Cities Where Job Growth Is Outpacing New Homes
citylab.com
citylab.com
Sellers indeed noticed that the prices exceeded what most can pay, even in Greater Warsaw.
At the larger estimate, that's about as big as Oxford or Slough, smaller than Swindon. At the smaller, High Wycombe or Grimsby [3], none of which would appear on a list of Big British Cities.
It's about 38 in the list of EU Larger Urban Zones [4]. Seven German cities appear higher in that list.
[1] https://en.wikipedia.org/wiki/Larger_urban_zone [2] https://en.wikipedia.org/wiki/Krak%C3%B3w [3] https://en.wikipedia.org/wiki/List_of_urban_areas_in_the_Uni... [4] https://en.wikipedia.org/wiki/Larger_urban_zone
Wikipedia says even the Oxford metro area is only 244,000 people vs about 700k people for Krakow city alone.
The Poles here are extremely aggressive when it comes to work. They will gladly work 7 days a week, 12 hour days, if they get the chance. And many will share apartments with 3-5 other guys, to minimize living costs.
Meanwhile young Scandinavians flood Polish coastal cities for binges with cheap and freely available alcohol, and staying at airbnb at prices ridiculous for Polish salaries.
We build your stuff, you cover our streets with vomit. Yet you still feel superior.
$$$.
I'm Romanian so I'm kind of in the same boat regarding your situation. Might makes right. Make more money and prove them wrong.
Well, money's just a summary: get a better education, better living conditions, etc. Money well spent earns you respect.
https://news.ycombinator.com/newsguidelines.html
Edit: it looks like you've been crossing into this repeatedly in HN comments. We ban accounts that do that. I don't want to ban you, so please stop doing that.
> number of unskilled migration coming from countries like Syria and Afghanistan to Berlin
These people cluser in the city districts ruled by Middle Eastern organized crime (if you ask Germans, no such phenomenon exists). There, market forces don't apply and housing market is hermetic to the outsiders - and it doesn't matter because you wouldn't want to live there.
Then cancel you rental contract, rent something new again and now... if not homeless (or stuck with airbnb)... re-estimate what the decent salary would be.
Mr. Big Shot
The main problem is that most high level - high skilled jobs are now in 2-3 of the biggest cities in Italy, and now everyone is trying to move there and so even more companies try to move their HQs there, and so on. I think a similar problem is happening also in others EU states.
Rent control + increasing wealth of the economy is crowding areas and limiting to bid for new renting spaces.
The only city I am aware of with rent control in Europe is Stockholm. Apparently finding a flat there is a nightmare. Where I live there is no rent control and its still a nightmare trying to find somewhere central to rent for a decent price.
You can get a firsthand contract for spatious 2 room apartment in Märsta for 14k a month right now.
At the end of our last 5 year contract the rent went up by around 45%. Bought a small place further out instead.
I'm in a US Rust Belt city that's lost population since the 1950s, and had flat growth in the region since 1970.
Yet in many neighborhoods housing prices have doubled to quintupled over the past 15 years.
Similar stories in a lot of other rust belt areas which I know are not booming. The urban areas are definitely more attractive than they used to be, but it doesn't add up. It makes me think the drive behind this is post-financial crisis monetary policy.
(Still at a very high absolute level.)
- Decades long centralizing policies, which have effectively removed gov / state jobs from more rural areas and districts, and centralized them to a select few larger towns. Lots of smaller towns and areas are dying, while everyone's emigrating to the same cities.
- Explosion on college education. Our local University has a 10%-15% growth rate, every year. Students in turn need to live somewhere, and there aren't being built nearly enough student housing / dorms.
- More tourism; We've had a boom in tourism, especially among Asian tourists. This has lead to expansions of hotels, and more people renting out their apartments etc. to airbnb
- Other economic growth in private industries, which means more workers
- Construction workers that need places to stay - we have thousands of construction workers coming here every year, none of them which own - or plan to own - housing themselves.
When I moved here, rent was around $400 for a small studio apartment. 10 years later, the same studio apartment is rented out for $1200...it's grotesque.
The lucky people are either those who's owned units since the 80s, or those that bought right after the last recession. I know so many people that have made hundreds of thousands, just because they bought at the right time - no renovations needed.
Edit: Just to give an example; In the city where I now live, a decent house will cost you around $600k-$700k. A "starter" apartment will cost you minimum $180k-$200k.
If you drive 1 hour away, the prices will be cut in half. If you move 1-2 hr flight time away, you'll probably pay 20% of those prices. And we have 15% down-payment here in Norway! Lots of young people will spend a solid 3-5 years just saving up for the down-payment.
One "life-hack" among fresh grads is to simply move somewhere rural if you can get a relevant job, save aggressively for a couple of years, and then move back to the city.
If the move is (as it seems to be) towards large multi-unit housing complexes, shouldn't we be looking at residential units created?
Sounds like kind of a disconnect between the business community and the government as well as the geographic realities of a city crowded onto a little peninsula, albeit of course with many suburban towns nearby but very heavily developed already.
I couldn't imagine being lured to the bay area for a job even for double my current salary (standard software engineer very low 6 figs). I have maybe $210K of equity in my current home; how much of a house is that going to get me there? I'd never afford a million dollar mortgage. Would have to be full time remote.
