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 ridden the wave to prosperity. Most moved to Seattle (if looking for a career/home/etc), or Portland (if they pass the weird-test). There's been a steady trickle out of the Bay for anyone not in tech for the past decade, and now I think only 10% of them still remain. Now they're going to Colorado rather than Seattle, and a few more to Portland. Those that are currently missing the wave in Seattle are looking at moving to Colorado.
I have no idea which area is gonna be next - Colorado is now seen as the last "cool" place thats "affordable" and liberal (sorry screaming Coloradan's, you're next).
Personally, I just can't believe its gone on this long - the pressure release valve that I thought would be released from the bay every year for the last decade hasn't fully let go. Career or being able to afford a house seem to be mutually exclusive ideas if you're not in programming. This is creating a rather nomadic culture within my friend groups... welp, this area is too expensive, might as well move onto the next. Very few are putting down roots.
I wonder what this all will look like when we look back 20 years hence - was it really a bubble, or the creation of a permanent Elysium style class divide between those that had the capital (or took the risks) early, and those who didn't start out as well (or were conservative in leveraging themselves)? Every day it feels like I'm leading more towards the latter.
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.
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.
It privileges long time titleholders over newcomers, in addition to the basic problem of land speculation being exacerbated, allowing random titleholders to capture even more of the gains of surrounding economic development that they, in their role as titleholder, played no necessary role in.
In fact, by effectively being a tollbooth operator upon the prerequisites for economic development they are an active hindrance. Land titles are necessary, but it is not necessary that they keep the land rent, only the improvement values that they are responsible for.
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.
The housing stock here is too low to not just hold on. There’s no guarantee you’ll get another desirable place if you sell, unless it’s for an upzone in which case you can move up from developer money.
It's easy to have high percentage growth when you start from relatively small magnitudes. When I moved to Seattle from the East coast, I was surprised with how cheap everything was given all the complaints I'd heard.
Seattle is catching up with the other big cities, but it's still lower cost. Especially given how new the buildings are.
Prop 13 is perhaps the biggest reason for the lack of supply. The other reasons you mention (zoning, NIMBYism, etc.) are also big contributors.
But tech is where the demand comes from. The median home price in Santa Clara county is almost $1.3M, and ~20% of residents can afford that price. Those are tech workers.
Supply has been steadily decreasing for years and years, so I don't see that problem getting solved. Therefore I think we'd need to see a significant drop in the tech industry for prices to slow down.
Would also add that the era of “easy money” even predates 2000 and the dot-coms. You could trace this back to the Southeast Asian financial crisis of 1997, and just generally all the emerging market crises of the mid to late 90’s (Mexico, South America, Southeast Asia, Russia).
One of the reasons we got the dot-com bubble, even though the Fed was aware of it, was that they were more afraid of instability from the emerging markets than a domestic bubble. That fear was certainly justified, but nonetheless the dot-com bubble was still enormous.
Proposition 13 doesn't really discourage most retirees from moving because Propositions 60/90 allows homeowners over age 55 to transfer their base year value once.
> 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 Carlota Perez's Technical Revolutions and Financial Capital (written in 2002). She's famous for her observation that each technological revolution tends to lead to a financial crisis that separates the "Installation" phase (governed by financial capital, and marked by successive asset bubbles & widening wealth inequality) from the "Deployment" phase (governed by production capital, and marked by a widespread dissemination of best practices and corresponding productivity gains throughout the economy).
Less famously, the book also mentions that towards the end of the "frenzy" period (the latter half of the Installation phase), you get a phenomena of "two monies". Any prices connected to the new means of production - stock values, salaries, real estate in key cities, etc. - grow exponentially, while the old economy remains stagnant. Eventually, the divide leads to war, with regions that have adopted the new production techniques battling rump states of the old declining empires. That's as far as the book goes, but the historical implication - based on the early 20th century examples of the Ottoman Turks, Czarist Russia, Imperial China & feudal Japan - is that societies that cling to the old ways collapse, and their leadership is exterminated. Those who aren't killed and who are adaptable enough to adopt new techniques find places within the victorious societies, which then start focusing their efforts on spreading the new production techniques widely within the society to equalize social divisions and cement the new order. Think of the GI Bill after WW2, the widespread suburbanization, mass production of the automobile, consumer goods, department stores, the Civil Rights Act, and so on.
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.
I think it depends how big it must be to consider "large", but there are tons of California ex-pats living in the Raleigh-Durham area, still working in tech/biotech/pharma/engineering, often for CA-based companies. Most of them arrived in NC because of CoL reasons, having sold a family home in CA and paid cash for a much nicer one in RTP... then likely a beach house a few years later.
If you've experienced life on the west coast, the weather (humidity mainly) on the east coast (and midwest) just doesn't cut it. It doesn't snow enough to have worthwhile skiing, and when it is warm outside, it's uncomfortably humid.
There's plenty of snow for skiing in the Midwest. There just aren't any mountains. In Michigan the 'big' places have 500 or 600 feet of vertical, with the modest outlier literally in the middle of Lake Superior, so it takes forever to get there (http://www.mtbohemia.com/ ).
Yes, I was referring to Northeast about the snow, that have somewhat ski-able "mountains". In general, the quality of outdoor activities is so much greater on the west coast that my friends and I would just fly from NYC for trips than go out locally. Plus you avoid ticks and lyme disease.
I used to live in South Florida (Ft Lauderdale area) and it has so many advantages: warm-to-hot weather year round, plenty of water based recreation, zero income taxes, great dining and entertainment, growing but still reasonable housing prices...
