San Francisco House Prices Drop Back to 2019 as Tech Jobs Evaporate | Hacker News Reader

San Francisco House Prices Drop Back to 2019 as Tech Jobs Evaporate

wolfstreet.com

50 pointsjarsin39 comments

SF real estate transfer tax for 2024 is $177 million, 5% less than 2023. Astonishingly, the city had projected revenue of $222 million. That means there is another $45 million revenue gap.

SF is now expecting an $876 million deficit in 2025, which may exceed $1 billion if requested federal disaster funds aren't fulfilled. And expenses are expected to increase by $1.7 billion for a budget that is currently $16 billion.

Oakland is broke too.

https://finance.yahoo.com/news/san-francisco-expects-876-mil...

https://www.bizjournals.com/sanfrancisco/news/2024/12/09/tra...

https://www.sfchronicle.com/sf/article/daniel-lurie-stares-d...

https://sfethics.org/commission/budget

As "tech jobs evaporate" or as commercial real estate values in a city plummet.

There. Fixed it. Ai chicken thigh. No real programmers will be replaced. The dumb bubble of poo will implode, which brings its own issues...

+1 for "dumb bubble of poo"

"as tech jobs evaporate"

sooooo... you want us to be in the office but even if we're there it's not good enough. So now we're forced away, and since there won't be remote jobs either... :shrug:

I think this is going to be a lot worse than 2000 bust. Especially with AI coming into the picture. There is a feeling that AI will be writing ALL the code soon.

Is there something to look forward to in this specific market or at this point should I just look at carpentry jobs?

Idiots writing tons of code with AI will create employment for armies of people who actually know how to debug it into working.

Remember Knuth's witticism about debugging being twice as hard as writing? So if you're as clever as you can be when writing a program then you might not be smart enough to debug it?

Now suppose you're as clever as you can be, plus armed with AI ...

I would actually bet that AI will prove to be particularly good at classical debugging - i.e. the effort of changing the code to make a given failing test pass while keeping all the other tests green too. This is pretty much what SWE-Bench is judging, and the progress there has been phenomenal.

We will still probably need humans to do validation (vs. verification), but I don't think it'll take "armies of people".

Classical debugging is looking at a dump of memory in search for the bit that is flipped wrong. :)

never had to do that in 25 years of software dev

24 years would only put you back to 1999, and by that time GUIs had largely taken over, with Win 95 having been released and the pentium was just hitting its stride. There's still a need to pour over memory dumps if you're doing reverse engineering or early stage hardware engineering. What killed it really though was the Internet and the cloud. The expertise to debug a system and get to know it intimately well just isn't as necessary these days. just fire up an ASG and cycle the instances before the problem happens. Software that's running on your servers instead of on customer computers means you can debug those systems and don't have to rely on customer reports.

never had to analyse a memory dump. I tried to, sometimes, just for fun, but nothing good came of it. Crash dumps are symbolicated, so you never go at the bit level.

It was Brian Kernighan and P. J. Plauger (The Elements of Programming Style (1974, 2nd edition 1978), chapter 2, page 10):

> Everyone knows that debugging is twice as hard as writing a program in the first place. So if you're as clever as you can be when you write it, how will you ever debug it?

This is why you should never be clever when writing code.

Or organizations stuck with that code will be locked into impenetrable tech debt, while newer companies who didn’t do this idiocy murder then.

Or, probably, those larger companies force regulatory lock-in, and everyone is miserable.

Why are they idiots?

I can't help but recall a certain former coworker who apparently believed that he was getting paid by the word, the most committed user of autocomplete and IDE code-generation features I've ever seen, and imagine what he must be doing now with the help of AI. At the time, I felt like simply following him around and tidying up his sprawling, repetitive, bug-ridden verbiage could have been someone's full-time job; with his output accelerated by AI, I imagine he could keep a whole team busy.

"Code expands to fill the maintenance capacity of the available team".

There, Parkinson's law updated.

What is currently advertised as AI (LLMs) cannot replace all software developers. It is a tool that can make software developers more productive so there will be less need for low level positions but there will still be a substantial need for senior developers. LLMs, if tuned for software development, present an opportunity for a company, that can plan beyond the next couple of quarters, to produce software of unprecedented quality and with as yet unseen features and usability. Of course, there will be companies which will use LLMs incorrectly and replace most developers (and other people) and create products that are even worse than what is currently available since they don't understand what LLMs are or how to utilise them correctly. Those companies will either realize and fix their mistakes or go bankrupt.

> LLMs, if tuned for software development, present an opportunity … to produce software of unprecedented quality and with as yet unseen features and usability.

Given that I can barely get LLMs to produce an error free couple of functions I doubt that. Though I suspect it’ll boost the median quality of software.

IMHO software quality requires care and skill along with a management that values quality.

