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What Happens to Home Prices When Technologists Come to Town
- mrwilliamchang 11y agoCorrelation is not equal to causation. The article feels like link bait to drive more attention to redfin.com.
- beatpanda 11y agoThe industry is destroying everything it touches and there is nowhere to run.
- spiritplumber 11y agoMostly true, but I'd like to know why. I doubt that the problem is coders and tinkerers (well, I am one, so I am biased).
- Boxbot 11y agoIt has nothing to do with the technology sector directly; It's just about money and the pendulum swinging back towards urban living being considered desirable. A booming sector of the economy combined with a relatively affluent portion of the population wanting to move into geographically constrained areas that have been neglected in terms of development for the past few decades.
- walshemj 11y agoAnd a large number of now rich people in other countries looking for assets outside of their home country's control - which in SF is just the same as it is in London
- mentat 11y agoOnly because we insist that everyone work 8 hours a day to eat and have a place to live though we don't have to.
- stephengillie 11y agoBeing poor is just a lack of liquidity. Minimum income is opening the bank bailout philosophy from just corporate persons, to all persons. But human people act differently than corporate people, so maybe it will work in this scope. Edit: If you disagree, could you please say why? I can be dense and clueless, but it's hard to improve if I'm ignorant.
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- jobjh797878 11y agoI don't disagree with what you said because it doesn't appear you said anything of substance. Perhaps that is why people downvoted.
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- meesterdude 11y ago> When I bought my first house, using money earned from co-founding a software company, I couldn’t believe that such abstract work could be exchanged for something so big and tangible, hewn from forests and rocks by people sweating in the sun. I've been writing software for years, and it still feels like magic. People work 3x as hard as me and I make 3x as much as them. Many make real, physical things; i just type away on a keyboard. With the right incantations, you can build something that's worth millions. Just you, in your free time, creating something that can be used by the entire world. Always reminds me of this louie CK interview on conan: https://www.youtube.com/watch?v=uEY58fiSK8E https://www.youtube.com/watch?v=uEY58fiSK8E
- mentat 11y agoThe product of your work does more than 3x what you could do by yourself though, that's why it's valued more / differently. A similar argument would be made for effective organizers and the force multiplication of coordinated work.
- eonw 11y agolikewise, almost anyone can chop wood or swing a hammer to break rocks.... no just anyone can write high quality code.
- WalterBright 11y agoA power saw can do the work of a thousand men chopping wood - making the designer/builder of such a machine worth more compensation than the chopper.
- afarrell 11y agoAlso programming skill is rare compared to the opportunity to apply it and this gives us negotiating power. In commerce, you don't get what you deserve; You get what you negotiate for.
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- serve_yay 11y agoIt's a very discouraging time to try to buy a home in Portland now. I can't really figure out what to do about it.
- eclipxe 11y agoWhat is the market like there?
- serve_yay 11y agoInsanity. When I was out looking a few weeks back, my realtor got a call from another realtor who had just closed on a house for $402k, which had been listed at $365k. Lots of people getting blown out by all-cash offers. Every house you look at, the sale history shows it was bought in 2014 for $172k and it's on the market for $300k, a lot of that sort of thing. I looked at basically a dilapidated shack that was $300k because it was near the New Seasons on NE 33rd. I waited until I had a full 20% to get in the market, turns out I should have bought earlier because the 20% isn't going to help me now anyway given the all-cash offers out there. From what I have heard, a lot of this is due to foreign capital looking for a value store. But I also think this will just continue and get worse, as people in the Bay area look at the quality of life in Portland, compare housing prices, and conclude (rightly IMO) that the move is a no-brainer.
- meritt 11y agoSt Johns. Lents. Milwaukie. East Portland. SW Portland (Markham, Terwilliger, Multnomah Village) There's some good deals out there still but yeah.. in the same boat as you. I'm working on compiling historical pricing on a neighborhood basis so I can focus my attention on areas that haven't been seeing 10%+/yr gains. West Hills, for instance, homes have been appreciating only about 3%/yr. Of course those were way out of my budget to begin with...
- timcederman 11y agoAnd in the future this will look totally reasonable. The full house prices you quote are what houses in the Bay Area routinely sell for OVER list price. When I started looking in 2012, the average sale price in my area was $900k, and now it's $1.7m.
