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San Francisco, I Love You But You’re Bringing Me Down

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Re: San Francisco, I Love You But You’re Bringing Me Down

#351

Post by lettergram »

enraged_camel wrote: post #230
gknoy wrote: post #198

Earlier quoted context omitted.

As someone who recently (this past year) went from being a renter to a homeowner, and had previously been a home owner for several years, it's not all rational... but here are some of the reasons. I don't have to worry about the rent going up every year / six-months. If I plan to own the house for multiple years, a large chunk of my money goes to equity: I'm banking away value for later that you will get back when yo…

>>If I plan to own the house for multiple years, a large chunk of my money goes to equity: I'm banking away value for later that you will get back when you sell the house. (Assuming the market doesn't go pear-shape: a big assumption.) In contrast, money you spend on rent is a pure cost, and irrevocably lost. This logic is fundamentally flawed. Contrary to the popular conventional wisdom (repeated by our Baby Boomer p…

You should check this out: http://www.richdad.com/Rich-Dad-Games/CASHFLOW.aspx

The idea of home ownership is that you aren't even (really) paying rent. You are investing and the money should return at some point in your life.

It's reasonable to conclude that your house could lose money, BUT there is a reason real estate companies exist. If you purchase homes with a focus on investing (and perhaps living there for a time) you will come out ahead.

Re: San Francisco, I Love You But You’re Bringing Me Down

#352

Post by kpennell »

api wrote: post #200
cwilson wrote: post #187

Earlier quoted context omitted.

I was born and raised in Austin and used to be one of those people who said they would never leave. I fought very hard to make the tech scene in Austin "happen" for years. There are multiple reasons it's taken so long to get to where it is now, which I won't go into here (not relevant to the OP's topic), but one of the main reasons I left to move to the Bay Area is the lack of hustle, or the lack of need to hustle, i…

I am presently in Asheville, North Carolina, another "mellow" place that's probably very much like Austin (except smaller). A lot of $100k freelancers too. I moved here from Boston, and I'm not going to go into why as it's off-topic, but... Yours is an interesting perspective. It seems like both extremes are a double-edged sword. On one hand, slower mellower and less expensive places give you the free time to think a…

"too tweaked out and overpriced"

That's a perfect way to describe it...

Re: San Francisco, I Love You But You’re Bringing Me Down

#353

Post by kpennell »

princess3000 wrote: post #229
cwilson wrote: post #187

Earlier quoted context omitted.

I was born and raised in Austin and used to be one of those people who said they would never leave. I fought very hard to make the tech scene in Austin "happen" for years. There are multiple reasons it's taken so long to get to where it is now, which I won't go into here (not relevant to the OP's topic), but one of the main reasons I left to move to the Bay Area is the lack of hustle, or the lack of need to hustle, i…

I know this probably wasn't your intention but this entire post makes Austin look incredibly attractive.

I tabbed over to http://austin.craigslist.org/ after reading it...

Re: San Francisco, I Love You But You’re Bringing Me Down

#354

Post by geogra4 »

workergnome wrote: post #134
michaelochurch wrote: post #108

Earlier quoted context omitted.

I don't see San Francisco turning into Detroit. It's more likely to follow Pittsburgh's path, and Pittsburgh isn't a bad place to live these days (but it's far from a star city).

What you missed was the twenty years where Pittsburgh turned into Detroit. Losing all of your industry followed by 60% of your population does that do a city. As a Pittsburgher, it's a good city with ambitions to be great, but it took a generation to get there.

As a former Pittsburgher (now Detroiter) The cities are culturally very different, even if economically their paths were similar.

Pittsburghers really believed in their city, even through the tough economic times. If anything I miss about Pittsburgh it would be that. An older generation of suburban Detroiters would simply have no second thoughts if the City of Detroit burned to the ground. That was one of the most jaw dropping things about moving here, the lackadaisical attitude towards the state of the city among the older generation.

Although IME it actually seems like the tech industry in Detroit is humming along quite nicely. The auto industry is back again and there's a resurgence of startup and entrepreneurial spirit around these parts. My company is hiring like mad.

However I feel like the local economy is struggling to find people who will actually move here. Even if there are perfectly livable areas in the region, very few people have a good mental image when you say "I'm moving to Detroit!"

Re: San Francisco, I Love You But You’re Bringing Me Down

#355

Post by voidlogic »

enraged_camel wrote: post #164
api wrote: post #30

I've got a possibly great job offer on the table from SF/SV, but may turn it down. I'd love the city I'm sure, but after glancing around I've come to the conclusion that home ownership is unthinkable to anyone who hasn't had a cash-out event. The real estate market is certifiably, utterly bat-dookie insane. NYC is often considered more expensive, and Manhattan is certainly... well... Manhattan. But taken collectively…

>>I'd love the city I'm sure, but after glancing around I've come to the conclusion that home ownership is unthinkable to anyone who hasn't had a cash-out event. I've never understood this crazy, if not outright insane obsession with home ownership. Why does everyone want to tie significant amounts of their lifetime earnings into physical property that historically has had very low appreciation in value? It's like pe…

>I've never understood this crazy, if not outright insane obsession with home ownership.

