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Home Values Are Rising by $800 a Day in San Jose

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Re: Home Values Are Rising by $800 a Day in San Jose

#91

Post by tehlike »

AceJohnny2 wrote: post #14
ninkendo wrote: post #4

Lived in a rental house in SJ for 7 years now watching prices go up and deciding to sit it out, after having lost 30% on my house in the midwest years ago. I’m kicking myself for not buying earlier, but not a chance you’d get me to buy in now. We’re in a bubble that’s ready to burst IMO.

> We’re in a bubble that’s ready to burst IMO. Not necessarily. Bubbles are based on speculation. The last bubble was powered by sub-prime mortgages, which is what burst. The Bay Area has the problem of ongoing immigration, a very highly paid demographic, and housing market that isn't keeping up. Simply, Offer Offer isn't looking to catch up any time soon [1], and demand crashing would mean the tech economy will have…

The thing with subprime mortgages is, noone saw it coming. How do you know some other forces are at play in todays market? Forces that may not be true in the blink of an eye?

Not saying it is gonna burst, and i see the factors, but theyw ere there in 2008 too.

Re: Home Values Are Rising by $800 a Day in San Jose

#92

Post by diogenescynic »

pascalxus wrote: post #17
ninkendo wrote: post #4

Lived in a rental house in SJ for 7 years now watching prices go up and deciding to sit it out, after having lost 30% on my house in the midwest years ago. I’m kicking myself for not buying earlier, but not a chance you’d get me to buy in now. We’re in a bubble that’s ready to burst IMO.

Well, it's worse than a bubble. It's a genuine mass-scale shortage of housing. I don't think housing prices will crash down anytime soon based on all the pent up demand. But, much of it depends on how much hiring Google and other companies decide to do. If they keep hiring, Real estate will continue to go up.

Eventually they’re either going to lobby and change the laws-they will always get their way-or eventually hiring will slowly shift out of California. If the Bay Area had built more housing and kept housing prices in the realm of affordability I doubt Austin, Denver and many other cities would have half the tech scenes they have. One city’s loss is another’s gain. California is the real loser though in the situation which is why the should fix the housing restrictions on a state level and step in to overturn some of the stupid laws we have (like capping homes to 4 stories).

Re: Home Values Are Rising by $800 a Day in San Jose

#93

Post by seanp2k2 »

rubicon33 wrote: post #30
pcwalton wrote: post #28

Earlier quoted context omitted.

I just bought a condo in SF myself. It was an agonizingly difficult decision that I had been contemplating for years and years before finally taking the plunge. Some of what drove my decision was that most experts don't believe that the Bay Area real estate market is a bubble [1] [2]. (I wouldn't wish the anxiety around this decision on anyone, least of all future generations, which is why I've resolved to buck the t…

If you're in it for the long haul, then it was a very wise decision. The bay area, specifically San Francisco, is one of the best real estate purchases anyone can make. It's geographically constrained and has historically shown to gain value over the past 100 years CONSISTENTLY. There will be some small bumps in the road here or there, but when you look back in 20, or 30 years, I can almost guarantee you're going to…

The thing holding me back is that I don't think it's sustainable to have small single-family homes going for >$1m in tear-down condition. It might not get hit with a huge correction, but I can't see these properties being worth $5m in 2028. No one can predict the future, but I don't see how it can keep going at anywhere near the pace it's currently going.

Re: Home Values Are Rising by $800 a Day in San Jose

#94

Post by htormey »

hiram112 wrote: post #86
htormey wrote: post #38

Earlier quoted context omitted.

I’m not so sure. Many tech related jobs are fundamentally hard things for the majority of people to do. Even those with college degrees. The problem with a bad hire in tech is that they can be worse than useless. Mentoring a junior software engineer can be very expensive and not many companies want to do that in an environment like the Bay Area where people hop between jobs frequently. Personally I think this is very…

Tend to agree. Law went through a huge spike in graduates and private law schools last decade, and when the economy hit bottom, many lawyers felt the worst of it, especially recent grads who've still never really been able to get a foot in the door, while still paying off six figures of law school debt. The difference between law and software engineering is that you can't really BS your way in software for too long w…

I agree, the situation with law school a few years ago is a good analogy. Just because you got a degree from a random law school school doesn’t mean you are going to cut it in the real world.

My girlfriend is a lawyer who is transitioning to become a UX researcher via a bootcamp. The general standard of people in her bootcamp clas is quite high. On the young end you got recent grads from top tier schools (UC Berkeley English) on the older end of the spectrum you got a VP of marketing who’s worked at reasonably high profile consumer brands and who has a pretty good undergrad degree. Some of these bootcamps can be quite selective and aren’t easy to get into. They want highly motivated people who are smart. Those kinds of people are in short supply.