Yet I still moved to the crowded and insane Bay Area because jobs. In FL I was always running that risk that if my current job didn’t work out I’d have few remaining options. And in today’s tough hiring market, where you have to apply to 100 jobs to get 10 interviews to get 1 offer, having few employers around is a massive risk. It’s why I’m forced to stay out in the SF area.
Today's hiring market is tough? I don't know what sector you're in but I think most people would say it's a developer's market at the moment. 2009 was horrible by comparison.
Seattle is already on the path to being SF junior, and house prices are far beyond what is affordable for most. We're not SF prices yet (or hopefully ever) but pretty crazy right now. Sad, because what made the city interesting is being actively driven out.
I believe rent here was stable in January 2018, the first time since 2008. Supply seems to slowly be catching demand. There's still some serious concerns about space to build higher density but the city has not totally locked down new construction or density increases. My neighborhood is largely single-family and there are a number of places that have been demolished recently in favor of town homes and small apartment complexes.
Rents are always stable for a little bit in the winter. To get an accurate picture you have to compare year-over-year, otherwise you're just looking at noise.
Yet the median house price increased by $50k last MONTH. They have a lot of new apartments on the market from the midrise and highrise construction, but almost nothing to own.
More than SF, but not necessarily a lot. I've been looking at the assessor data to evaluate how much development is going on, and it's interesting how the past 5 years have seen a lot of new units going online but they are very small so not a huge amount of new square footage, especially relative to 2003-2008 when a lot of large single-family homes were being built.
To some degree yes but there's still neighborhoods that will reject proposals. There's all sorts of debate on this (just yesterday saw windshield flyers against upzones) - to summarize in a fun way see https://twitter.com/YIMBYwiki/status/951255440481857536
I have family in West Seattle and can sympathize with the increased traffic that increased density has brought. Compared to 10 years ago, it is much more built up but no road infrastructure was upgraded so it has turned into quite a mess.
Yeah, I've thankfully avoided most of the seattle traffic over the years by working remote but have gotten disgruntled with some of the public transit issues (bus bunching problems / stop closures / etc.). On the plus side the density's attracted more services - we have three 'grab n' go' car-rental services (zipcar/car2go/reachnow) and three dockless bicycle rental services (spin/limebike/ofo) which is seemingly more than any city I can think of in the world.
Most folks working at local medium-large businesses seem to get price-reduced orca cards for their daily commute.
They are, but the zoning rules and tight geographic constraints hurt it a lot. There is also a WA law that greatly increases Condo liability - nearly every new building in the city in a midrise or above density building area is built for apartments, not condos. Go look on Zillow - the number of units and houses on the market are EXTREMELY low and have been for a very long time.
This is one of the more frustrating things I see with Seattle and makes me consider moving out - there's more apartment buildings getting built instead of condos. And from what I heard developers (particularly in Portland) are shying away from new projects due to newer city requirements to build more some portion of low-income units within a new building.
When did you move to Seattle? 2011 for me. The city has certainly changed but I'm still unclear on this nebulous culture shift that has supposedly "ruined" Seattle. What was more interesting about Seattle when you moved here vs today?
2004, while I agree it's "not completed ruined", it feels like we're slowly pushing out much of the middle class, and with it, artists and other culturally important folk. Give it 10 years and the only people that will be able to afford the city is one specific income bracket.
I think if you moved to the city post 2010, you probably don't realize what "old Seattle" was like.
There's an art gallery across the street from me. Many coffee shops and restaurants have locally created art for sale. There are all kinds of quirky performances on the street and in local businesses. I can't even begin to find time to attend all the live music shows I would like.
Who are these other "culturally important folk" and why are they so important? Not denying they exist, I just don't know who you are talking about.
I still see a lot of opportunity for middle (or possibly upper-middle) class families to live in Seattle although it is not easy. It seems a lot easier than SFO and entirely within reach to me. Something should be done to make sure this stays within reach but we have to be realistic about how that looks. A single family home on a 1/4 acre isn't gonna fly. You're probably going to be sharing at least one wall with someone.
You are echoing the concern I hear often and I have no doubt that you feel what you are describing but I'm just not convinced that it reflects reality.
I lived in Seattle for the summer of 2009 and while I didn't explore a lot of it back then I don't think it has changed much culturally. I hear the "it's an old Seattle thing you wouldn't understand" cliche a lot too. I'm just surprised nobody can articulate what was different then.
Seattle in the early/mid 90s had a grittier grungier feel. Before that, I remember when the Alaskan ferry docks were still downtown (today they are in Bellevue), it was much more of a lumber jack/plaid/fishing boat feel back then (early 80s and late 70s). Of course, my dad and mom’s impression of Seattle was quite different from mine own, as well.
I visited with my girlfriend in 2015 and stayed in the suburbs where her girlfriend's guy was working for MS. The burbs seemed pretty peaceful and green (older suburb—but I don't know the city). Maybe they were in Redmond proper.
It was a beautiful area, and I could definitely live with that. It's too bad it's pricing people out like that.
We were there only too briefly so we just hit some touristy options like the market and some hipster arcade bar, the Army/Navy, etc.
We live in Toronto and it felt pretty similar overall (though I'd give major points to Seattle for scenery). The same thing is ultimately happening here, too, though. Rents are skyrocketing but wages aren't.
With a lot of the political commotion and the desire for more outdoors activity, I haven't seen much of Canada mentioned in this thread and I'm curious if its landed on the map for anybody. And where?
Contrary to popular opinion I actually enjoy living in Seattle so I’m not interested in moving anywhere. The only Canadian cities that appeal to me are cities like Seattle so a move wouldn’t make much sense.
If I left Seattle (and the US) it would be for something completely different like Taipei.
I’m also a bit too patriotic to move out of the US while I can still build a life here.
>Seattle in the early/mid 90s had a grittier grungier feel.
