Earlier quoted context omitted.
Please report back in February after experiencing a -40 day :)
-40C or -40F?
-40°C = -40°F.
San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
221–230 of 640 posts
Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
#222Earlier quoted context omitted.
1) 'Marginal buyers' could explain it - but it might be something else. There is a smaller group of buyers, investors, of the inelastic type - who if they run away, will cause a market to plummet. They are the opposite of price sensitive, they're maybe from overseas snapping up property at 'above asking' because they need to get $1M out of their countries and they're looking for any kind of return that's reasonable.…
The "yellow peril" theory that Bay Area housing bubbles are caused by foreign money laundering is popular on Nextdoor but I think on HN you're going to need some evidence. Prior to this pandemic 97% of dwellings in San Francisco were physically occupied by actual living people. Nobody is parking money in empty SF condos. It's true that investors are attracted to Bay Area real estate, because the government has dedica…
1) 'Occupation' less of an issue, it's 'Ownership'. Foreign owners can rent homes out. Though it's such a problem in Vancouver, they are now taxing empty homes for precisely this reason [1]. Maybe SF should follow suit.
2) That foreign ownership is a primary factor in the rise of home prices in SF, Van, Toronto is completely unambiguous. There's plenty of evidence. The degree of impact is still debatable, but not that it's a major influence. [2]
From those articles you can see the type of demand is 'inelastic' - this is key to understand because it's not just 'a few more buyers'. 2-8% foreign ownership wouldn't mean much at all if they represented the 'same type of buyer' as local buyers. It would be just a small nudge in demand. But the terms they are seeking are completely different and the inelasticity is what makes their kind of demand potent.
3) 'Yellow Peril' (?!?) holy camole. There are foreign buyers from all over the world, it's a big place.
4) This is not just an SF phenom. New Zealand has banned foreign ownership [3]
[1] https://vancouver.ca/home-property-development/empty-homes-t...
[2] https://phys.org/news/2020-09-foreign-homes-impact-prices.ht...
[3] https://www.thestar.com/opinion/contributors/thebigdebate/20...
Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
#223Personally 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…
I think you missed an important part: the people. There’s LGBTQ+ culture, Latino culture, startup culture, etc. People like being around people like them. Unless other cities can recreate these agglomerations, SF will still be a destination for a lot of people.
Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
#224Earlier quoted context omitted.
yep - rent is the quintessential example of inelastic supply. A tiny shortage of housing can cause a huge jump in price.
> rent is the quintessential example of inelastic supply. A tiny shortage of housing can cause a huge jump in price. You'd need inelastic demand for this, not inelastic supply.
Demand used to be inelastic; the new normal (remote work) removes this
Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
#225I 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…
They will go where the biggest salaries are, as they always did.
Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
#226Earlier quoted context omitted.
Chinese has had a huge influence on markets like Vancouver BC. In the USA west coast, tech jobs are much more of a factor, though many of those techies happen to be Chinese (but many are also Indian, American, Russian, and so on...). My aunt in West Seattle had people make unsolicited bids for her house (that wasn’t in the market), but these people were Indian (and they could have as easily been Chinese, Russian, Ame…
A guy rang my doorbell in Oakland and brandished a bank check for well over a million dollars to buy my house. He was a white American, though, so I don't get to build an awkward racist narrative around that event, I guess.
People come from different parts of the world, different things are happening in different places, it means Americans may be more likely to be out and about doing one thing, the French another, the Chinese another.
That there are 'differences' in are world is the uniquely qualifying aspect of diversity itself. 'Diversity' is not 'racist'.
Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
#227Earlier quoted context omitted.
> cost savings of moving is so great that it was cheaper to pay to break the lease than it would be to stay What's the law on this? I've read that the landlord is required to make a good faith effort to replace you, but if they can't (or if they can't recoup the costs), you are on the hook. So if the cost is 32% lower and the landlord can only find a tenant willing to pay that much, it seems like you are responsible…
there are ways to break a lease without penalty; I'd guess the qualifying circumstances vary state to state. also, some leases have explicit buyout clauses. I can get out of my current lease free and clear at any time by giving sixty days notice and paying an additional ~$2000 (a bit more than one month's rent). so if rents collapsed soon after renewing my lease, I could break even pretty easily by moving out.
Okay - I was talking specifically about California.
Most leases in SF do not have buyout clauses of this form I believe.
Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
#228> 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?…
I’m one of these people who just moved out of SF. AMA.
Where did you move to? What was your rent and what is it now? Do you plan to move back?
Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
#229Personally 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…
I think you missed an important part: the people. There’s LGBTQ+ culture, Latino culture, startup culture, etc. People like being around people like them. Unless other cities can recreate these agglomerations, SF will still be a destination for a lot of people.
Perhaps, but -- not at the moment!
Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.
#230I 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.