Re: Home Values Are Rising by $800 a Day in San Jose

#95

Post by poof131 »

taurath wrote: post #41

I have a pretty large group of generally geek-oriented friends across most of the western US, and tracking their migration patterns has been fascinating - we're basically all 1980's-born millennials. In the 2000's was when we met, those who had grown up there and those who were moving were in the same age group. Only about 40% were college educated or in tech/programming oriented roles. Of those, a small amount has r…

It’s both. There clearly is a bubble. The Fed has essentially dumped easy money into the economy since the dotcom bust. 2008 saw another crash and again the spigots were opened. It only seemed to flow to certain areas though as top down economic policy tends to do. Now as the Fed raises rates, people can borrow less and thereby afford less. We may see zero percent interest rates forever and the government stepping in to prop up asset prices like Japan, but who knows for sure. [1, 2]

But California also has a unique factor, proposition 13. [3] This drastically disincentives people from moving. Palo Alto has the lowest property tax rates in the state.[4] Why move when you will pay significantly more monthly. This is especially pertinent to retirees. So no one moves which destroys market liquidity. Combine this with NIMBYism, an over abundance of protected lands, rent control, affordable housing measures and piss poor public transportation, and you get the shit storm that is the Bay Area housing market. Tech is simply a convenient excuse. There’s a reason California is building a bullet train between SF and LA, but no public transportation from the east bay to the peninsula which would help an enormous number of workers and the environment. Despite lofty rhetoric, people vote their self interests.

[1] https://www.wsj.com/articles/bank-of-japans-50-billion-quest... [2] https://www.zerohedge.com/news/2017-09-11/wtf-chart-day-boj-... [3] https://medium.com/@michaellevinson_64108/landlords-and-heir... [4] https://www.mercurynews.com/2016/12/01/high-priced-californi...

Re: Home Values Are Rising by $800 a Day in San Jose

#96

Post by taurath »

nostrademons wrote: post #73
taurath wrote: post #41

I have a pretty large group of generally geek-oriented friends across most of the western US, and tracking their migration patterns has been fascinating - we're basically all 1980's-born millennials. In the 2000's was when we met, those who had grown up there and those who were moving were in the same age group. Only about 40% were college educated or in tech/programming oriented roles. Of those, a small amount has r…

> Colorado is now seen as the last "cool" place thats "affordable" and liberal (sorry screaming Coloradan's, you're next). Asheville, NC is coming up after Colorado - I've got one friends-couple that's actively moving there this summer, and a couple others that are thinking seriously about it. > I wonder what this all will look like when we look back 20 years hence There was an interesting throwaway comment in Carlot…

The one thing I have never seen yet of any of that large group is a move to the east coast. It’s as foreign as can be though some have spent a bit of time in NYC for work. I think the cultural “west” is still where these people will stay for the time being.

Re: Home Values Are Rising by $800 a Day in San Jose

#97

Post by tehlike »

ericd wrote: post #80
sidlls wrote: post #32

Earlier quoted context omitted.

2% in SJ? That's insane. I'm paying 0.35% of the average sale price in rent for a townhouse in my community (San Mateo/Burlingame area).

Both are insane, when you consider property tax and maintenance, unless you assume a continued upward march in valuations.

That is exactly why cap rates are squeezing.

Re: Home Values Are Rising by $800 a Day in San Jose

#98

Post by blondie9x »

We need to build much more dense places that people can actually own.

The housing situation is not sustainable. Many people end up living on the streets because affordable housing isn't available. There is too much demand and we aren't building dense enough to utilize the land available.

Re: Home Values Are Rising by $800 a Day in San Jose

#99

Post by taurath »

poof131 wrote: post #95
taurath wrote: post #41

I have a pretty large group of generally geek-oriented friends across most of the western US, and tracking their migration patterns has been fascinating - we're basically all 1980's-born millennials. In the 2000's was when we met, those who had grown up there and those who were moving were in the same age group. Only about 40% were college educated or in tech/programming oriented roles. Of those, a small amount has r…

It’s both. There clearly is a bubble. The Fed has essentially dumped easy money into the economy since the dotcom bust. 2008 saw another crash and again the spigots were opened. It only seemed to flow to certain areas though as top down economic policy tends to do. Now as the Fed raises rates, people can borrow less and thereby afford less. We may see zero percent interest rates forever and the government stepping in…

Prop 13 doesn't exist in Seattle, yet prices are rising as fast or faster than the bay (on a percentage basis). There the lesson is supply/demand - there is only 1 month or less of housing stock available, when 6 would be a historically median market. Everyone is going crazy to buy something as fast as possible before they get left behind.

Absolutely though Prop 13 hurts liquidity in California though. There's a lot of factors, nobody can agree on them, so we're stuck with this massively overheated market.

Re: Home Values Are Rising by $800 a Day in San Jose

#100

Post by reilly3000 »

taurath wrote: post #99
poof131 wrote: post #95

Earlier quoted context omitted.

It’s both. There clearly is a bubble. The Fed has essentially dumped easy money into the economy since the dotcom bust. 2008 saw another crash and again the spigots were opened. It only seemed to flow to certain areas though as top down economic policy tends to do. Now as the Fed raises rates, people can borrow less and thereby afford less. We may see zero percent interest rates forever and the government stepping in…

Prop 13 doesn't exist in Seattle, yet prices are rising as fast or faster than the bay (on a percentage basis). There the lesson is supply/demand - there is only 1 month or less of housing stock available, when 6 would be a historically median market. Everyone is going crazy to buy something as fast as possible before they get left behind. Absolutely though Prop 13 hurts liquidity in California though. There's a lot…

The growth management act seems to engender a similar effect. It primarily limits new construction. I think Seattle’s charms also make it sticky for its permanent residents.
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