Of course, that's true of a lot of US cities that are growing these days. Certainly NYC or Boston were much grittier in the 80s/90s than they are today with a net outflow of population.
Yes. Also, I worked at the downtown McDonald’s then (3rd and pine), which was pretty run down and a hangout for homeless at night, so my impression is pretty biased. Not sure if this is still true, but back then many of the homeless were Native Americans, which is unique to the PNW (and Vancouver) grit, I guess.
Oh, ya that was a typo, oops, it would be hard to get a ferry from Bellevue into the sound via the canal :). My great aunt and uncle would visit us from anchorage (or Ketchikan? I was young) on the ferry and we saw them off at the ferry dock downtown.
I've never even been to seattle but i can at least tell you that grunge started there. Can you imagine a new genre of music starting in seattle now?
Also,
> There's an art gallery across the street from me. Many coffee shops and restaurants have locally created art for sale.
There's a ton of those in SF, too. Gentrifiers enjoy the old culture and all its signifiers; that's why they moved there in the first place. (IDK what you mean by street performers but there sure aren't those in SF.)
There’s a dude who dances on the corner by my bus stop because he likes it. No shortage of buskers either. The bar up the street does rope dancing on I think Tuesday night.
I’m not sure how to reconcile “all the artists are leaving” with “gentrifiers like art” and the presence of many forms of art all over the place. Which is it? Are artists not supposed to sell art? I really don’t get it.
Grunge didn’t really start here, it just blew up here. It’s more of a Pacific Northwest thing than a Seattle thing. If you ever come visit check out the Nirvana exhibit at MoPop (previously EMP), it does a great job explaining the evolution of grunge.
There are several local bands who are doing well on the national stage. The biggest is Macklemore although he’s not really my style.
The music scene in Seattle seems healthy to me, you can get a variety of shows any night of the week. The metal scene is supposed to be big but not my deal so I don’t know a lot about it.
I was at a backyard/underground wrestling show (hosted by a local band) last summer where the heel taunted the audience by telling them they’re a bunch of people who moved here 8 years ago and are mad at the people who moved here 5 years ago.
From where I sit Seattle has a multitude of healthy subcultures. It’s just fashionable to complain.
Funny seeing our neighborhood dancing dude mentioned on HN (assuming you’re talking about the guy that posts up across from Easy Street)! When he started showing up I was really happy to see just a little bit of life and eccentric expression being brought back out on the street.
Seattle was my hometown and still is my home. I’m probably one of the complainers many people are complaining about on this forum. That said, I have made friends with a bunch of new folks who moved from Cali within the last several years. Really great, wonderful people and I have nothing against them. Nevertheless, at this point it’s far from the city I grew up in, fell in love with, and now miss (even though I still live here)
As the cost of living rises, the culture changes.
Really just warning you, it sounds possible that it's where SF was 10-15 years ago. I personally knew multiple artists who lived in SF, tried to sell their art to techies, slowly noticed that all their friends were becoming techies (and all their artist friends were leaving), their rent continually rose, and had to move out. These places are friendly to artists right up until they aren't.
I moved out here last year - I do not live in Seattle proper, but I work there. I love Seattle but it is a crazy town that to me seems like it must've always been in flux. For the love of God do not move here if you don't want to be stressed out about housing costs and don't want to deal with an insane commute regardless of almost anywhere you live.
I'm trying to find it but there was this old video recording from either 1995 or 2005 (I don't remember which) of a Bob Dylan-ish parody song being performed on acoustic guitar and the lyrics were complaining about the exact same things back then that you hear complained about here today. As a matter of fact, don't move here if you can't handle complaining.
Seattle is a boom(and bust)town. Always has been. That's what makes it appealing to me. I'll ride out whatever happens next because I have no illusions that this crazy growth can continue. I'm willing to accept the complaining, it hasn't driven me out yet. As one of the most educated cities in the nation I expect to be able to challenge perceptions. I hear the line repeated often in local media but nobody has ever been able to explain to me what magic thing Seattle has lost. I suspect that's because it hasn't actually lost it.
I'm from a small town in Idaho. I recently went back to visit family. Everyone was eager to tell me that the direct flight from Seattle would be cancelled in favor of a town 45 minutes away. The local airport which used to serve the region is losing commercial service to the largest metro area in the region. Getting out of town will take an extra transfer and a 45minute to two hour drive.
That town has stagnated and now it is dying. It is an oversimplification but I would rather deal with the problems of growth than stagnation and decay.
That's the squeeze I'm describing. If you want a "new economy" job you must be in a city. It feels like the only people doing well are the blue collar workers in the suburbs or rural areas who are mending to the retired or retiring boomer's homes. New blood has no money or resources.
You don’t even have to go to small town Idaho, even Spokane is still economically struggling, though at least they still have plenty of Seattle directs.
Maybe Colorado should implement some of what Hunter S. Thompson had in his platform for Sheriff of Aspen:
1. Rip up all city streets with jackhammers and sod the streets at once.... All public movement would be by foot and a fleet of bicycles, maintained by the city police force.
2. Change the name 'Aspen', by public referendum, to 'Fat City'. This would prevent greedheads, land-rapers and other human jackals from capitalizing on the name 'Aspen'.... These swine should be fucked, broken, and driven across the land.
3. Drug Sales must be controlled. My first act as Sheriff will be to install, on the courthouse lawn, a bastinado platform and a set of stocks in order to punish dishonest dope dealers in a proper public fashion. Each year these dealers cheat millions of people out of millions of dollars.... it will be the general philosophy of the Sheriff’s office that no drug worth taking should be sold for money.
