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Comment by refurb | Hacker News Reader

A friend used to rent out a spare room in SF on a regular basis. Two years ago, he could get $1850 for a single room with it's own bath room, furnished. We're talking 6-10 replies from a Craiglist post within 24 hours. Stopped renting it out about a year ago.

He just posted it again. Zero takers at $1850. Finally got someone for $1600 (-13% decrease in rent) after a month. A dramatic change.

The rental market in SF is definitely turning towards the buyer.

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Yet $1600 is still absurdly high for such a simple living space.

At least it's approaching Manhattan prices.

Let's hope it starts approaching Newport prices soon :-)

It is. Keep in mind this was more shorter term (3-4 months) rental of a fully furnished room.

If it was a long-term lease of just an empty room it would be closer to $1300.

that's cheap if it's a decent place in a nice neighborhood. i was doing 1500 (utilities included) on nob hill with 3 other roommates and 1 bathroom a year ago. and that was the cheapest i could find in a decent location, and that's including many of my emails that went unanswered.

For historical perspective - when I first moved out to the Bay Area in 2009, I paid $900/month for a master bedroom + private bath in a 3BR townhome, in Mountain View. My roommates paid $650/month.

If you've never been through a downturn in the Bay Area, you'll be amazed at how low prices can go (and also at how many people can become unemployed and move back to where they came from).

I've read Yelp reviews on a previous 2/2 in San Mateo. $2600 at that point, one review had a price listed a few years back (~2011), ended up being near 20% increase year over year.

Also heard of the U-Haul stories of where there was none left in the bay because everyone moved out. Don't think that's going to happen this time around. Think that start ups, or at least their employees will be acquired into bigger/more stable companies. Did that happen last time around? For example, did Yahoo, AOL, PayPal go on a buying spree?

20% YoY increases is about right in boom times. My rent increased by about $300/month/year from 2011-2014, then has been roughly stable since then. It was stable from 2009-2011 though.

In 2009, most of the startups were really small Web 2.0 outfits with 2-6 employees. However, the big companies were laying off people, and very few companies were hiring. I was initially going to apply to E-Bay/PayPal (I had a contact there), but the day that I was going to apply they announced they were laying off 5000 people, and I was like "Welp, that's not happening." My roommate worked at EMC and went through 3 rounds of layoffs, with about 3/4 of her department laid off. Was very lucky to end up at Google, which according to the news media was in hiring freeze (like everyone else) at the time; I had an awkward conversation with my recruiter where I was like "Are you actually hiring right now, or am I wasting my time?" What tended to happen was that the big companies cherry-picked the startup founders/employees that they really wanted and laid off all their low performers, and everyone who didn't have a track record of producing stuff was basically fucked.

I wasn't around for the dot-com bust in 2001 or the 1991 recession, but my understanding is that they were far worse in Silicon Valley, because the dot-coms had hired a large number of underskilled workers who literally had nobody willing to hire them when their employers went bust. I suspect 2017 will be worse than 2009 but better than 2001 in tech; unicorns collectively employ many more people (particularly low-skilled people) than Web 2.0 startups, but the crash this time is a slow-motion slowdown and doesn't seem to be affecting all companies, and so there's time for stronger companies to pick up the pieces of weaker ones.

2009 and (allegedly) 2017 are nothing like 2001. Within one week, my office building (in Seattle) went from being completely full of startups to 50% occupancy. I distinctly remember one day walking around and seeing multiple people in their offices crying with their heads in their hands. The whole market basically disappeared overnight. I had only been working for a year at that point, so I was completely screwed. It was 3 years before I could get an entry level job in the industry again (at 2/3 of my previous salary). Anyway, what's this about a crash? I've been job hunting and every company I've interviewed with says they are having difficulty finding people.

Yep: first, rents crash in the East Bay and other outlying areas, and then as traffic diminishes people who were paying $$$ to rent in PA/MA/MV decide that it wouldn't be so bad to live farther out. Rents then drop everywhere, although home sale prices never really drop much in PA/MA—they just level off for a while.

Condo prices can drop - in 2009 there were 2BR condos available for about $400K, while the cheapest you could get in early 2015 were about $900K. You're right though, I didn't see single-family homes drop much even in 2009; they still went for more than a million.

This was in the Glen Park/Noe Valley area, so a desirable neighborhood for some.