- geebee 11y agoIt's still an open question as to whether this will cause San Francisco level problems. It may turn out to be a very good thing in moderation. I think people forget that until very recently, San Francisco was actually rather fond of its tech industry. It was viewed as a creative, slightly quirky, and generally positive culture that fit right in. Tech is actually a pretty good industry to have around. Supposedly tech jobs create wealth and, as a result, stimulate more non-tech job creation around it. The problem isn't necessarily tech, it's too much of a good thing[1] There's also a secondary issue, which is that pacific northwestern cities have a middle-to-recent history of not really wanting Californians around, so you might be getting a more negative response from Portland or Seattle to "silicon valley moving north" than you would from Baltimore or St Louis. An occupational poll I read recently suggests that the computer industry is still looked on positively [2]. Overall, though? If this just means that tech is finally spreading out a bit, so that people can earn a programmer salary in SF (about 114k according to US news best jobs) in a place where this means they can now buy a house, raise a family, and stimulate the local economy (and perhaps an anemic housing market), I see this as a good thing. [1] Perhaps. There is an argument to be made that tech culture has gotten much uglier with the amount of money that poured in. Also, we spend a lot of time and mathematical talent getting people to click on ads now. [2] http://www.gallup.com/poll/156713/americans-rate-computer-industry-best-oil-gas-worst.aspx http://www.gallup.com/poll/156713/americans-rate-computer-in...
- kansface 11y ago> It's still an open question as to whether this will cause San Francisco level problems SF's (SV's) problem is that it refuses to build houses commensurate to the number of people who move there. Any number of well paid jobs from any industry would have caused the same problem. High paying (middle class) jobs (outside of manufacturing) are not a problem. > If this just means that tech is finally spreading out a bit For better or worse, the exodus of tech companies out of SV could have been prevented. The valley could have captured nearly the entire industry if it just built more houses. Billions (likely trillions over the course of a few decades) of dollars will not flow into the local economy.
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- eonw 11y agoask seattle, they are dealing with it now and many of the locals aint to happy. not only have housing prices gone up, traffic and crime have as well.
- stephengillie 11y agoInterstate-5, a fully-featured modern interstate highway, is a modern marvel. In the middle of the afternoon, we can travel an entire 13 miles in the span of just 60 minutes!
- pnathan 11y agoMany of the locals appear to be avidly hoping to follow SF in anti-growth measures and laws.
- carboncopy 11y ago> crime [has gone up] as well. Despite what the talking heads may have you believe, crime has dropped significantly in Seattle since its population and economic growth. http://www.city-data.com/crime/crime-Seattle-Washington.html http://www.city-data.com/crime/crime-Seattle-Washington.html
- stephengillie 11y agoSeattle's traditional Capitol Hill residents are really struggling with the tech influx, just down the hill in SLU. New bars and restaurants open daily, rents have skyrocketed, and their arts scene is being pushed up the hill and to the east.
- eclipxe 11y agoNew bars and restaurants to enjoy, what a struggle!
- hashberry 11y ago#amholes #amazonkilledseattle #gentrification #dudebros #richdicks #highrent #anotherbar #morecondos
- dasil003 11y agoThe problem is a lot of people can't afford an artisanal $15 whisky sour, but a 25-year-old single software developer bringing in $100k doesn't have to think twice about buying three of them.
- jseliger 11y agorents have skyrocketed This is an easily solvable problem: http://www.amazon.com/Rent-Too-Damn-High-Matters-ebook/dp/B0078XGJXO http://www.amazon.com/Rent-Too-Damn-High-Matters-ebook/dp/B0.... Capitol Hill height limits and parking minimums are insane. I used to live across the street from Seattle U, and the apartment building was only four stories high. It should've been 20 stories, since everyone in it was connected to the university. Every street west of Broadway / 10th and south of Prospect should have no height limits or parking minimums. The problem can be solved: Seattle's politicians (and, by extension, voters) choose not to solve it.
- manyxcxi 11y agoIf we were having a gold rush we'd be complaining about miners driving up prices. The tech sector is no different in that regard. I like the correlations they've drawn to the performance of individual companies, etc. but to promote the idea that these companies are any different from any other company in any other industry that would be going through the same growth is a bit off target in my opinion. What would be interesting to me though would be data along the lines of "What is different when technologists come to town vs. [insert some other group]" - What does it do to supporting industries/economies? - Do schools start performing better? - Do the local municipalities fare better because of the group that is coming in? - Do maker labs start springing up? - Does the level of poverty decrease? That's the kind of stuff I'd be interested in learning about. I guess I'm asking what ACTUALLY happens when technologists come to town that's different than when doctors come to town or garbage men, etc.
- ChuckMcM 11y agoThere was an article about that in the economist (http://www.economist.com/news/united-states/21644164-gentrification-good-poor-bring-hipsters http://www.economist.com/news/united-states/21644164-gentrif...) which basically said the economic indicators for an area are better for everyone when this happens.
- mc32 11y agoExactly the same phenomenon happens when hydro fracturing comes to town. Except the ramp up is much faster and incurs much more disruption and, unfortunately, so far, is far more short lived. By the time municipalities catch up with the demand the industry goes into a bust. Technology on the other hand brings, so far, long term prosperity to previously declining areas. The problem I see is that municipalities want the prosperity without the consequences. They want the tasty burger without the cholesterol. Western economies, or rather, societies, have this strange unease with rapid urban expansion. An unease I have not encountered so much in Eastern economies and societies. In the east, progress is seen as generally good, whereas the west has greater suspicion of it.