4. Hunting and fishing should be forbidden to all non-residents, with the exception of those who can obtain the signed endorsement of a resident- who will then be legally responsible for any violation or abuse committed by the non-resident he has ‘signed for’…. By this approach-making hundreds or even thousands of individuals personally responsible for protecting the animals, fish and birds who live here-we would create a sort of de facto game preserve, without the harsh restrictions that will necessarily be forced on us if these blood-thirsty geeks keep swarming in here each autumn to shoot everything they see.
5. The Sheriff and his Deputies should never be armed in public. Every urban riot, shoot-out and blood-bath (involving guns) in recent memory has been set off by some trigger-happy cop in a fear frenzy.
6. It will be the policy of the Sheriff’s office savagely to harass all those engaged in any form of land-rape.
I honestly think that a more modern version of "intentional communities" would really appeal to a lot of people. Cheap housing, walk able everything including grocery stores, a couple locally owned industries or two, and the support people to support them - it literally sounds like the dream to me. Suburbs are exclusion zones, and cities are so incredibly expensive and chaotic.
I'm sure there's 1000 economic and social reasons they can't be done, but damn if it doesn't sound good.
You actually just described the modern approach to suburbs! Stapleton in Denver, Mueller in Austin are some examples. These basically become high priced, close in, suburbs.
Interestingly, this sort of planned suburb seems to end up a lot like what we used to get organically.
Boston's inner suburbs are full of this sort of stuff - walkable stores, small business and light industry, 2-5 story buildings for housing. And it all feels a lot like the old quarters of many European cities.
Part of the change is building materials and cars, I suppose - what was obvious in 1850 now has to be planned to outcompete highrises and cars-first layouts. But an awful lot of it is just not outlawing what people already do if you let them; Boston's livable old suburbs are basically all illegal today.
I don't think Thompson and Ed Abbey ever met, but they'd have hit it off quite well. (Or killed each other, I suppose.)
Points 1, 2, and 4 remind me of nothing so much as Abbey's stance on protecting the national parks: avoiding regulation via personal responsibility and barriers on idle, disinteresting consumption.
As I remember, his plan for the Grand Canyon was to put the last parking lot 5+ miles from the Canyon, with a bus line and a fleet of bicycles. You bike in (or take the bus, iff you've got a health reason not to bike), see the Canyon, then take a bus back out. No Canyon-side parking, less litter, no tourists seeking 5 minutes of photos, and no hucksters selling tickets for glass bridges or anything else. And yes, I seem to remember he wanted to keep names like "Hell's Half Mile" on everything possible, the better to limit demand.
A bit exclusionary, maybe, but sort of a nice vision given what we've got instead. (As far as I know, the park that came closest is Zion, and it's definitely better for having done so.)
Denali has also mostly prohibited private cars including for people staying deep in the park. (Unlike the Zion canyon where you can still drive to the lodge.) The park service has introduced shuttle buses in a number of places. It seems to be their general trend to at least stop building additional parking to meet increases in demand.
I'm pretty sure you're being sarcastic but I think realistic option would be to implement a weighted voting system based on time spent as a resident of the area the vote is for. Want to move to our state, your vote is worth 1/10 when you arrive and gorws by +1/10 on the next calendar year eventually topping out at 1/1. Want to move towns within the state? You can keep your voting power in state elections but you're gonna restart from 1/10 for local elections.
This would put a stop to hordes of new residents from trashing places because it would give the existing residents time to react before the newcomers dominate local politics.
Experience/time considered in all sorts of contexts. The opinion of someone who's been doing something for years is more meaningful than that of someone who hasn't. Why don't we apply that to political representation. People who have been living somewhere for awhile probably have a better opinion on the future direction of that place than people who haven't.
I know folks like to point at the big techcos in the area being flush with cash as evidence this can continue a long time. And in a vacuum, wage growth in tech could continue to keep pace, perhaps. But that is 300k in appreciation a year.
How far out will school teachers, janitors, chefs, mechanics, city employees, and similar need to live before their not-quite-as-quickly-increasing salaries fail to keep up, and they leave the area en masse?
Cut the NIMBYism and you might see some improvement, but only as fast as the city can approve permits.
As Buffett likes to point out: be "fearful when others are greedy and greedy when others are fearful".
>I know folks like to point at the big techcos in the area being flush with cash as evidence this can continue a long time. And in a vacuum, wage growth in tech could continue to keep pace, perhaps. But that is 300k in appreciation a year.
It's not even about people on tech salaries at this point. Those people are being priced out of the market, too. It's an issue of foreign investment mainly from China either speculating on the market, or investing their money in the only way they can given that personal property does not exist in their country.
(Not the same person, but:) if you want to look into this, vacancy rates are probably the place to start.
In Vancouver, for instance, it's very clear. ~280,000 housing units, of which ~25,000 were recently found to be owned-but-unoccupied. Which doesn't mean international owners, but does mean housing is being used not to live in, or even to rent, but as a pure investment - with obvious consequences for the people actually living there.
A very quick look doesn't turn up this number for San Jose, but it's the most obvious way to distinguish price hikes driven by capped housing and rising salaries from those driven by outside investment.
I mean to contrast with the Vancouver experience - lots of empty units, or units empty for many months of the year. When they go to Vancouver to visit, it's just for fun. They don't need to work, and don't work. You might meet them in public spaces and make friends with them, and find it surprising that they have so much money without needing to work.
My home state is something like 48th in education spending and considers it a point of pride because it "makes educators work harder". It was normal for every student to be asked to bring a box of kleenex to school every year because there was no budget to provide that resource.
It terrifies me to see how poorly we treat educators and education in general. As a highly developed nation our only chance for the future is to maintain our edge. We are borrowing against the intellectual (and in the case of public university tuition, also the financial) capital of the future and I'm not even sure what we are doing with the money.
