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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

#51

Post by dllthomas »

steven2012 wrote: post #25
dllthomas wrote: post #14

Earlier quoted context omitted.

"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.

That is not necessary. If prices get so high that no one wants to or can afford to live in SF, then the prices will naturally decline. I'm old enough to be a crusty dot-com boom veteran. Rent prices were about as crazy as they were today, except it was more in the South Bay than SF, so no one appeared to care as much. My 2 br apartment in the South Bay went from $1700/month to $2300/month after the lease was up. We h…

"So, the supply-demand equation is very real, and at some point, prices will abate."

Only if demand goes down or supply goes up. The dotcom bust was an example of demand going down, but I don't see that it had anything to do with the high price of housing.

"Nothing goes up forever."

I don't think you can count on anything going up forever, but I'm not sure I would want to bet too heavily on any particular thing not going up forever - particularly when you consider that something could "go up forever" while having a horizontal asymptote.

Note that I'm not saying nothing else can solve the problem - another decline in tech certainly would - but for it to be the high prices that solve the problem requires those high prices be able to motivate useful behavior.

Re: The Housing Market With Nowhere to Go but Up

#52

Post by dllthomas »

wyclif wrote: post #20
SamReidHughes wrote: post #12

Earlier quoted context omitted.

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.

I'm not sure the companies moving there think "good employees" can want to own a home or have children.

Re: The Housing Market With Nowhere to Go but Up

#53

Post by DannyBee »

enraged_camel wrote: post #37
steven2012 wrote: post #25

Earlier quoted context omitted.

That is not necessary. If prices get so high that no one wants to or can afford to live in SF, then the prices will naturally decline. I'm old enough to be a crusty dot-com boom veteran. Rent prices were about as crazy as they were today, except it was more in the South Bay than SF, so no one appeared to care as much. My 2 br apartment in the South Bay went from $1700/month to $2300/month after the lease was up. We h…

>>That is not necessary. If prices get so high that no one wants to or can afford to live in SF, then the prices will naturally decline. I think you have a fundamental misunderstanding of the problem. For people outside the tech industry, this is already becoming the case. This is why entire neighborhoods are being gentrified: middle and lower-middle class can no longer afford to live there. Tech workers though? Thei…

I'm not sure what your concern is here. What makes you assume these people live in the city?

While the cartoon is cute, One of two things will happen:

1. The service will decline, people will complain, and the salaries will increase until they are enough to live in the city, or attractive enough to someone to commute.

2. The service won't decline, because these people were not living in the city anyway.

Most of the police officers i knew for DC, for example, lived in the suburbs of Maryland (a 1 hour commute).

I doubt most teachers in the bay area were living in SF, they were priced out of the market a long time ago.

Re: The Housing Market With Nowhere to Go but Up

#54

Post by skybrian »

fennecfoxen wrote: post #3
melling wrote: post #2

“It’s a block away from all the tech shuttles,” Sounds like the secret to making any area an attractive place to live is by making it covienent to mass transit. So, add more [fast] mass transit so people can live in more places.

Egads. The capital expenditures.

Buses don't require a lot of capital, which is why there are tech company shuttle buses and not tech company train lines. It would make sense to make public buses work better (more dedicated lanes, more expresses, and so on).

Also, tech companies are already outsourcing shuttles to contractors. Those contractors could run other lines if someone were willing to pay them.

If it made sense for the tech companies to pay the city to run buses then they probably would. The question is how to provide better service while serving the general public.

I wonder if a company like Uber would eventually start running buses?

Re: The Housing Market With Nowhere to Go but Up

#55

Post by jhonovich »

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.

Hypothetically, if they could move/live wherever they wanted, what percentage of the people who live in SF/SV would choose to leave? Are we saying none or something trival like 5% or 10%?

Re: The Housing Market With Nowhere to Go but Up

#56

Post by OGC »

kleiba wrote: post #33

I just saw a report on TV about how gentrification in New York City has started to reach even the upper middle class, with young families north of $100,000 per year can no longer afford to stay in their Brooklyn neighborhood. In Manhattan, the super-rich of Russia, China, but also Europe have found a trendy place to buy luxury apartments that they then only use rarely. Not only workers, but also people with high-inco…

These luxury appartments are investment/speculation vehicles not actual places to live in.

Re: The Housing Market With Nowhere to Go but Up

#57

Post by savvyraccoon »

coldcode wrote: post #42

I would have no trouble finding a job in that area. But why live in a place where even a ridiculous salary is proportionately less than just about anywhere else? If you are competing with stockified millionaires no salary will ever compete. My 2000sf house here in Texas in worth $160,000. In SF it's probably ten or even twenty times that. Can I get paid ten times my salary here? Hell no.

Why do you compare the whole state with on city? You could easily find 2000 sf house in California for $160,000.

Re: The Housing Market With Nowhere to Go but Up

#59

Post by discard »

rwmj wrote: post #32
kiba wrote: post #4

At the end of the day, the solution is straightforward and clear: build more houses. The only problem is that humans in SF don't want more houses, especially high rise housing.

The solution is also "work remotely from somewhere nice". I like the short walk to my garden office every morning. In summer I can pick some fresh fruit and veg along the way for lunch. The company I work for (Red Hat) has a huge contingent of remote workers. We work on IRC, by email and (oh the irony) Google Hangouts.

I also work for Red Hat. While the degree of remote working varies by department, it is substantial, appears to occur at many hierarchical levels on the management chain, and seems to work out pretty well. Also occurring in some cases, and somewhat related, is working out of a 'satellite' office rather than one of the major offices of a particular country. I'm surprised that more tech companies do not allow or encourage such arrangements. The arguments in favor of generally prohibiting remote working strike me as rather flimsy.

Re: The Housing Market With Nowhere to Go but Up

#60

Post by bilbo0s »

_greim_ wrote: post #26
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…

Yes but hysteresis effects likely come into play where actual price points can't keep up with ideal market price points when the ideals change quickly. E.g., residents would balk at a $30 Chipotle burrito (I'm guessing here) even if that's the price it would need to be for a Chipotle owner to break even. By the time residents update to the "new normal", the damage is already done.

I think you may be missing the point...

there would be no Chipotle if the housing prices kept going up.

Or if there was, it would be a tourist stop and would certainly make its money on volume. Basically, it would be like that god awful McDonald's on the Champs Elysee.

In any case, the price for it's burritos would, in all likelihood, not rise to an unaffordable number. At the same time, local residents would not make up the bulk of its customers.

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