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The Housing Market With Nowhere to Go but Up

bits.blogs.nytimes.com

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Re: The Housing Market With Nowhere to Go but Up

#11

Post by greenyoda »

"Nowhere to go but up"? How quickly we forget the last housing bubble. If the price of housing goes up faster than the salaries of the people who want to buy it, eventually we'll get to the point where demand will drop sharply: someone with a $100K income and $100K in student debt just won't be able to get a mortgage for a $2M condo. As demand drops, housing prices will drop, and people who bought into the market at the top, sure that their investment could only increase in value, will start to panic.

There are other possible scenarios for a housing market plunge in SF. For example, if California tries to sharply raise taxes to help pay for their huge government infrastructure, tech companies may decide that they don't want to be in California anymore. They're already hedging their bets. For example, Google has a sizable presence in NYC. When the first big tech company announces that they'll be moving out of Silicon Valley, the housing market will take a dive.

And it's not impossible to run a big tech company outside of Silicon Valley. Microsoft and Amazon seem to be doing OK in the Seattle area. The higher housing prices go in San Francisco, the easier it will be to recruit people to go elsewhere.

Re: The Housing Market With Nowhere to Go but Up

#12

Post by SamReidHughes »

wyclif wrote: post #6

I could write yet another boring comment about how hypocritical and stupid longtime SF residents are because they complain about rising housing costs or being priced out while simultaneously voting to prevent more housing from being built, but I'd rather ask a serious question: Why do all these Bay-area startups and tech juggernaughts insist that all of their employees squeeze into housing on the peninsula? Of course…

The companies move to where the good employees want to live so that they can hire and retain good employees. I hope that explains that for you.

Re: The Housing Market With Nowhere to Go but Up

#13

Post by mjn »

wyclif wrote: post #5
fennecfoxen wrote: post #3

Earlier quoted context omitted.

Egads. The capital expenditures.

And don't forget the infamous SF NIMBYs.

It's one issue, but I think you could overcome NIMBY opposition if the money were there. Even traditionally transit-averse LA (finally) managed to overcome the NIMBYs who had blocked the purple line in the 1990s, and is building it now. But the cost of the transit that could usefully be built in the SF Bay Area is really high, so high that it's never really had serious funding prospects and made it to the political-wrangling stage. For example, the transit situation within SF would be a lot better if a crosstown subway replaced the N-Judah or the Geary bus, but there aren't any current prospects for funding such a thing, so the Geary BRT is being built as the low-cost option.

The BART extension to San Jose is also mostly hitting cost issues rather than NIMBY issues. It's currently going to extend to... almost San Jose, the north outskirts, because the funding secured so far isn't enough to build the final portion through to downtown and connect to Diridon.

Re: The Housing Market With Nowhere to Go but Up

#14

Post by dllthomas »

steven2012 wrote: post #9

My wife and I are technically 1%-ers, and we could not oompete enough to buy a house in SF. We gave up and moved to the peninsula. As the article described, one house we bid for had 20 bidders. We bid over $200k above asking, and we were 10th out of 20 bidders. The winning bid was $400k over asking. But am I resentful? No. It's the reality of the situation. For those that are bitching and moaning about not being able…

"The best cure for high housing prices are high housing prices."

Provided you have the possibility of actually building more (and/or denser) housing at a sufficient rate.

Re: The Housing Market With Nowhere to Go but Up

#15

Post by dllthomas »

SamReidHughes wrote: post #12
wyclif wrote: post #6

I could write yet another boring comment about how hypocritical and stupid longtime SF residents are because they complain about rising housing costs or being priced out while simultaneously voting to prevent more housing from being built, but I'd rather ask a serious question: Why do all these Bay-area startups and tech juggernaughts insist that all of their employees squeeze into housing on the peninsula? Of course…

The companies move to where the good employees want to live so that they can hire and retain good employees. I hope that explains that for you.

The alternative proposed was "distributed, remote employee base", which - if it worked - would let you hire and retain good employees wherever they wanted to live (even if they didn't all want to live near each other). So your explanation alone doesn't address the issue.

Re: The Housing Market With Nowhere to Go but Up

#17

Post by encoderer »

greenyoda wrote: post #11

"Nowhere to go but up"? How quickly we forget the last housing bubble. If the price of housing goes up faster than the salaries of the people who want to buy it, eventually we'll get to the point where demand will drop sharply: someone with a $100K income and $100K in student debt just won't be able to get a mortgage for a $2M condo. As demand drops, housing prices will drop, and people who bought into the market at…

You didn't read the article and it's obvious. Just delete your whole comment. Trust me.

Re: The Housing Market With Nowhere to Go but Up

#18

Post by repsilat »

greenyoda wrote: post #11

"Nowhere to go but up"? How quickly we forget the last housing bubble. If the price of housing goes up faster than the salaries of the people who want to buy it, eventually we'll get to the point where demand will drop sharply: someone with a $100K income and $100K in student debt just won't be able to get a mortgage for a $2M condo. As demand drops, housing prices will drop, and people who bought into the market at…

> "Nowhere to go but up"? How quickly we forget the last housing bubble.

The title was an obvious pun, referring to the need for high-rise development (which was touched on in the article, though it wasn't the focus.)

Re: The Housing Market With Nowhere to Go but Up

#19

Post by LogicX »

SamReidHughes wrote: post #12
wyclif wrote: post #6

I could write yet another boring comment about how hypocritical and stupid longtime SF residents are because they complain about rising housing costs or being priced out while simultaneously voting to prevent more housing from being built, but I'd rather ask a serious question: Why do all these Bay-area startups and tech juggernaughts insist that all of their employees squeeze into housing on the peninsula? Of course…

The companies move to where the good employees want to live so that they can hire and retain good employees. I hope that explains that for you.

Which came first? Do people want to be in SF - or are they there because there are jobs?

Anecdotal, but I know people who live in SF who would rather be back in Myrtle Beach, SC - as soon as there's a similar opportunity or a remote work opportunity for them.

The quality of life and work-life balance is not in SF for them.

wyclif: I agree that more companies will solve this problem with distributed, remote teams - which is what we're leveraging to attract those folks to the Beach. http://WhyNotTheBeach.com

Re: The Housing Market With Nowhere to Go but Up

#20

Post by wyclif »

SamReidHughes wrote: post #12
wyclif wrote: post #6

I could write yet another boring comment about how hypocritical and stupid longtime SF residents are because they complain about rising housing costs or being priced out while simultaneously voting to prevent more housing from being built, but I'd rather ask a serious question: Why do all these Bay-area startups and tech juggernaughts insist that all of their employees squeeze into housing on the peninsula? Of course…

The companies move to where the good employees want to live so that they can hire and retain good employees. I hope that explains that for you.

It doesn't explain that at all. Not all of the "good employees" want to live in SF, especially if they want to own a home or have children. The point is that it's not necessary to ask people to live in places where there's all this stress surrounding finding a place to live, finding a good school for your kid, and having a decent quality of life.
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