Well if HN is to be believed, $350K of total compensation isn’t out of the ordinary for FAANG, so that would get you in a million dollar house.
Never seems to occur to anyone that crazy high salaries might be driving crazy high housing prices, not the other way around, though...
It's the only logical conclusion. Married couples, each making well over $100k, competing with each other will obviously result in higher home prices, unless you increase the supply of the homes that those married couples desire. If you look at a map of recent home sale prices on Redfin or the real estate websites, you can easily see where all the doctors/programmers/business owners live in a town.
Really it is demand/supply with a ceiling limited by ability to pay and ability to add new stock that rougly determines the limit.
If the current supply is one remaing for sale house for $5 million when with a per house and land cost of at most $350k but anyone willing to wait could get new land and build it in a year for $500k there won't be any takers unless that are in a major hurry.
That something can take many forms from access to customers, the "prestige" of an area being an effective requisite where those who don't pay the expense are judged as second tier regardless if it is true or not, or simply that the location is a literal prerequisite like minerals in the area for an extractive industry. Let any relevant to the instance specific quality or quantity over others be termed "edge" as it is about relative difference mostly.
For a concrete example it would be Lewis Carrollian madness to set up a gold mine the next town over without any precious metals because the no matter how much the land and wages are cheaper for the mine towns have the infinite edge for gold mining over one with literally none.
Establishing a mine in the third world with lesser deposits to get half of the gold per mine for a tenth of the wage and real estate costs would still win in spite of the weaker gold veins.
In thie case locally biggest threat to wages and housing price value other than literal anhilation would be the loss of an edge to justify it. The edge in this case is fuzzier, partially the prestige and partially the talent of "performers" measured in outcomes. Those are also in somewhat circular feedback loops. The prestige attracts the performers and the success of the performers maintains the prestiege. A slip in performance will cause eventual collapse of prestige if they fail to justify their expense. Damage to prestige may limit income of new talent or lead to an exodus.
How about, population rose but land area stayed the same. All the land got developed (it used to be orchards, remember?) so the only way to get more land for housing was, to pay more for existing plots. So the prices go up.
No need to imagine a class of evil plotters, trying to make everyone sad.
The growth in jobs is not necessarily in the skilled ones. And those are definitely not the jobs poorer people who cannot afford to rent or own do.
And there is very strong opposition to going fully remote. When you have to be in office even once a week or every two weeks, you need a temporary place still...
It isn't only prop 13 that is to blame for the bay areas particular housing crisis, but encouraging towns to not approve residential starts cannot help.
This isn't true. Prop 13 applies to commercial property also. There is a growing movement to repeal that aspect of it in 2020.
Is it such a big concern even for so highly paid people?
Yes.
I get paid handsomely for my country and the actual experience I have. However, despite that, it's impossible for me to buy a house within 45 minutes travelling of my workplace, so I'm forced to spend about half my net incoming on rent.
I now pay more for a room in a five person shared house then i paid for a 3 bed house to myself. The only difference is being located closer to London for the better career advancement/salary.
Unfortunately, in the Bay Area my options for purchasing a detached single-family house are limited. At my current salary, if I want to purchase a detached single-family home, I'd either need to buy it in exurbia (e.g., places like Tracy to the east or Hollister to the south) or in East Oakland, which is still struggling with crime. Both places are a long commute from my Silicon Valley office. If I want to purchase a place within an hour from my job such as the southern part of San Jose, I'd need a considerable salary boost. Places like Cupertino and Sunnyvale seem impossibly expensive to me.
I've been thinking a lot about where I'd like to settle down. Silicon Valley has a wealth of specialized research scientist and research engineer positions, but I don't see myself ever being able to afford a house within an hour from Silicon Valley unless I join an early-stage startup that happens to be a wild success. On the flip side, there are plenty of places across the country, even within California, where homes are affordable with a low six-figure salary, but the problem is the types of jobs that I want tend to be restricted to tech hubs, which tend to have very high housing costs.
That’s not to say that 2br+ apartments are unprofitable to build, just less so.
but otherwise. little to no interest.
(Pity the poor teacher, nurse, etc. who's just SOL)
I mean, if there's 5 properties for rent instead of sale in the example I gave you still have the same core problem.
If 100 people need homes and you only have 50, then the people with the most money they can/want to spend on housing will get it.
It's attenuated by the willingness of people to have roommates, move in with family (if around) etc. so there can be more latent demand than is immediately present. Even if you have no homeless but a whole city is 4 rich tech workers per 3 bed apartment, there's still plenty of demand.
It's the exact reason why many tech people are clamoring for remote work and going for "vacations" to Asian holiday countries (Thailand is a big one) where they stay most of the year. It's literally cheaper to live in a tropical paradise than in a reasonable apartment in London.
I've also seen a trend where companies start their offices in smaller cities next to capitals and their employees don't commute TO work, they commute from their homes to bigger cities on weekends. It's still decidedly far from ideal but it beats spending 1.5 hours on a commute every single day.
Healthcare is the second biggest.
Food, clothing, and other sundries are a joke by comparison.