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- chiph 11y agoPeople in Austin are saying it's a bubble. But it isn't - a significant number of homes are being paid for in cash. Often $10-20k over the asking price. Those that are being financed have fairly solid support behind them (20% or more being put down). It's not a bubble - it's supply + demand in action. Which means that housing will be tight until the builders can catch up. Unfortunately, Austin's roads and other infrastructure weren't designed for this influx and are overwhelmed. The city leadership recognizes it's a problem, but haven't been able to produce a coherent plan for solving it. Don't move here.
- dragonwriter 11y agoBubbles are supply + demand in action, but where the demand is driven in large part by perceived future value where the underlying fundamentals to support that future value do not exist. That homes are being paid for in cash doesn't indicate that there isn't a housing bubble -- it does mean that if there is, its not likely significantly an effect of a mortgaged-backed-securities bubble the way the pre-2009 national housing bubble was.
- jsuar 11y agoThe question becomes, if there is a bubble, what could make it pop? Tech jobs leaving the area and not creating salaries that support existing house prices?
- dragonwriter 11y ago> Tech jobs leaving the area and not creating salaries that support existing house prices? Sure. But other things could, too -- bubble-driven overbuilding of new housing and then having the influx of jobs stop could do it, especially if updates to shared infrastructure were deferred and the tax revenue to support them didn't materialize because the growth stopped -- the new houses would sell at lower prices because the new higher-paid workers they were made to appeal to wouldn't be there, but the total infrastructure demand would be similar, adversely affecting property desirability. There's probably other scenarios -- and I'm not saying it is a bubble or that any particular popping scenario is likely (I don't know Austin that well), just that the fact that purchases don't seem to be mortgage-fueled doesn't mean that there isn't a bubble.
- mindslight 11y agoImagine if some of that wealth creation were being used for something - even just making people financially independent so they could work less and pursue their own interests. Instead it just goes to the banksters that print the money.
- bkjelden 11y agoIt's interesting to me that they didn't include Microsoft in their data. The article itself states that Microsoft employs 100k people in the Seattle area - more than the ~78k they show for Google, Apple, Facebook, and Amazon combined.
- pnathan 11y agoAs someone who moved to Seattle for a tech job, it's very exciting seeing the boom. Jobs are spraying everywhere; hope and life are flowing. It is frustrating to see the house prices go up, but the sense of change in the air is often almost palpable. Very thrilling.
- beatpanda 11y agoThat's funny, because everyone I know from or in Seattle who doesn't work in tech is talking about how it feels like their city is under attack and being destroyed, sort of like how it feels for everyone not in tech in the Bay Area.
- nmbr 11y agoHope and life are indeed flowing here in Seattle. For some into bank accounts, for others into dump trucks. Thrilling isn't the word I'd pick, but how could newcomers know what's been lost? Expecting empathy from them is unreasonable. As absurd as expecting someone to see around corners.
- hughdbrown 11y agoDoes anyone from Denver also find that the relationship is overstated? I don't know of any Denver offices for Apple, Facebook, or Amazon. The only Twitter or Google offices I am aware of are in Boulder. Boulder and Denver are connected by a single highway and the commute is bad enough to effectively separate the two tech hubs. I don't see how anyone can claim that the 1200 employees attributed to Google, Apple, Amazon, and Facebook (which I dispute is an accurate number for Denver) could possibly have any measurable effect on a city of 600K / metro area of 2.6 million.
- narrowrail 11y agoWhile I don't live on the Front Range anymore, I did for 20 years. Denver to Boulder is ~25 miles, and I use to make the commute in 25 minutes (not during rush hour). It was quite common to refer to the Denver/Boulder metro area. I know things have changed, but ~1hr commutes don't seem to me to be significant enough to be called separate.
- saryant 11y ago36 is REALLY bad these days, especially with the current construction. I live in Boulder and when I was recently looking at jobs I made that drive to see if I could deal with the commute. Nope!
- Aloha 11y agoI work in a high tech industry, I make mobile networks go.. and I'm slowly being priced out of Seattle (I live in Renton), my rent has gone up 20% in 2 years, and everywhere else I look is higher yet - this combined with the rather chilly local culture, is driving me to look at moving elsewhere, probably to a non-tech hub, like Dallas, I'd like to own a home at some point - but I don't make that 100k a year salary, and likely never will, as the best paid in my industry are making in the high 70's, beyond all that, I'm stuck as a contractor, on my second 18 month term with no headcount opening in sight. I'm a pretty decent UNIX and networks guy - but not a software developer sort of person, its just not the way my brain is wired, so at the rate we're going, I'm not gonna be able to afford to live here in 2 years.