, and it goes up in "value" 50%, and then back down without you ever selling, does that mean you "lost" that 50%?
- 10u152 3y agoOf course not, it's just a good headline. Only if you bought or sold or used them for leverage.
- onion2k 3y agoYes. Its more obvious with something tangible. If I give you a $100 bill, and then you drop it down a drain, have you lost it? Of course you have. The same is true for the value of assets though. You had the opportunity to cash it in by selling, you could have secured a loan against the value, you had the status of the wealth of owning a more expensive home. Those things have real implications on your life, and now you don't have them. It doesn't really matter that it's not actual cash.
- birken 3y agoYou always need somewhere to live, so you can only "sell high" if that means you can "buy low" somewhere else. If all bay area houses go up 10%, then you haven't actually gained anything assuming you still want to live in the bay area. You also lose at least 5-6% of the value of real estate every time you buy or sell. So given that buying/selling real estate is complicated and expensive, and moving is complicated and expensive, for the vast majority of people, the value of the house going up and down _in the short term_ is mostly irrelevant.
- gleenn 3y agoI still have this hard feeling that the never-ending cycle of increasing home value isn't fed by an over-zealous US house pricing phenomenon. There is definitely scarcity, but why does housing fundamentally increase in value so dramatically over relatively small periods when nothing fundamentally changed of the property.
- dmingod666 3y agohousing as an asset/investment who's value needs to keeps rising is a big contributer to homelessness. If Dense affordable housing isn't created because of the vested interests of the home owners worried about their properties losing value then they are partly to blame..
- ianstormtaylor 3y agoThis article and lots of the commenters are falling into the same trap that happens in every article about San Francisco. It states: > In 2018, the city created a pooper scooper team, each member of which received annual compensation of about $211,000 that year. The implication of a $211K salary sounds too ridiculous to be true. And instead of assuming that it is therefore false, people freak out. If you look up an actual article from the time [1], you'll see that the claim is already not true purely by the numbers: > workers make more than $184,000 a year in salary and benefits And if you dig in further you'll see that "and benefits" is a huge caveat: > Employees of San Francisco's "Poop Patrol" are set to earn $71,760 a year, plus an additional $112,918 in benefits, such as healthcare and retirement savings, the San Francisco Chronicle reported. That $112K in benefits includes health care benefits (which are mandated for city workers, which is a good thing). And health care—if you've been paying attention—is completely fucked in the US, so any attempt at pricing it is going to sound ridiculous. The workers don't actually see any of that money. If you take the $72K in salary, you'll see that it is below average for San Francisco: > On average, a San Francisco resident earns about $96,677 a year, nearly double the median household income in the US. And "below average" is what you'd probably assume a sanitation worker makes. So a huge amount of outrage over nothing. Which would personally lead me to flag this story, rather than trust any of the other numbers its quoting. [1]: https://www.businessinsider.com/san-francisco-poop-patrol-employees-make-184000-a-year-2018-8 https://www.businessinsider.com/san-francisco-poop-patrol-em...
- jmspring 3y agoI'm pretty sure in the last year plus with interest rate increases, the value of "for sale" real estate across the "bay area" from napa/sonoma down to monterey county, maybe lost value in the billions, but $260bil? no. Look at sales, yes, they have slowed, but demand is still incredibly high. My primary residence is in a rural county north of Truckee/Tahoe - housing prices in the last 7 years have doubled or more (wide area, wide variation), truckee/tahoe way worse. I don't see the argument even if you extend it beyond the city. Santa Cruz - houses picked up for $1m or more turned into student ghettos pulling in $5-7k/mo in rent. (my other neighborhood). 260b is a load of bs.
- varenc 3y agoThis is great news for the housing affordability crisis. Sure we should build more housing and that helps an incremental amount, but reducing home value across the board is a much bigger lever. Of course there’s many interests that understandably want to keep home values up so we only focus on the supply side of the problem.
- deleted 3y ago[deleted]
- karmasimida 3y agoThey collected so much tax, where did they use it for?
- jmspring 3y agothere is an obsession with the "pooper scooper team" which is a small part of the article. There is also a general issue on HN which comes from certain demographics crawling all over themselves to show they are superior to SF's civic and cultural issues because their own slumdog country they shit all over in private posts. San Francisco has issues, the main one being it has become too popular with a certain set of TC chasers and chasing out any cultural doversity (sorry desi/indian culture isn't one of those). We've lost blues venues, drag venues many others because of the BS TC uber alles from a certain segment of the tech crowd prior to covid. That same group is panties in a bunch to return to office because of whatever. You have one or the other, not both. And, this will get me down voted, but fuck the indian community TC chasers (biggest part of the comnunity, but there are others) for ruining the bay area. I hear it from friend from SF to Morgan Hill. The guys I worked with 20 years ago were different. It was about building things and helping others, not stomping on people to make your next move.
- browningstreet 3y ago“Washoe County, Nevada, site of Lake Tahoe, another ski resort, brought in 333 San Franciscans, with an average AGI of well over $300,000.” Lake Tahoe, the ski resort. Ahem.