Where many people live you can buy a house that would cost well over a mil in SFO and have it paid off in 3-4 years. Imagine you could live in a very nice house and only pay 2-4k in property taxes a year-

Owning a home makes the post-work, part of your life much more economical too. I would argue that obsession with home ownership is only crazy if you live in many parts of CA, to apply that to the whole country is grossly wrong.

Re: San Francisco, I Love You But You’re Bringing Me Down

#356

Post by batbomb »

muzz wrote: post #264
zaroth wrote: post #239

Earlier quoted context omitted.

What forrestthewoods, api, and zanny are saying is that too few units have been getting built for many years. What you are saying is 'wait, they are coming'. The first is most certainly true. The second may be true, but we'll have to wait and see how it impacts pricing. For now, you can't live in a building permit. BTW, here's a graph of permitting and completions in SF for the last 60 years: http://www.spur.org/file…

There were plenty of foreclosures and short sales in 2010-11, indicating overbuilding (be it because of over-buying / over-lending, regardlesss) in the previous few years (2006-2008). The article is from 2012. There are 140 projects under construction RIGHT NOW.

There weren't many foreclosures. San Francisco represented less than 1% of foreclosures in California despite being 20% of the population, and outcomes for foreclosures didn't end up in the homes being sold as much as it did in the rest of the country.

For example (not in 2010-2011 range) in 4th quarter 2011 Sacramento lost 2200 homes to foreclosure vs. 160 for SF.

Foreclosures don't indicate overbuilding, they indicate that people can't afford to pay for their homes.

Re: San Francisco, I Love You But You’re Bringing Me Down

#357

Post by LanceH »

gdilla wrote: post #288
brownbat wrote: post #247

Earlier quoted context omitted.

The Harlem numbers make a good point, both renting and buying involve unrecoverable costs. But it's is a case by case question as to whether one set of costs is higher than the other. Where I live, my rent and utilities are higher than the cost of property taxes, HMO fees, utilities AND mortgage payments for an equivalent townhome. My market's the other extreme from Harlem. Paying less per month for the same thing se…

Also, if you buy, your cost of moving is WAY higher. unless you can know to a high degree of certainty you're staying put for 10+ years at least, renting keeps you mobile. Not everyone can telecommute. Many people should be more mobile to go where jobs are, and that's easier when you're renting.

If you rent, the cost of staying may be completely out of your control. Indeed, it may not even be possible.

For those of us who want to stay in one place, this is a really good thing. If I want to invest in a workshop in the house, that's a good thing.

My house is mine, and some of the things I have here just aren't available to rent.

Re: San Francisco, I Love You But You’re Bringing Me Down

#358

Post by pchristensen »

muzz wrote: post #335
EternalFury wrote: post #324

Earlier quoted context omitted.

These don't indicate overbuilding. It just means you are off the cliff as soon as your cash flow turns negative. Buying a house in this area is like condemning yourself to walk around with a huge sword hanging above your head.

If declining prices-- as what happened from 2007-2010-- don't indicate overbuilding, what does? Anything?

Declining prices are much more due to changes in the economy (in this case, a recession), not the housing supply. Aggregate incomes and wealth dropped a lot during that time.

If you were looking for something that indicated overbuilding, I would look for declines in the ratio of rents/sale prices to median metro income. If housing is getting cheaper compared to incomes, that means supply is catching up to or outstripping demand. This could happen regardless of boom, bust, or stagnation.

See http://www.usnews.com/news/best-cities/slideshows/the-10-mos... and http://money.cnn.com/gallery/real_estate/2012/11/29/least-af... for examples.

Re: San Francisco, I Love You But You’re Bringing Me Down

#359

Post by pchristensen »

api wrote: post #30

I've got a possibly great job offer on the table from SF/SV, but may turn it down. I'd love the city I'm sure, but after glancing around I've come to the conclusion that home ownership is unthinkable to anyone who hasn't had a cash-out event. The real estate market is certifiably, utterly bat-dookie insane. NYC is often considered more expensive, and Manhattan is certainly... well... Manhattan. But taken collectively…

"I've got a possibly great job offer on the table from SF/SV, but may turn it down."

This is what will kill the golden goose of the tech economy - if highly qualified and valuable workers choose not to move to SF/SV because they don't think they can live there, the tech sector will lose competitiveness. I moved here after 6 years of uncertainty, and I think it's worth it but the fact that I wanted to and still waited so long is a bad sign.

Workers are the key resource for new tech businesses, and if companies can't hire them, they won't grow or be formed in the first place.

Re: San Francisco, I Love You But You’re Bringing Me Down

#360

Post by pchristensen »

potatolicious wrote: post #173
hindsightbias wrote: post #129

Earlier quoted context omitted.

> build more Clearly, higher density construction in NYC has dramatically reduce prices there. There is no amount of construction in the subset of 49 square miles trendies want to live that is going to solve this problem. There are a million 1%'ers from around the world that will snap up a $750K condo before you 5%'ers can get it.

> "Clearly, higher density construction in NYC has dramatically reduce prices there." They have.[1] Or more accurately, they have prevented the exact sort of rent explosion that SF is experiencing now. Manhattan is expensive to live in - but rent prices are growing at predictable and relatively low rates. There are even desirable, wealthy neighborhoods where rents are slowly decreasing . The fact is also that artific…

You'd have to include BART-accessible Oakland, Berkeley, etc in the East Bay to make that comparison fair. 40 min is the farthest any of the BART lines go from downtown SF.
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