In California it mostly comes from the States general fund. Income tax and sales tax. Most of the local property tax also goes to the state to be sent back to the schools on a per student basis, but this is about 25% of the funding. See here [1] for a good explanation of all the crazy details of California school funding and its history.
Prop 13 limited prop tax to 1% of the assessed value (actual property tax also includes many parcel taxes). About 100 school districts out of about a thousand in California have such high property values and/or low number of students that the 1% tax is enough to fund the schools at a higher per student rate than the standard for California. These rich areas are called "basic aid" districts and don't give their prop tax to the state, keeping it local and funding schools at a higher level.
Prop 13 only has effect when houses do NOT sell. Whenever a property changes hands, which is the only event that matters wrt demand, it is assessed at current market value.
Prop 13 does have an effect but only in the manner in which it supresses sales.
It limits property tax to 1% which I believe is pretty low compared to other coastal states. Coincidentally, California's public schools have fallen down the rankings since it passed.
> Coincidentally, California's public schools have fallen down the rankings since it passed.
Last we checked, per-student spending in public schools was negatively correlated with student achievement, so the hypothesis that funding levels are unrelated to performance would appear to be on pretty strong ground.
I'm not an economist but if property tax growth is effectively capped at 2% and teachers are paid out of property tax then any time housing price grows by more than 2% teachers are at a disadvantage to buy a house.
Does the new buyer pay the tax on appreciation in all the previous years? If not teachers are getting screwed twice.
If a house is appraised at $10,000.00 in 2000 and doesn’t sell for 10 years it pays $2000.00 in taxes. Since teachers are paid out of this tax their salaries increases are capped at $2,000.00. If wages (and housing prices) in general went up at even 3% per year then teachers have to compete against other buyers with double the cash.
The only way teachers aren’t getting screwed here is if every house sells every year.
Again, I’m not an economist and these numbers are obviously a gross oversimplification.
If they’re the ones demanding housing at a rate that outstrips the supply, then they are the ones causing prices to rise: they’re just not the ones editing the listings.
Landlords do not build they own. Contractors and developers build. If you could own one building and charge $2500 or own 5 building and charge $600 each, what would you choose? You would make $500 more owning more buildings, but you would also have more overhead and work managing them all.
The dominant factor driving house prices is mortgage credit inflation, not supply and demand, both the hypothesis and the data for this are very strong.
Sure, but in normal markets both supply and demand shift to reach equilibrium. In urban housing markets, increasingly supply is approximately illegal, so what would be manageable demand for any other resource drives runaway price growth like we see here.
The argument for not blaming high-salary tech workers is that when they demand anything other than housing (nootropics or standing desks or whatever other stereotype we might choose), prices don't react anywhere near as strongly.
Increasing supply shouldn't be that hard. High rise apartment buildings can house thousands of people using a small amount of real-estate. Opposition to them is mostly political. They do make it more difficult to design your city services, but that's not an insurmountable problem either.
The Bay area should look a lot more like Manhattan, not that Manhattan is the gold standard in affordable housing...
I've said it before and I'll say it again. I wonder what the venn diagram of VCs and Landlords look like. If I was a VC, you better believe I'd have some money in real estate too.
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.
I recently sold property in the bay area. It's crazy indeed, but if I had the chance I'd sit on it for at least another 10 years. There no signs of progress to increase inventory and between Google/Apple/Facebook (and name every other large tech company) there's enough cash in their coffers to hire 300,000 more engineers making $300k/year. Which basically means even in a massive downturn, they're still going to hire net new in the 10's of thousands every year for the next 10 years.
I don't think people really fathom how big of a deal this is. When was the last time a group of heavily concentrated companies were so flushed with cash sitting in banks? And also who's most coveted asset was highly paid white collar workers? Wall Street in the 80's maybe?
>There's no signs of progress to increase inventory
SB 827? That's what's kept me from buying. The fact that housing in the Bay is political scares me off. I'll bet on economics every day, but not on politics.
SB827 passing will only begin to tickle the situation. It's a good start, but nowhere near what needs to be done. NIMBY'ism is part regulation, part culture. I don't see the culture part going away anytime soon.
Out of curiosity - is there anywhere in the US in history where housing that had the highest value in the country was affected massively (negatively) by regulation?
Wait and see what happens as a result of SALT deduction reform. Property taxes in the most expensive zip codes just became twice as expensive for many people. California may be less effected due to proposition 13 but places like Texas and New Jersey could be hit hard. I'm guessing we'll start to see the impact (whatever it is) in early 2019 when 2018 tax returns are due.
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 trend of homeowner NIMBYism.)
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 see pretty solid returns. At least you can rest easy knowing it was perhaps the safest real estate investment anyone (who can afford it) could make.
The fact that real estate is so fundamentally an investment here (in the US/in the western world) is a deep underlying part of the problem. I agree - this person made the right decision, from their point of view, and it will be a good return on investment. But I'm definitely sort of existentially disappointed in the sort of social system that makes housing an investment like this.
Me too. I would take 0% return on investment and reasonable housing costs over obscene housing prices and some return on investment in a heartbeat. For people who just want a comfortable safety net for themselves and their children and not speculation, investments should be liquid and diversified, not tied up in one illiquid asset.
Foreign investors (rich people) can purchase homes in the US (San Francisco), and have no requirement to live in them, or use them. They can be purchased as purely speculative investments and it happens ALL THE TIME.
I spoke with a real estate agent at a major SF firm, and asked them point blank - WHO can afford these insane home prices? He generated a nice little chart for me of the buyers by career. Software Engineers was number 4.
#1 - Foreign Investors (mainly Chinese)
#2 - Trust funds
#3 - I forget (this was 4 years ago)
#4 - Software Engineer
How / why it's legal for foreign investors to hold onto homes that people could be living in is beyond me. It destroys communities, and seriously hurts everyone.
