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San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

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Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#101

Post by dylan604 »

ISL wrote: post #33
hansdieter1337 wrote: post #20

Earlier quoted context omitted.

Had to look up that word as a non-native speaker. Didn’t find anything but this article. Anyone ever heard of this term?

Yes. When an airplane hits the ground, it leaves a crater. "To Crater" is to fall precipitously or crash. In this context, it is in the age-old tradition of financial journalism of selecting exaggerated descriptors of market movement. "Pork bellies fry in early-market trading, fall 5%." It is generally helpful to completely remove the descriptors and replace them with "increase" or "decrease". "San Francisco Apartmen…

>When an airplane hits the ground, it leaves a crater.

That's a strange/morbid example. I would have assumed meteor for the obvious example. An airplane leaves a trench since it's speed wouldn't allow it to bury into the ground, and it's trajectory is much more in plane with the ground. Meteors on the other hand plunge deep but do not travel far laterally.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#102

Post by eagsalazar2 »

mxcrossb wrote: post #26

> The figures underscore how the pandemic has roiled property markets and changed renter preferences. With companies allowing employees to work from home, people have fled cramped and costly urban areas in droves, seeking extra room in the suburbs or cheaper cities. I am skeptical. Yes a lot of Bay Area companies are allowing work from home for now, but are people really weighing that so heavily that they’re moving?…

SF is great (really, just stop it haters!) and there will always be people who want to live there and prices will always be relatively high.

However, for a long time SF has been a place of extreme price distortion because of low (~no) new construction and huge concentration of high paying jobs. The result is many many people feeling trapped there way beyond where it makes sense for their lives. If you are single and living with roommates, making $200K at Twitter, then great! SF is awesome! But when you have two little kids, and/or you just aren't making that much, in a place where small houses are > $2M things are very different. That's me BTW. We hung on for 6 years after having kids and in that time almost all couples with kids we were friends with left. The people we knew who stayed were either much wealthier (had nice exit from previous company) or were really trapped and talked constantly about leaving.

So honestly it does make sense to me. Somewhat anecdotally, I personally know about 15 people who have left since April (including me, SLC is freaking awesome!). For comparison, I personally know exactly 2 people who've had covid. So yeah lots of people really are leaving and the closed bars are just a small factor (IMO), being able to finally move is the much bigger change driving this migration.

I don't think SF will die but rents and home prices coming back down to earth will be a very good thing for the city (my landlord bought the building in 1981 and was charging us $4K/mo for our 900sqft 2br flat, I won't feel bad for him if that deflates to $2500/mo where it should be). The ultra high prices have slowly gutted large parts of the city of anyone but the young or wealthy, mostly tech people. Maybe in a few years SF will be more affordable and consequently a much more diverse city again. That would be great IMO.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#103

Post by leetcrew »

sitkack wrote: post #66
etrautmann wrote: post #48

Earlier quoted context omitted.

yep - rent is the quintessential example of inelastic supply. A tiny shortage of housing can cause a huge jump in price.

Sounds like for things that are inelastic, we should find ways (on both sides) to maintain a buffer if we want to have stable systems.

how would this work? the only way I can think of is for the government to buy above market when prices are going down and then unload them when prices go up. it's hard to see how the public would actually benefit from this. it's a little insane to use government funds to take perfectly good housing stock off the market and prevent people from living in it. seems like the cure would be worse than the disease.

imo, it's best for cities not to try to influence the price of housing in the first place. but if you really want to bring down prices in a tight market, the best solution is to make it easier to build new (and especially denser) stuff. many cities could achieve this "simply" by relaxing zoning restrictions, but if necessary, they could go so far as to subsidize high-density developments. in the much more rare case that prices are collapsing, a city could be more aggressive in condemning dangerous structures.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#104

Post by selectodude »

dylan604 wrote: post #88
nradov wrote: post #17

Is there any data on rent changes in Texas? A Bay Area school district employee told me that she has noticed a big increase in requests to transfer student records to Texas districts. But I don't know how widespread that is.

There's been a few articles lately about the number of west coast people moving to Texas to the point that Texas will be considered a purple state after the upcoming election. I'm from Texas, moved to CA for a number of years, and have since returned to TX. Things like no state income tax and lower sales tax are major attractions, add to that the dirt cheap prices of property in comparison to CA. There are other thin…

> Why not any large ticket purchases like computers,washer/dryer,fridges,etc.)

