5 ms·

Don’t worry, I’m sure the usual real estate shills will be by to assure us that were not in a bubble and that prices only go up.

jeffbee 3y ago
People who own houses in expensive coastal markets can't easily be dislodged. We can't force them to put their houses on the market or adopt reasonable prices. The rental market, however, is a quite different thing. I track the rental market in Berkeley very closely and while rents have been steadily declining since 2019, in the past few months they have been plummeting. Current market price for older 1-bedroom apartments has fallen back to 2009 levels. Almost sort of affordable. I have a feeling that a lot of small-time landlords who thought they were signing up for a lifetime of "passive income" are getting kicked in the teeth right now.
- 2devnull 3y ago
  I find that dubious but want to believe. Can you cite the numbers at least?
  - jeffbee 3y ago
    All my data and methods are at https://observablehq.com/@jwb/berkeley-rent-board-data https://observablehq.com/@jwb/berkeley-rent-board-data The key graph is https://observablehq.com/@jwb/berkeley-rent-board-data#cell-613 https://observablehq.com/@jwb/berkeley-rent-board-data#cell-...
    - 2devnull 3y ago
      This is great. If you update or do more like this in the future it would be great to have 2 additional things: n counts, and variance/sd. I might worry that for example the high water mark in 2020-2021 had a much smaller n count and if the stats were more people weighted the decline would be less meaningful. In other words if only one tenant rented at the peak year in some very outlier luxury unit, and then next year 1000 tenants came along and rented more typical lower priced units, it would look like a decline. But it’s not a real decline, if that makes sense? I also wonder if (strongly suspect) the temporary eviction ban could be considered a temporary price increase that has now been removed, so the decline you note is not a real decline for that reason, but a reversion of public policy that directly impacted prices for a year or two then vanished. Thank you for doing this!
      - jeffbee 3y ago
        Thanks. Some of the attachments on that notebook are closer to raw data, and you can fork Observable notebooks to fiddle with the analyses.
- YeBanKo 3y ago
  California has one of the lowest property tax rate, yet one of the highest income tax. We need the opposite to incentivize the right behaviors .
  - deleted 3y ago
    [deleted]
  - hn_throwaway_99 3y ago
    People love to shit on Texas (often rightfully, IMO) for their nutty laws, but I think TX got it right here. TX has no state income tax but very high property taxes (e.g. 2.5% in some jurisdictions).
    - jeffbee 3y ago
      A thing people object to in that regime is the tax burden of a median family is pretty high. The California state income taxes of a median household are about zero. Under a high property tax rate, everyone owes an amount that seems significant to them.
      - YeBanKo 3y ago
        High property tax pushes owners to rent/sell/use land rathe than let it sit unoccupied in high demand area.
  - ajmurmann 3y ago
    Or better, land value tax. Improving the property is great and we should incentivize that! Benefiting from everyone around you improving their property while you do nothing, not so much!
- rcpt 3y ago
  > We can't force them to put their houses on the market or adopt reasonable prices At the very least we could stop sinking tens of billions of dollars every year into tax cuts that essentially force them to never sell. Every single California housing issue is because of Prop 13.
  - bugglebeetle 3y ago
    Eh, not really. Every single housing issue is because of real estate speculation. Turning housing into an investment vehicle vs. a depreciating asset that people live in is where all the problems arise from, including Proposition 13.
  - bcrosby95 3y ago
    California had affordability problems before prop 13. It's why it was passed in the first place.
- coffeesque 3y ago
  > People who own houses in expensive coastal markets can't easily be dislodged. They also have an incentive to drive up their own property values via NIMBYism. Maybe prop 13 should be repealed so that all of these greedy people can pay their fair share of property taxes on their inflated property values
lmm 3y ago
Assuming they can keep making it illegal to build new homes, prices will keep going up. It's worked fine for them so far.
sneed_chucker 3y ago
Yeah don't worry, the crash is right around the corner and then you and me and everyone else will snag themselves a house for cheap.
deleted 3y ago
[deleted]