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.
That $1m is for the land. The tear down condition home can be upgraded ad-infintum. Look at the tiny London flats right now where they are building multiple stories down into the ground.
I do not agree. You assume that things don’t change. The past 100 years doesn’t matter at all because the past 80 years are starkly different than the last 20 years. It’s not only the local housing bubble that one needs to be concerned about, it’s the stock market, specifically tech, bubble in general that should give rise to concern. While your city is culturally diverse, it is economically homogeneous. Sure, a stock market correction or downturn hurts the whole country, it specifically impacts those who overpaid for assets. If you can’t pay the mortgage for the next couple years, does it really matter that it will undoubtedly bounce back in 5-10 years? Never buy an assessment that is overpriced. Housing in the Bay Area is obviously and unarguably overpriced because supply is artificially suppressed.
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 < Demand.
Offer isn't looking to catch up any time soon [1], and demand crashing would mean the tech economy will have crashed as well (or, you know, The Big One).
[1] I'll have to sleuth up the link from 6mo-1y ago about how maximizing consctruction at this point would only keep up with demand, effectively only preventing a further increase.
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.
I lived in Vegas at the time. I saw it for the obvious problem that it was. I told everyone in the area that the bust was going to happen, but everyone was blinded by the money they were making. The shock people had was both amusing and disturbing at the same time.
Funny somewhat related story; just as the downslide started in that market we made an offer on a house 50k below asking. The owner, an investor, laughed at us. After the bust, we had already moved away at that point, we saw the house finally sold for something like 100k to 150k less than our low-ball offer.
Another somewhat related funny story; went to an open house and told the realtor I was worried over falling house values before deciding to buy. We were told house values don't fall. Didn't bother to point out to her that the for sale sign out front had a "reduced" sticker on it.
I hear the same sentiment from realtors these days. Everyone drank the bay area real estate doesnt ever drop koolaid, in the long run, it might be true, in the short run, they probably have no clue, just busy selling their business.
I hear "low inventory, high demand" all the time, and while it is true, the part that most people ignore is, it is still possible that older buyers still have a ton of profit, while recent buyers can be under water
People absolutely saw it coming. I remember Geithner making comments to the effect of "we aren't ready yet!" when the bubble finally broke. The Fed was already making plans to shore up the affected banks, but hadn't yet built up the funds to do so effectively.
But then it depends on which timescale we're talking about.
Basically, everybody wanted to ride the gravy train and nobody wanted to be the killjoy that pulled the brakes before it flew off of the cliff. There was a lot of money to be made and nobody thought they would be the ones left holding the bag.
The movie The Big Short explained this pretty well.
In December 2007 in Australia I saw a presentation on the coming collapse of the US subprime housing market - in a lunchtime seminar given by a (tech) colleague for interests sake.
Not necessarily. I am afraid that such sentiment would be priced in as well. If people are so certain about the market, the price would be led by the expectation rather than the fundamental.
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).
People have been saying this every single day since I moved to San Francisco in 2009. I guess if you keep predicting it eventually, you might end up being right, but its not exactly insightful.
Markets can stay irrational for a long period of time and then correct pretty quickly. I’d be surprised if prices aren’t near a plateau. A lot of tech companies are shifting hiring to other states. I don’t see the Bay Area growing forever and rent/home prices won’t go up exponentially forever.
I know many of my neighbors in the bay area bought long time ago (20 years) for maybe 1/5 of the current value. It would have to drop quite a bit to put them in the red. And they are getting the same high salary as any other techie. Of course the tech industry can eventually totally collapse but then why would people want to move in?
Why do you think that, though? Is it solely because prices are rising very quickly? There's no indication whatsoever that people will stop buying any time soon. Homes are selling >110% of asking price for all cash within days, and supply is essentially fixed.
>People were saying the exact same thing before the crash in 2007.
People were buying overvalued homes they couldn't afford in the middle of nowhere on subprime adjustable mortgages, which caused the crash of '07 when the ARM rates kicked in and they couldn't afford payments. This is a fundamentally different situation.
Now, a very small number of elite highly wealthy people from around the world are treating American housing stock as their investment vehicles since there is literally no other better option in 2018. Where we go from here in terms of affordable housing, nobody knows. But I really really doubt we're going to see a housing crash any time soon. It's just simple supply and demand.
Do you have a source for foreigners "treating American housing stock as their investment vehicles" and that driving up prices?
That was the complaint in Vancouver until they actually started tracking foreigner purchases and it turned out it was 10-15% of purchases (higher in certain neighborhoods). That means the other 85-90% of demand was from Canadians.
In the period after the downturn and just before the market started to tick up in mid 2012, there were a number of Asian investors buying up large swaths of foreclosed and distressed homes in Oakland for cash.
I recall this specifically, as I was in the market for a house at the time. Fortunately, I didn't face much cash competition as I was shopping slightly upmarket. The line seemed to be $300-400k. Those folks would be seeing pretty good returns at this point as those houses are now typically worth $500-600k and might be renting for $2-3k.
I believe the pricing growth is fueled by tech wage growth which is unsustainable.
I also think the tech sector in general (especially any company that is driven by ads) is due for a major correction soon, if not a full burst.
I can’t tell you exactly why I feel it, it’s more an emotional thing, but I don’t see a better strategy than that when trying to predict long-term housing prices.
I believe tech salaries will decline starting in about 5 years, and accelerating in 10 years.
Why?
HUGE influx of people into the field, fueled by government programs, people in tech pushing for more people to join (why they would ever do this is beyond me, say goodbye to your salary), education in high school and younger, wide availability to learn online, outsourcing, etc... The influx of workers will simply outstrip demand once worker influx hits it's powerband in 5-10 years.