Technically they do. You’re supposed to declare purchases on your taxes and pay the “use tax” on them. It’s just that you can’t get away with not paying the tax on a car so it’s easier to enforce.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#105

Post by dylan604 »

hansdieter1337 wrote: post #20
lazzlazzlazz wrote: post #12

Earlier quoted context omitted.

> "...Crater Up To..." hard to imagine a more awkward choice of words

Had to look up that word as a non-native speaker. Didn’t find anything but this article. Anyone ever heard of this term?

Look up the joint NASA/ESA Mars lander that was lost because of a mix up between m/s and ft/s. I'm pretty sure that lander cratered.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#106

Post by barry-cotter »

komali2 wrote: post #77
burlesona wrote: post #51

I would say the city being “closed” is the major driver. Among my group of ~40 coworkers, about 30 (including me) have left the city. As far as I know all but one were renting. Everyone who left gave the following rationale: - we can work remotely so move wherever or nomad now - SF is not very fun during the pandemic - WFH in my tiny apartment is much less enjoyable than when I was working in the office and didn’t sp…

I disagree that it's a demand problem alone. There was tons of new construction. If I wanted to, I could have moved to any neighborhood in the city on a whim... As long as I was willing to move into a brand new luxury apartment $4k studio. The demand was high for reasonably priced older units. "Just add new construction" doesn't work if all that gets built is luxury apartments.

Again, think on the margin. If there’s suddenly a lot of new luxury apartments then those looking for something cheaper have less competition from the deep pocketed. If they build so many luxury apartments that prices for them break that’s also a victory condition.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#107

Post by mdgrech23 »

sitkack wrote: post #66
etrautmann wrote: post #48

Earlier quoted context omitted.

yep - rent is the quintessential example of inelastic supply. A tiny shortage of housing can cause a huge jump in price.

Sounds like for things that are inelastic, we should find ways (on both sides) to maintain a buffer if we want to have stable systems.

Inelastic just means consumers aren't sensitive to price. The classical example is prescription drugs. Consumers are not price sensitive b/c they NEED those drugs. As such the seller can raise price and not see a drop off in sales.

I think a good example of a highly elastic good is hamburgers. Is McDonalds raises burger prices by 300% there a ton of other options for consumers to switch to and sales will drop.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#108

Post by justinzollars »

A lot of people I know have left San Francisco, many businesses have closed. I'm curious to see voter turnout this year as a further evidence marker. You can see all things being equal [1] amongst bay Area counties SF sales tax went up only 1% from April to June - implying large amounts of people have actually left the city, consistent with anecdotal evidence I see such as friends leaving and seeing many moving trucks.

[1] https://www.sfchronicle.com/business/article/Yes-people-are-...

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#109

Post by cwilkes »

burlesona wrote: post #56
nradov wrote: post #17

Is there any data on rent changes in Texas? A Bay Area school district employee told me that she has noticed a big increase in requests to transfer student records to Texas districts. But I don't know how widespread that is.

I don’t know about rents but single-family home sales and prices are surging.

My theory on that is that people are spooked by the virus and want to remain isolated. That and living in a smaller apartment isn’t that much fun when you have to spend all your time in it versus going out to eat or meet friends.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#110

Post by paulmd »

burlesona wrote: post #56
nradov wrote: post #17

Is there any data on rent changes in Texas? A Bay Area school district employee told me that she has noticed a big increase in requests to transfer student records to Texas districts. But I don't know how widespread that is.

I don’t know about rents but single-family home sales and prices are surging.

Yeah, part of this may be that one- and two-bedroom apartments are undesirable during a pandemic.

I know it's a sentiment I've expressed to friends and family: I bought a house last year and I've repeatedly thought "boy I'm sure glad I'm trapped in a single-family home with a nice backyard for a year, rather than in my old apartment for a year". I would have been climbing the walls there.

Of course there are more factors in single-family home prices as well: interest rates are directly tied to how much money people can afford to borrow, so the rate reductions this summer drive a surge in housing prices, and generally the fed injected a ton of money into the financial system that is sloshing around looking for safe places to park, and housing is a very safe place to do that. There are a lot of properties being bought up by investment firms to rent out.

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