jeffbee 3y ago

People who own houses in expensive coastal markets can't easily be dislodged. We can't force them to put their houses on the market or adopt reasonable prices. The rental market, however, is a quite different thing. I track the rental market in Berkeley very closely and while rents have been steadily declining since 2019, in the past few months they have been plummeting. Current market price for older 1-bedroom apartments has fallen back to 2009 levels. Almost sort of affordable. I have a feeling that a lot of small-time landlords who thought they were signing up for a lifetime of "passive income" are getting kicked in the teeth right now.

2devnull 3y ago
I find that dubious but want to believe. Can you cite the numbers at least?
- jeffbee 3y ago
  All my data and methods are at https://observablehq.com/@jwb/berkeley-rent-board-data https://observablehq.com/@jwb/berkeley-rent-board-data The key graph is https://observablehq.com/@jwb/berkeley-rent-board-data#cell-613 https://observablehq.com/@jwb/berkeley-rent-board-data#cell-...
  - 2devnull 3y ago
    This is great. If you update or do more like this in the future it would be great to have 2 additional things: n counts, and variance/sd. I might worry that for example the high water mark in 2020-2021 had a much smaller n count and if the stats were more people weighted the decline would be less meaningful. In other words if only one tenant rented at the peak year in some very outlier luxury unit, and then next year 1000 tenants came along and rented more typical lower priced units, it would look like a decline. But it’s not a real decline, if that makes sense? I also wonder if (strongly suspect) the temporary eviction ban could be considered a temporary price increase that has now been removed, so the decline you note is not a real decline for that reason, but a reversion of public policy that directly impacted prices for a year or two then vanished. Thank you for doing this!
    - jeffbee 3y ago
      Thanks. Some of the attachments on that notebook are closer to raw data, and you can fork Observable notebooks to fiddle with the analyses.
YeBanKo 3y ago
California has one of the lowest property tax rate, yet one of the highest income tax. We need the opposite to incentivize the right behaviors .
- deleted 3y ago
  [deleted]
- hn_throwaway_99 3y ago
  People love to shit on Texas (often rightfully, IMO) for their nutty laws, but I think TX got it right here. TX has no state income tax but very high property taxes (e.g. 2.5% in some jurisdictions).
  - jeffbee 3y ago
    A thing people object to in that regime is the tax burden of a median family is pretty high. The California state income taxes of a median household are about zero. Under a high property tax rate, everyone owes an amount that seems significant to them.
    - YeBanKo 3y ago
      High property tax pushes owners to rent/sell/use land rathe than let it sit unoccupied in high demand area.
- ajmurmann 3y ago
  Or better, land value tax. Improving the property is great and we should incentivize that! Benefiting from everyone around you improving their property while you do nothing, not so much!
rcpt 3y ago
> We can't force them to put their houses on the market or adopt reasonable prices At the very least we could stop sinking tens of billions of dollars every year into tax cuts that essentially force them to never sell. Every single California housing issue is because of Prop 13.
- bugglebeetle 3y ago
  Eh, not really. Every single housing issue is because of real estate speculation. Turning housing into an investment vehicle vs. a depreciating asset that people live in is where all the problems arise from, including Proposition 13.
- bcrosby95 3y ago
  California had affordability problems before prop 13. It's why it was passed in the first place.
coffeesque 3y ago
> People who own houses in expensive coastal markets can't easily be dislodged. They also have an incentive to drive up their own property values via NIMBYism. Maybe prop 13 should be repealed so that all of these greedy people can pay their fair share of property taxes on their inflated property values

lmm 3y ago

Assuming they can keep making it illegal to build new homes, prices will keep going up. It's worked fine for them so far.

sneed_chucker 3y ago

Yeah don't worry, the crash is right around the corner and then you and me and everyone else will snag themselves a house for cheap.

deleted 3y ago

[deleted]