Programming is on the same path that many craft careers have been on in years past. Mark my words - it's a blue collar job in the making.
If you aren't specializing in some niche field of programming right now, you will be kicking yourself in 10 years.
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 short sighted and sad as I love mentoring junior engineers.
Thinking logically and being able to clearly articulate your thought process is a rarer skill than you would think.
I do a lot of teaching/consulting in the Bay Area. I see a lot of people coming out of bootcamps trying to get entry level positions.
Some of the candidates graduating from these bootcamps are awesome and have lots of potential but those are few and far between. Also, their is a shortage of entry level positions.
The best bootcamps filter heavily and generally only take people with a vaguely related college degree (Economics, law, physics, biology) or who have shown an aptitude (portfolio).
I’m summary, I wouldn’t be surprised if the growth in tech jobs outstrips the supply of quality candidates. If anything having years of relevant experience is going to become even more valuable as time progresses. It’s the entry level candidates that are going to have a harder time landing a job and paying rent in the Bay.
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 without being caught. I knew a few friends who would never have been able to pass the math and engineering courses a decent CS program requires, but they were admitted and essentially paid a huge bribe (with loans) to get a law degree from a low-tier school, cram for months for the bar, and get certified.
But they never made much money in law, and probably would have been better off choosing another path.
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.
https://blog.codinghorror.com/why-cant-programmers-program/ Considering articles like this and the fact FizzBuzz tests are even a thing I wouldn't be so sure. I get your point, but the problem is while with enough time one can get it, quite a few people are going to hit a wall and not be able to pass it.
I felt this way 20 years ago before the dot net bubble popped. But I greatly miss judged the size of the demand. I am not sure the ten year outlook is that bad.
I mostly agree and would argue it's due to the slow erosion of the middle / consumer class. Advertising-based businesses slowing down might be a leading indicator of a bigger macro trend: the reversion back to pre-WW2 levels of inequality :-/
Ad money ultimately flows from consumer (mostly) discretionary demand. If we were to see a significant pullback in consumer discretionary spending, you’d see a lagging pullback in ad spending.
Per month. I generally charge my tenants (outside the Area) pretty close to 1% per month, for reference. If I can't get 0.9% per month or more, the property isn't worth the effort at renting it out.
I suppose it depends. Is the average property value increasing faster than the salaries of the people that fuel it? Sometimes folks will pack into a house, pumping up the total salary of the house over time, so you'd also have to consider cohabitation trends.
If property values goes up faster than salary per home, you'll end up with a precarious housing market subject to the whims of investor sentiment. Workers won't be able to move in and back up the house valuation if they are priced too high.
It's pretty straightforward to look at prices throughout the course of the real-bubble and speculate about that fact.
A few places along the peninsula had stagnant or slowly rising property values, like Palo Alto. Values in SF either held or declined very little. Places like Oakland lost a little value and Hayward, maybe one of the least desirable areas around the bay regained all of its lost value in just a few years.
Yup, in general investing an equivalent money in stocks is better than leveraging your income to buy an illiquid, non-diversified asset like a single-family home.
From Jan 1987 to Jan 2018, prices in San Francisco MSA have gone up 5.0% a year, ((258.81-46.95)/46.95)^(1/(2018-1987)). The equivalent amount invested in the stocks over that time period would have yielded 10.3% a year[1], with dividends reinvested.
Unless you are planning to use it as an investment property and reinvest rents (net of property tax, maintenance) in other properties, it still doesn't appear clear that buying a home vs renting and investing heavily in the market is a better bet, not to mention other intangibles like upkeep and longer commutes.
You can pretty much forget about tax benefits, thanks to the 2017 federal tax plan that limits deductability of state and local taxes and reduces the cap on mortgage interest deductability. You may still get a deduction, but it's not going to be that much higher than the standard deduction.
For landlords, those new limits do not apply; they remain deductible, just like other qualified business expenses (which makes sense IMO, which is why I support the mortgage interest deduction, to keep owner occupants on relatively equal footing with landlords when contemplating purchasing property).
>The real q is, why does government even subsidizing home ownership in the first place?
Firstly, older people own homes and they vote. Secondly, homes are a significant part of people's retirement assets. As companies do away with pensions and as the Social Security age gets increased, home values gain in importance. So the government has an incentive to keep home prices high.
This hurts the younger generation looking to buy homes and raise a family. But the older generation votes in greater numbers than the younger people.
If you are politician running for office, you aren't going to say "lets raise property taxes" or "lets get housing prices down so that young people can afford it".
US business taxes are based income / profits. In order to do that, it's required to allow profit-seeking entities to deduct business expenses (such as raw materials, wages, etc.).
Logically, interest and property taxes are business expenses for landlords, just as steel and electricity are business expenses for Ford.
Then, there's a question of whether you want to have a level purchasing environment for prospective owner-occupants when they are bidding against a prospective landlord. (I believe that we do want to encourage owner-occupancy, at least to the extent that they are on equal footing with landlords.) Repealing the OO-MID (owner-occupied mortgage interest deduction) would mean that a landlord could literally pay more for a property than an owner-occupant and achieve the same long-run financial outcome, or pay the same and achieve a better outcome. This would amount to a subsidy to renters over owners. Providing a similar (now lessened) subsidy to owners serves to level, not tilt the playing field.
If one believes that a nation of entirely renters is preferable or indifferent as compared to a mix of landlords and end users, then there is no valid purpose for the OO-MID.
I believe there are community and public benefits to owner-occupancy and support the level playing field.
That’s a fair question. I don’t support that exclusion, even though I stand to benefit the full amount if we were to sell today. (Obviously, if we sell, we’re taking the exemption, but I agree it’s bad policy.)