Take Meta, they had billions of dollars and spent it freely. Yet the Metaverse software is mediocre at best. They had John Carmack in their rosters and the Mets developers reportedly ignored him. Giving those developers the ability to make more code won’t make the results magically good.

Otherwise you make good points. Companies like Intuit using AI as a justification to lay off lots of devs will face issues later when it comes about that it doesn’t scale.

No one wants to look at actual data to confirm the claim in the headline?

https://fred.stlouisfed.org/series/SFXRSA

Nothing like that claim appears to be true.

Wolfstreet wrote an article on why they don't use Case-Shiller anymore and switched to Zillow data.

https://wolfstreet.com/2024/09/02/why-well-replace-the-case-...

Zillow's pricing metrics aren't free of flaws either, as it's not an appraisal but an estimate based on aggregate data collected by Zillow (which is non-exhaustive).

In SF (and the Bay in general), a lot of listings are handled locally via local RE agents or family offices and do not show up on Zillow (most notably in Chinese heavy neighborhoods like Sunset as well as the more old money Nov Hill+Richmond+Pac Heights areas).

And finally, based on the information provided by this blog, it just doesn't seem like a credible source. A blog dedicated on writing about the "Housing Crisis 2.0" on a near daily basis is not a great source.

Personally, as someone who is in the process of buying, inventory is low and prices are still fairly high (when factoring interest rates) because most buyers were able to buy up or refi during the near-0 interest rate days, and will not budge for that reason.

I think they are using the Zillow indexes that do include private sales, tax record sales etc. But I'm no expert just looked it up when op said it didn't match Case-Shiller.

> The ZHVI is based on millions of data points in its Database of All Homes, including historical transaction prices of closed sales from public records (tax data), MLS, brokerages, real-estate agents, and individual households across the country for properties. It includes pricing data on off-market deals and for-sale-by-owner deals. The Database of All Homes also has all sales pairs.

ZVHI doesn't take into account additional confounding predictors such as house quality, improvements (zoned and unzoned), historic status (limits improvements and changes becoming a significant headache for buyers in SF), etc that play a role in impacting pricing in SF.

Also, realtors in the Bay Area now recommend underpricing in order to spark a bidding war due to information asymmetry (buyers know the price is low but so is inventory so you need to give a significantly higher bid to lock in) - Mercury News is going to release an in-depth investigation about this in the next 1-2 months btw.

> Also, realtors in the Bay Area now recommend underpricing in order to spark a bidding war

I sold my bay area house in 2018 and this was common then too. Sold for 17% above asking, but IIRC, we were expecting 10% over. A bit of a change from when I bought it in 2009 from a bank at $900 under the listing price. Fwiw, the zillow estimate is up about 33% from the sales price. Their listed comps are from nicer neighborhoods though.

Is that index inflation adjusted? The chart looks very similar to the non-inflation adjusted price history for NZ (https://fred.stlouisfed.org/series/QNZN628BIS). The inflation adjusted NZ chart for comparison: https://fred.stlouisfed.org/series/QNZR628BIS . Notice that in the second NZ chart we are back around 2019 prices.

I couldn't find with Ctrl-F "inflation" in the linked methodogy: https://www.spglobal.com/spdji/en/documents/methodologies/me... so presumably not inflation adjusted.

With the way tech hiring is going it doesn't seem far fetched to see a retest of the 2008 bubble highs.

"San Francisco Housing Affordability At 2019 Levels"

And yet we wanted to double our H1B count?

H1B are sometimes paid less, so profit at the top increases while wages drop.

https://www.epi.org/press/a-majority-of-migrant-workers-empl...

H1Bs don’t displace local jobs.

They displace offshoring.

If the companies looking to H1B workers are only doing so to cut their costs irrespective of the quality of talent why wouldn’t they outsource the work to someone in India for 1/4th the salary and fewer benefits instead?

So, put tariffs on offshored IT work?

SF prices dropping back to 2019 doesn't mean much of anything given how high those prices were back then. SF throughout much of our history hasn't been the place for tech jobs, that happened sometime in the mid 2000s but wasn't true before then (Silicon Valley/San Jose were the places for tech). I expect that we won't see many big tech offices opening in SF anymore because they simply have a lot more better/affordable options to choose from.

But before the current tech boom in the mid 2000s, there was the "dot-com" boom in the 1990s and many early Web companies were in SF in the 1990s. And in the 1980s there was the financial sector boom as SF was the west-coast financial hub. You pretty much have to go back to the hippie era in the late 1960s/early 1970s to find a time when it was a cheap place to live.

SF will never be a cheap place to live like Honolulu will never be a cheap place to live. It is just such a nice city (even with the unhoused problem) that rich people without jobs will always bid up property prices, and young people will settle for various careers and substandard living situations.

Somebody needs to cross-check the LLM output, and it's better if they're cheaper than a domestic employee

And can be threatened into working unpaid hours

Faster, Please.

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