And yes, $1300 would be cheap. Go back and year and it would have likely been ~$1600.

That's about the cost of a studio in DC.

For further comparison I pay hundreds less for an upscale (but not top of the line) 2 bedroom apartment in a Minneapolis suburb.

And I pay a $800 a month mortgage for a 3500 square fort castle with 5 beds and 4 baths on 1/2 acre in BF Indiana. Doesn't mean I am getting a good deal though, just where I happen to be.

I would way rather be paying more for a city home :)

But how many tech jobs are located within a reasonable commute of your home?

Since I do remote work, I would say somewhere within 5 to 10% of US jobs.

So the exact metro I live in has about 250-300k people. So there are tech jobs.. maybe 100-200.

But yah, not great. So I work remote.

What job did you get there? Or did you move there because of love/marriage?

I work remote for a startup out of San Jose ;) SV job, BFI house.

Very nice. What about the dating pool? Small? What education/degrees were required for your remote job?

Married but I would not want to date in my town. Hah.

I have a MS in CS, but I am sure a BS would suffice.

Thanks for the info. Congrats on the good life.

I'm in the opposite situation. I moved to Washington from a small Rust Belt city. The last house I toured there was a historic 5500 ft^2 Victorian 6 bd 5 bath, in the most desirable location, and thus with near instant liquidity. It was listed for $500k. With a local bank, which knows the housing market in the area, the mortgage would have been less than $2000/mo.

Considering the inexpensive housing, an excellent Jesuit preparatory school for $7k/year, the low cost of living, and the huge scholarships to the city's University, a family of five could live extremely comfortably for $150,000-$200,000/yr. Couples with occupations such as lawyer, doctor, engineer, or small business owner live like they're downright rich.

I suppose it's the old adage that keeps me in DC: You could sell your house here and live like a king anywhere else. But you never will, because you're afraid you'll never be to get back.

Well I left Chicago, and am planning my return. I won't return to my same condo, but I will still return!!

Living like a king in the sticks is overrated IMO.

Odd. 4 years ago I paid almost $2400 for a 700sqft studio in DC. Have things changed? (Haven't lived in DC since).

I had a 2 bedroom lease in Adams Morgan, one block off 18th, for $2500 last year. We've since bought a place a few blocks away, so I'm unsure if it's risen.

How expensive was it to buy vs. to have continued the lease?

Well, it's much better to buy. But only if you have the capital. At the time listings were only on the market for one to two days.

Really depends on the neighborhood.

on short notice and short term, you're competing with hotels which are astronomical on monthly terms, or impossible to find (because they could simply rent out nightly).

I think it's more about the location than the space.

>The rental market in SF is definitely turning towards the buyer.

Am I misunderstanding something? If rents are going down (like you suggest in your story) wouldn't that mean that the rental market in SF is turning toward the renter?

Edit: Thanks for the clarification. Terminology can be confusing since there can be buyers/sellers for the renting homes market and buyers/sellers for the buying homes market.

He's classifying the landlord and renter in this transaction as seller and buyer (of the lease), respectively.

No, it would be turning toward (as in, in favour of) the buyer.

If it was turning toward the seller it would be fast to rent at a higher price (best situation for seller), yet he is describing the opposite, where buyers have plenty of time, choice, and more purchasing power.

A "buyer's market" is good for people who haven't bought yet but want to.

A "seller's market" is good for existing owners who want to sell.

In real estate, you are correct. A buyer's market in real estate means a good time to buy a house. A seller's market is a good time to sell a house. A renter's market is a good time to rent. I've heard different terms for landlords, usually an investor's market or a landlord's market when rents are high.

Saying the market is turning to the buyer in real estate, implies it's a good time to buy a house, and renting is comparatively expensive to a mortgage.

$1600 is more than you need to survive in most countries on this planet. If you can earn that with 1 single room apartment I can't see how you can start to be pessimistic. If your friend earns more than 300$/month on that apartment I think it's quite a good market and your friend is still making a premium. And $1600 sounds like "a little" more than $300.

So the market is being depleted of high-income people seeking rentals.

Across the bay, a month or two ago, a coworker saw an apartment in Uptown that astounded me. 4 bedrooms for $8500/mo. That's only $2125/mo per person, but you have to live with at least 3 other people to get that. Crazy.

I don't have much to offer except this:

> The rental market in SF is definitely turning towards the buyer.

About fuckin' time.

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