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.
> I'm guessing, if offered the same salaries, Google could find plenty of willing takers to move.
There ought to be companies with data on this - some places allow fully-remote work without adjusting salaries for CoL. So I wonder: how many of their employees still end up living in high-cost cities?
Does anyone know of public data that could sort this out?
Why sell when your home value is increasing by $292,000 a year and property taxes are not going up? This seems like a very strong HODL time for real estate as an investment. The fundamentals are sound, there are tons of people looking for a roof over their head so they can continue working their dream job and supply constraints that prevent the production of new homes to accommodate them.
Please contact your Senator and Assemblymember and ask them to vote yes on SB 827 and 828, which would make it much easier to build housing in transit rich areas that have previously resisted it - Atherton, West Portal, Palo Alto, Forest Hill, all of Marin County come to mind.
And they're ugly townhouses too, the type that have been slapped up quickly, McMansion style. The Spanish roof tile thing will never die, even when it's applied to a townhouse.
It really doesn’t feel like a correction right now at least in the tech sector:
- The job market is unbelievably hot.
- I don’t see why any of the big tech companies will turn in outrageously bad numbers this quarter.
- Everyone I talk to is hiring.
- A bunch of people at startups that went public or are about to go public will unlock a lot of stock really soon.
Yet I still feel a bit nervous. I’ve been in the Bay Area since 2008 and I remember how fast the place cleared out after the last big crash. I could see some stocks taking a hit in the short term however I just don’t see what’s on the horizon that’s going to do in tech in particular.
My view is that many companies in the US are over-funded because the fed stimulated the economy too much. Investors flocked to the stock market in 08, when there was no money to be made in bonds, and then the stock market got whipped up by more people joining the trend. Then it happened again when Trump got elected and investors thought republicans would be easy on businesses.
All that funding is being burnt by companies to grow and compete with each other, which is why you see an overheated job market. They also inflate the value of GAFA, because these companies spend a lot in software, hardware, cloud services and ads.
When interest rates go up and bond yields get better though, it's likely that investors will no longer fund companies as much as they used to (which is why I think we're starting to see a slowdown in stock prices). This slowdown in funding will cause companies to have some painful debt crunch, and start the bursting of the bubble...
> I don’t see why any of the big tech companies will turn in outrageously bad numbers this quarter.
Really? You don’t see why FB may post a decline in users, after all the pushback they’re getting? Why Twitter might enter a spiral soon? These just seem impossible to you?
The rest of your comment seems like what people could easily have said in September of 1929. Not saying a crash like that is coming, but it literally means nothing that things are doing well today, it’s about whether the trajectory we’re on is sustainable in the long-term.
“Really? You don’t see why FB may post a decline in users, after all the pushback they’re getting? Why Twitter might enter a spiral soon? These just seem impossible to you?”
Not really sadly. I’ve been monitoring the App Store rankings through out all of the recent scandals. The only time the top 10 changed recently was due to March madness and that golf tournament thing. The main apps in the top 5 have remained social right through out.
Even in the social category, I didn’t see signal or any privacy related apps make it into the top
50.
I also bet that large portions of the public don’t even know Facebook own Instagram and it’s growing like crazy. Same with WhatsApp.
I can also see a scenario where any regulation that does occur, short of breaking up Facebook or google, benefits the incumbents. I don’t think they are gonna be broken up in the USA anyway due to the way anti trust law is written.
As someone who worked outside CA and ended up working for a company based in San Jose I was all pumped to visit the corporate HQ for the first time, silicon valley here I come. The offices were very nice, saw lots of signs for super cool companies that I knew. It was great .... except it was all just a lot of office park... and nothing else.
I'd take the train up to SF on weekends for things to do. Otherwise I was more entertained back home around Minneapolis than most places outside SF.
>Home price appreciation serving ‘as a kind of second job’
I had this thought the other day, actually, when tallying my net worth for the quarter. My home went up by ~$100k in value since December (hot neighborhood near Apple) and my family earned about the same amount in income. Long term, we plan on cashing out and moving to the East Coast so it's not just idle numbers tabulating.
Autonomous RVs are going to pop this bubble. You're going to see a lot of people dropping static homes for RV's, or even a couple of them.
You'll see a new generation of people who have never had a static home, but always been at home wherever they are, and they'll never be more than a few steps from their own bed.
I wonder what affect San Jose being a sanctuary city has on these increases.
It would seem me that a policy that encourages illegal immigrants to live in your city is neccisarily going to increase the supply of home dwellers, putting more demand on housing.
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 ridden the wave to prosperity. Most moved to Seattle (if looking for a career/home/etc), or Portland (if they pass the weird-test). There's been a steady trickle out of the Bay for anyone not in tech for the past decade, and now I think only 10% of them still remain. Now they're going to Colorado rather than Seattle, and a few more to Portland. Those that are currently missing the wave in Seattle are looking at moving to Colorado.
I have no idea which area is gonna be next - Colorado is now seen as the last "cool" place thats "affordable" and liberal (sorry screaming Coloradan's, you're next).
Personally, I just can't believe its gone on this long - the pressure release valve that I thought would be released from the bay every year for the last decade hasn't fully let go. Career or being able to afford a house seem to be mutually exclusive ideas if you're not in programming. This is creating a rather nomadic culture within my friend groups... welp, this area is too expensive, might as well move onto the next. Very few are putting down roots.
I wonder what this all will look like when we look back 20 years hence - was it really a bubble, or the creation of a permanent Elysium style class divide between those that had the capital (or took the risks) early, and those who didn't start out as well (or were conservative in leveraging themselves)? Every day it feels like I'm leading more towards the latter.