14 ms·
San Francisco Real Estate Exuberance
- johnrob 13y agoBy 2005, however, 73% of buyers paid above ask. Is 73% a typo? It seems like it should be lower based on the tone of the sentence.
- solarmist 13y agoLater they note it is currently (2013) 64%, so I don't think it's a typo.
- bluedino 13y agoYou missed the sentence before that one - By the next year, prices plummeted and most people paid below or at the asking price.
- johnrob 13y agoGot it - I missed the bit about it dropping since the previous high.
- lolwutf 13y agoIn my opinion, this is what will eventually spur a braindrain in SF in 5-10 years. My theory, if it holds, says that a bunch of 20-somethings flooded into SF in the past 2-3 years. When they reach their early/mid-30s, they will begin their nesting phase. They'll want to find/will have found their mate and will want a house with some space.... The chance to finally to get out of their dumpy studio/3-bedroom-with-roommates... Some well-deserved adult digs, after years of hard work in this industry. However, they'll look around at house prices, look back at their bank accounts, and realize such dreams could never be fulfilled here. At that point, they'll pick one of four paths: -Buy property in a remote, suburban sprawl-y part of the Bay Area (an unattractive option to anyone who's lived in SF for many years) -Buy some depressingly expensive one bedroom condo and stay here -Become a lifetime renter -Move away from the Bay Area ('back home', or elsewhere) In my opinion, a 30-something, on the verge of midlife crisis anyways, will take one more shot at the great unknown and set out for a new region, outside the Bay Area. Unless, of course, they sold their startup for 8-figures and escaped with a big chunk of compensation. Thoughts?
- bigethan 13y agoThis all depends on how you define "dream". If it's a picket fence, yard, pool, 2,5 kids, etc, that's not gonna fly in the Bay. But if the dream is to live in a nice place with easy access to a fantastic city, that's achievable anywhere in the Bay Area (Oakland has it's moments of greatness, Berkley has it's chartms, and SF is SF). My take is that the East Bay is about to start growing like crazy.
- toomuchtodo 13y agoA "nice place" is not a 1 bedroom for $3K/month. You can't live comfortably in SF proper on less than $120K-150K/year.
- selectodude 13y agoThere's no reason for this, either. San Francisco has to relax their brain-dead backlash toward high density construction. Los Angeles, too. Is it a California thing in general?
- JimboOmega 13y agoWell... it kind of is. This article (now dated, from 2007) shows the cost of the "right to build" in various US cities. 4 of the top 5 are in California: http://www.theatlantic.com/magazine/archive/2007/11/a-tale-of-two-town-houses/306334/ http://www.theatlantic.com/magazine/archive/2007/11/a-tale-o...
- geebee 13y agoFeel free to be cynical in your answer, but why would a property owner who just paid a fortune to buy a single family house in SF want to rezone the neighborhood to see a large apartment complex built next door? Now that they've paid the heavy toll, they stand to lose the most.
- lolwutf 13y ago
- solarmist 13y agoThe graphs aren't showing up for me. Anyone else having trouble with them?
- tracker1 13y agoWhat I don't get is all the companies actually setting up shop in San Francisco. If I were a tech startup, I'd actually setup shop in a nice area relative to cost of living, then attempt to draw people out. If you can get someone already in SF out to say Boise, Denver, or Phoenix they can make 80% of what they made in SF and have a better lifestyle. If you cover the cost of moving that should make it a very attractive offer. Sell their home in SF (if they own), and buy a nicer/roomier place in the new location. Phoenix in particular has a pretty thriving tech community, and a far better cost of living. The main reason I stay here is the job market is great, and the cost of living is far better, relative to programming pay than most other areas. Of course there is the down side (June, July and August).
- 727374 13y agoMy personal pick is South Lake Tahoe. No state income tax, 3.5 hr drive to SF, commercial airport, and stunningly beautiful. Heck, a lot of SV/SF bigshots already have vacation homes in the area.
- tracker1 13y agoExactly... There are lots of really nice locations all across the country that seem to be far more attractive options to a startup wanting to draw in talent.
- joonix 13y agoHow are you going to convince people to move a rural area where they know nobody just to work for your startup that might not be around in a year? All to save what, $1,000 a year? How are the schools in Tahoe? Vacation homes, exactly. Lifestyle business guys, freelancers, writers, yeah of course. But trying to found the next Google in Tahoe doesn't make sense unless there's already a major "anchor" tech company in place there.
- 727374 13y agoIf you're trying to start the next Google, by all means you should move to Mountain View and put it all on the line. Someone could easily save $20k a year between lower rent (1500/mo vs 2500/mo) and lack of CA state income tax (9k?).
