This is a classic case of "Nobody ever comes here anymore; it's too crowded."
It is hard to make the argument that people are fleeing silicon valley when real estate demand keeps reaching new highs.
It is hard to make the argument that people are fleeing silicon valley when real estate demand keeps reaching new highs.
My rent is about 40% of the going rate for the identical apartment above mine. This has several consequences. I literally cannot afford to move. For another, it would be difficult to fit another child in the place we have, so we're not having one. And it's more difficult to hire people from outside the area because they can't find affordable places to live.
I'd try to do a van-plus-PO-Box-plus-health-club situation but my girlfriend would probably never go for it.
There are more affordable places (still expensive, but less so than SF/Silicon Valley) within reasonable commute distance of the core of the Bay Area. If you've got good bay area job prospects, you might consider initially living on the peripheries until you can build up a cushion that lets you move further into the core.
((current rent under rent control from 10 years ago)/(current number of rooms))(current number of rooms + 1)
Instead it's going to be:
(current number of rooms + 1)(current rent per room in SF when you decide to move)
In other words, if you don't lock in an extra room now and sublet it until you decide to start a family, then you're shit out of luck.
One question, that isn't often discussed, is how many homes are bought to live in vs. bought as investments and rented. Either way, monthly mortgage or rent is going up, but I wonder how much of the movement in the market is due to real estate investors vs. home owners.
Or bought as investments and not rented out (I hear a lot of anecdotes about this).
More and more, NYC, London and SF are the real estate equivalent of buying gold, but way more profitable. The most interesting thing about this property my brother recently staged is that it was on the market for about $5-6 million until just before the 2008 crash. After the crash, it and many many apartments just like it skyrocketed in value as the economy crumbled. Basically lots of very very rich people, often Russian and Chinese, but not exclusively those nationalities, expatriated money to SF, NYC and London to buy real estate as a relatively safe store of value.
A good friend of my father (who lives in Brazil) is worth several hundred million and he owns an apartment in NYC worth several million that no one lives in. Between he and his family, they probably use it for at most one month per year.
That only counts for part of the problem. Something like 5-10% of the SF housing stock to which rent control laws is applicable is kept off the market because landlords prefer not to deal with the hassle of tenants rights. I forget the exact figure.
Those of us in tech probably know more of the latter.
It's not that "nobody goes" because it's too crowded. It's that the people you want don't go because it's too crowded with people you don't.