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

bloomberg.com

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

#231

Post by CalRobert »

bumby wrote: post #198
eagsalazar2 wrote: post #102

Earlier quoted context omitted.

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…

I’m curious as someone who has never lived in SV (only visited for work) but do you feel like there are certain areas that displaced SV gravitate towards and would eventually cause property in those areas to rise as well?

I haven't lived in the bay area in 9 years (used to live in Berkeley), but so far my old SFBA friends have moved overwhelmingly to Portland, with one going to Colorado, another to Seattle, and two staying. One is a wealthy engineer, and the other (who has a kid in Marin) an incredibly fortunate person who was curious about this bitcoin thing 10 years ago..

I don't know of any "regular" people who stayed in the bay, except for a relative who's stuck there because of shared custody over kids with an ex and can't practically move. She'd like to though.

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

#232

Post by lukeschlather »

corytheboyd wrote: post #191
notherthrowaway wrote: post #154

I think people are asking the wrong questions. We know that people moving back in with their parents is up about 3 million due to COVID [1]. It would follow that studio apartments are the mostly likely to be rented by those same young people, thus the demand has dried up. The question we aren't asking is, what happens when the economy recovers and these people move out of their parent's homes? Will they go back to th…

My guess as to what will happen, for the sake of playing along with the hypothetical simply because it’s fun. Destination cities will still be desirable, however there will be a very slow rebuilding of demand. The magnitude of that demand will never reach the same height. The entire world was forced to work from home for an extended period of time, introducing those from industries that would scoff at the idea to a d…

WFH is fine. Bothers me not at all. I hate not being able to breathe the same air as my friends. It makes so many things impossible - things that are also impossible unless my friends mostly live within 30 minutes travel of me.

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

#233

Post by barry-cotter »

blululu wrote: post #172
barry-cotter wrote: post #106

Earlier quoted context omitted.

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.

It's not so simple. The newer buildings were constructed at a much higher cost than the old ones and they are priced accordingly (and with less flexibility to go down in price). In spite of the price tag and the 'luxury' appellation, they really are not that nice (they tend to be small and the gym/pool that comes with the apartment is closed during Covid. Consequently there is a subtle structural shortage on apartmen…

> As long as housing stock is differentiated in price and quality a shortage can endure even with an increase in total supply (rent controlled units for example will always be in short supply regardless of new construction).

If you build enough quality housing you end up with old crappy housing being impossible to rent out so it either gets abandoned or redeveloped. If you build enough housing the price floor that is rent control ceases to bind because market rates drop below the floor. There can absolutely be a “shortage” of a given combination of quality and price but that’s like saying there’s a shortage of Peter Norvig talented Computer Scientists who’ll work for $50K a year.

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

#234

Post by seattletech »

samfisher83 wrote: post #96
murph-almighty wrote: post #85

Earlier quoted context omitted.

I'm really curious about the macro political effects too- if a surge of CA-based liberal leaning tech workers move to Texas, is Texas purple?

If you look at the 4 big cities of Texas they are all blue. Its just surrounded by a sea of red.

Hence the reliance on gerrymandering to maintain majorities. Look at the congressional districts around Austin

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

#235

Post by Retric »

leetcrew wrote: post #200
jdmichal wrote: post #168

Earlier quoted context omitted.

And yet this is exactly what is done for farming: Paying farmers to leave fields fallow in order to maintain supply and thereby pricing. Dropping property prices shouldn't even be an issue for owners. Property value and thereby property taxes should also go down. As long as they can cover that, then they can continue to own the property. Except in reality everyone is actually leveraged against their property and don'…

> And yet this is exactly what is done for farming: Paying farmers to leave fields fallow in order to maintain supply and thereby pricing. I'm sure there are some subtleties I'm missing, but this has always struck me as a little odd. why do we subsidize agricultural production and then turn around and also pay farmers not to use fields to stop the price from falling too low? also a price collapse isn't necessarily ca…

It’s mostly about buying votes cheaply. There are significant incentives to consistently maintain a food surplus, but one you start handing out government subsidies you get the usual corruption. As subsides crash prices it’s cheaper to just pay farmers to do nothing than to pay them to create a crop that’s just going to rot.

Basically, you don’t want to pay 1$ to farmers per ton of corn just to lower the price of a ton of corn by 1$. The goal is to hand that dollar to the farmers not the general public.

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

#236

Post by lisper »

nullc wrote: post #212

Personally I think SF itself, compared to the surrounding region, is a terrible place to live whos downsides must only be barely mitigated by specific positives which appeal to some people-- E.g. nightlife and access to high paying jobs. And right now the pandemic has killed the positives: destinations are closed and businesses have cut back and/or accepted remote work in large numbers. Not everyone sees it my way, o…

It is manifestly the case that enough people disagree with you to keep San Francisco rents among the highest in the world under normal circumstances. Not only do we have nightlife and good jobs, we also have world-class restaurants (seven three-star Michelin restaurants in the Bay area and an accompanying halo of lower-tier options), theatre, opera, ballet, good weather most of the time, redwood forests, beaches, sailing, surfing, kite-boarding, and a culture of weirdness and innovation that keeps the street life very interesting. Oh, they make some decent wine nearby too. Show me a place with affordable real estate and I'll show you a place that not many people want to move to.