- qq66 13y agoAlways worth noting that "this time may be different." Specifically, this trend may or not be the beginnings of a long-term structural move of the world's wealthy from suburbs to urban areas, with world cities like San Francisco, New York, and London becoming luxury dwellings for the 1%. If so, then prices will continue to rise substantially.
- zinssmeister 13y agoLike others have mentioned, the possibility of a brain-drain from SF is a very likely scenario in a few years (if the cost of living stays this shitty). It would be more beneficial if startup land would decide on one of the secondary tech hubs as opposed to everyone going wherever. Having 2 people move to Seattle, 4 of them to Boulder and 3 to Phoenix isn't gonna establish much in either of those. But having 10 people all move to Austin seems like a bigger impact.
- lolwutf 13y agoSounds like an awesome recruiting product.
- zinssmeister 13y agohow so?
- mtdewcmu 13y agoIt seems hard to extrapolate a long-term boom-bust cycle from those graphs. SF may be more sensitive to national trends, but I only see two clear busts, and one was 2008, during which housing markets collapsed almost everywhere. The earlier one coincides with the 2001 downturn and dot-com bust. You'd probably see echoes of those busts in plenty of other housing markets.
- pyrocat 13y agoThought this was going to be a modernized Yatta! and I left disappointed.
- mbesto 13y ago> The question is, when? Easy. When the bubble pops.
- cmottau 13y agoThis is a tech-heavy community, but the interest of foreign buyers cannot be overlooked in this current market. San Francisco is a world-class city and if you look at overall macro trends of comparable cities (London, New York, Paris, Tokyo, etc), SF is still downright cheap. There will always be a wave or renters in great locations, so if you have the cash SF real estate is a good place to park it.
- reustle 13y agoAs far as I've seen, SF is about the same cost of living as New York
- moocowduckquack 13y agoAverage price of a 3 bedroom house in central London is currently around $4,900,000.
- michaelochurch 13y agoAverage price of a 3 bedroom house in central London is currently around $4,900,000. Europeans get xenophobia all wrong. They freak the fuck out about minarets but do nothing to keep foreign speculators and billionaires out of their real estate markets. If you want a decent life in your town, keep the despots and oil sheikhs and drug kingpins the fuck out of your real estate market.
- hcho 13y agoUKs house prices are high by design. Germany, another European country, does not have that kind of price levels for property. It's not the speculators or billionaires, it's the governments.
- ArbitraryLimits 13y agoSo how exactly does the government design that? I saw the same thing in Italy when I lived there in the 90s - any kind of real estate was much more expensive than it seemed like anyone would be able to afford. Never did figure it out - in the US, the public policy issue with homeownership is making mortgages easier or harder to get. If they're easy, then prices go up but more people own something. If they're hard, then prices go down (because no one bids them up) but fewer people own. I can't figure out a policy that leads to high prices and low rates of ownership.
- icedog 13y agoWhen I see more significant venture capitalists in Portland (or SF VCs willing to invest in Portland based startups), I'd move within days. -- Software Engineer in SF
- marincounty 13y agoWhy do people want to live in a foggy, high priced city? 1. Nerdy guys are hit on by women.(Yes--they are that desperate--remember the lack of available guys?) 2. It's a strict union city--meaning if you get into a union you have a decent living. There's a ton a jobs, but if it's not union expect around 10/hr. If you look good--a chick will take you into her rent controlled apartment. Money/intellect doesn't mater in your 20-30's though--you have to be a Fonzie--in order to get rent controlled girl. Owning a car is like shooting yourself in the foot to stop a robbery, except in a handful of neighborhoods. It's a great town for young men(some of you), but it's horrid for straight women. If you make your fortune with your start-up, you will move to Marin, and live like a hermit. Although, your neighbors won't steal from you. Home is really a state of mind. I've seen successful Flat Landers arrive in the Bay Area, and realize they might have been the popular kid in there town, but in reality there just a C student--on all levels. They become depressed within a year. If you do decide to live if San Francisco most people assume you have an advanced degree. They are not impressed by where you went to school. They are impressed with what you built in your garage though. If you enjoy working with you hands, and back, look into local 6 apprenticeship program. If you become a book 1 dude, you will make $100/hr. If you become book 1, don't turn into an asshole though. Remember, the only reason you make that money is because of a liberal Union.
- tn13 13y agoNerdy guys are hit on by women ? When where?
- tn13 13y agoI will move to some other small city in USA any day for the same pay. SF truly sucks at so many levels.
- antihero 13y agoWhat is SF like to rent? There's a small chance I'll be moving there, and don't want to be super broke.