What Happens to Home Prices When Technologists Come to Town
redfin.com
redfin.com
What would be interesting to me though would be data along the lines of "What is different when technologists come to town vs. [insert some other group]"
- What does it do to supporting industries/economies?
- Do schools start performing better?
- Do the local municipalities fare better because of the group that is coming in?
- Do maker labs start springing up?
- Does the level of poverty decrease?
That's the kind of stuff I'd be interested in learning about. I guess I'm asking what ACTUALLY happens when technologists come to town that's different than when doctors come to town or garbage men, etc.
Technology on the other hand brings, so far, long term prosperity to previously declining areas. The problem I see is that municipalities want the prosperity without the consequences. They want the tasty burger without the cholesterol. Western economies, or rather, societies, have this strange unease with rapid urban expansion. An unease I have not encountered so much in Eastern economies and societies. In the east, progress is seen as generally good, whereas the west has greater suspicion of it.
I've been writing software for years, and it still feels like magic. People work 3x as hard as me and I make 3x as much as them. Many make real, physical things; i just type away on a keyboard. With the right incantations, you can build something that's worth millions. Just you, in your free time, creating something that can be used by the entire world.
Always reminds me of this louie CK interview on conan: https://www.youtube.com/watch?v=uEY58fiSK8E
After a couple of months we took out our first profit, which I think I spent some of it on an ipod classic. I was 14, and through clicking buttons and moving my mouse I now had an ipod in my hands that was all mine. That was magic.
I put together a few lines today that automates a 5-minute process. Across the scope of a few thousand servers, this obviates about 6.25 weeks of labor. It really does feel magical.
Why? Just because you work hard doesn't mean you deserve more
Its a major element of the ideology associated with the Protestant work ethic, which has an important role in American culture -- and ties intimately into the way large parts of the more successful population can dismiss the less successful as being so as a result of choice and moral failing -- that hard work both does, in fact, and should, in moral ideal, result in material success.
Even lots of people who intellectually reject the position are have been to some degree socialized in it and feel some dissonance when contrary facts are particularly palpable.
I'd say your claim is nonobvious. That the world is fundamentally fair, and that hard work is the most important aspect of virtue, are deep ideas in American culture and very much tied up with the American Dream (TM).
Contemporary liberals typically challenge the "world is fundamentally fair" part, appealing to structural *-ism that makes this untrue for people other than white men born to financially secure parents.
Few (economists, maybe) would argue that how hard you work does not influence how much you deserve.
(Ironically, people pay to lift weights at the gym, they don't get paid to! It's pretty darned hard work, too.)
I think people forget that until very recently, San Francisco was actually rather fond of its tech industry. It was viewed as a creative, slightly quirky, and generally positive culture that fit right in.
Tech is actually a pretty good industry to have around. Supposedly tech jobs create wealth and, as a result, stimulate more non-tech job creation around it. The problem isn't necessarily tech, it's too much of a good thing[1]
There's also a secondary issue, which is that pacific northwestern cities have a middle-to-recent history of not really wanting Californians around, so you might be getting a more negative response from Portland or Seattle to "silicon valley moving north" than you would from Baltimore or St Louis. An occupational poll I read recently suggests that the computer industry is still looked on positively [2].
Overall, though? If this just means that tech is finally spreading out a bit, so that people can earn a programmer salary in SF (about 114k according to US news best jobs) in a place where this means they can now buy a house, raise a family, and stimulate the local economy (and perhaps an anemic housing market), I see this as a good thing.
[1] Perhaps. There is an argument to be made that tech culture has gotten much uglier with the amount of money that poured in. Also, we spend a lot of time and mathematical talent getting people to click on ads now.
[2] http://www.gallup.com/poll/156713/americans-rate-computer-in...
SF's (SV's) problem is that it refuses to build houses commensurate to the number of people who move there. Any number of well paid jobs from any industry would have caused the same problem. High paying (middle class) jobs (outside of manufacturing) are not a problem.
> If this just means that tech is finally spreading out a bit
For better or worse, the exodus of tech companies out of SV could have been prevented. The valley could have captured nearly the entire industry if it just built more houses. Billions (likely trillions over the course of a few decades) of dollars will not flow into the local economy.