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

#237

Post by compiler-guy »

BurningFrog wrote: post #230
notherthrowaway wrote: post #154

I think people are asking the wrong questions. We know that people moving back in with their parents is up about 3 million due to COVID [1]. It would follow that studio apartments are the mostly likely to be rented by those same young people, thus the demand has dried up. The question we aren't asking is, what happens when the economy recovers and these people move out of their parent's homes? Will they go back to th…

Those factors are real, but they apply to dozens of big cities. They don't explain why rents in SF are falling more than anywhere else. To be fair, the article only says 31% is the most. If other cities are around 29-30%, forget what I said.

Bay area rents rose far higher and far faster than most other places. So they had the furthest to fall.

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

#238

Post by geebee »

xyhopguy wrote: post #180
burlesona wrote: post #160

Earlier quoted context omitted.

SF is indeed a nice city and better than many in terms of parks and outdoor amenities. However, the space at home, when you WFH, is pretty rough. If you take what a typical couple pays for SF rent you can buy two houses in most of the US. So... if you're going to be spending a lot of time at home, for many people it makes sense to move out to a cheaper and more spacious locale, at least for now.

agreed -- portland is right there with very similar recreational activities and literally 25% the rent. why rent a 1b1b in SF when you can rent a mansion right on washington park for the same price?

That's a fair question, and the answer will depend on what people emphasize in life. I'll venture a firm answer for SF:

Though SF is no New York, it is notably more urban than Portland. San Francisco is physically more strikingly beautiful than Portland, with magnificent views of the bay and ocean from the hills. Portland is surrounded by beautiful forests and parks, but so is SF - you can get from downtown SF into the middle of a quiet redwood forest in about 25 minutes, and the coast, north and south, is far more accessible than it is in Portland[1]. While SF has a severe problem with street addiction and mental illness, so does Portland, and SF does still have extensive walkable urban and semi-urban neighborhoods. Golden Gate Park, the Presidio, and Crissy field are just a few of the outdoor options within the city. There are also plenty of options to live in lower density, SFH neighborhoods with small backyards. Culturally, San Francisco is much more diverse than Portland - SF actually ranks first among US cities in the number of languages spoken by 1000+ households. Portland is overwhelmingly white and has a historical hostility toward ethnics and immigrants (some believe that the anti-Californian sentiment has roots in hostility toward Catholic and darker skinned immigrants) - and, ironically on the other side of the political spectrum, a lot of immigrant or first generation communities are actually uncomfortable with predominantly white, left wing progressive politics. Immigrants may be more likely to find a community in SF than Portland.

[1] I surf, which makes Portland a hard pass for me, though that's a bit too niche for a general comparison.

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

#239

Post by rgbrenner »

corytheboyd wrote: post #191
notherthrowaway wrote: post #154

I think people are asking the wrong questions. We know that people moving back in with their parents is up about 3 million due to COVID [1]. It would follow that studio apartments are the mostly likely to be rented by those same young people, thus the demand has dried up. The question we aren't asking is, what happens when the economy recovers and these people move out of their parent's homes? Will they go back to th…

My guess as to what will happen, for the sake of playing along with the hypothetical simply because it’s fun. Destination cities will still be desirable, however there will be a very slow rebuilding of demand. The magnitude of that demand will never reach the same height. The entire world was forced to work from home for an extended period of time, introducing those from industries that would scoff at the idea to a d…

The magnitude of that demand will never reach the same height.

The US is expected to add 80m people in the next 30 years. So that seems very unlikely, even if there is a shift in behavior.

Edit: reduced the population estimate with newer numbers from the census bureau.

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

#240

Post by corytheboyd »

notherthrowaway wrote: post #215
corytheboyd wrote: post #191

Earlier quoted context omitted.

My guess as to what will happen, for the sake of playing along with the hypothetical simply because it’s fun. Destination cities will still be desirable, however there will be a very slow rebuilding of demand. The magnitude of that demand will never reach the same height. The entire world was forced to work from home for an extended period of time, introducing those from industries that would scoff at the idea to a d…

==This general shift in attitude will make it far more realistic to work where you actually in your heart of hearts want to live.== Will young people suddenly not want to live in close proximity to other young people? Will that become another luxury item for the well-connected?

I don’t think it needs to be so absolutely black and white. I just mean, if you lived somewhere for reasons other than “I enjoy living here” you’re likely going to have options that didn’t previously exist.
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