Compare that to the two regions' 5-year housing price index (a measure of the movement of housing prices). The Bay Area sits at 36 yet Houston at 25. Despite faster population growth, Houston's housing prices have not risen nearly as dramatically.
I have to imagine that can be at least partly attributed to the seemingly limitless number of houses being built around Houston.
(This comparison would probably make more sense if we could compare CSAs rather than MSAs but I couldn't find a breakdown of housing price trends at that level)
It also attracts much more foreign investment due to its location.
Texas has stronger ties to Latin America and the Middle East while still attracting a not-insignificant number of Asian buyers (Houston in particular has very strong ties to Asia). California obviously does get the bulk of investment from Asia.
http://www.realtor.org/sites/default/files/2014%20Profile%20...
Even if the rate of new construction pentupled, it wouldn't lower house prices; at best it'd make them increase at a slightly slower rate. It's a good idea on its own for the purposes of environment and urban development, but pretending that it'd suddenly allow a day laborer or a teacher's aide to be able to afford rent or ownership here adds as little as the people saying tech workers are source of all evil in the world.
Which means that housing will be tight until the builders can catch up. Unfortunately, Austin's roads and other infrastructure weren't designed for this influx and are overwhelmed. The city leadership recognizes it's a problem, but haven't been able to produce a coherent plan for solving it. Don't move here.
That homes are being paid for in cash doesn't indicate that there isn't a housing bubble -- it does mean that if there is, its not likely significantly an effect of a mortgaged-backed-securities bubble the way the pre-2009 national housing bubble was.
Sure. But other things could, too -- bubble-driven overbuilding of new housing and then having the influx of jobs stop could do it, especially if updates to shared infrastructure were deferred and the tax revenue to support them didn't materialize because the growth stopped -- the new houses would sell at lower prices because the new higher-paid workers they were made to appeal to wouldn't be there, but the total infrastructure demand would be similar, adversely affecting property desirability.
There's probably other scenarios -- and I'm not saying it is a bubble or that any particular popping scenario is likely (I don't know Austin that well), just that the fact that purchases don't seem to be mortgage-fueled doesn't mean that there isn't a bubble.
My friends here want me to tell you that 'Austin is Full', but everywhere you look there are help-wanted signs.
The article itself states that Microsoft employs 100k people in the Seattle area - more than the ~78k they show for Google, Apple, Facebook, and Amazon combined.
I'm a pretty decent UNIX and networks guy - but not a software developer sort of person, its just not the way my brain is wired, so at the rate we're going, I'm not gonna be able to afford to live here in 2 years.
Nope!
This is an easily solvable problem: http://www.amazon.com/Rent-Too-Damn-High-Matters-ebook/dp/B0....
Capitol Hill height limits and parking minimums are insane. I used to live across the street from Seattle U, and the apartment building was only four stories high. It should've been 20 stories, since everyone in it was connected to the university. Every street west of Broadway / 10th and south of Prospect should have no height limits or parking minimums. The problem can be solved: Seattle's politicians (and, by extension, voters) choose not to solve it.
not only have housing prices gone up, traffic and crime have as well.
Despite what the talking heads may have you believe, crime has dropped significantly in Seattle since its population and economic growth.
http://www.city-data.com/crime/crime-Seattle-Washington.html
I waited until I had a full 20% to get in the market, turns out I should have bought earlier because the 20% isn't going to help me now anyway given the all-cash offers out there. From what I have heard, a lot of this is due to foreign capital looking for a value store. But I also think this will just continue and get worse, as people in the Bay area look at the quality of life in Portland, compare housing prices, and conclude (rightly IMO) that the move is a no-brainer.
There's some good deals out there still but yeah.. in the same boat as you. I'm working on compiling historical pricing on a neighborhood basis so I can focus my attention on areas that haven't been seeing 10%+/yr gains. West Hills, for instance, homes have been appreciating only about 3%/yr. Of course those were way out of my budget to begin with...
Edit: If you disagree, could you please say why? I can be dense and clueless, but it's hard to improve if I'm ignorant.
I doubt that the problem is coders and tinkerers (well, I am one, so I am biased).