Big City Exodus: Rents of Single-Family Houses Rise Across the US, Even as Apartment Rents in Expensive Cities Drop Sharply

Californians applying to lease single-family houses in Arizona, Nevada & Texas doubled from year ago; migration from New York & New Jersey to Florida similar: American Homes 4 Rent.

By Wolf Richter for WOLF STREET.

Like so many trends, the growth in the number of single-family houses for rent, and the increase in rents at those houses, preceded the Pandemic, but the Pandemic has accelerated them. In September, single-family rents across the nation rose 3.8% from a year ago, according to the Burns Single-Family Rent Index (chart by John Burns Real Estate Consulting, click to enlarge):

The steepest year-over-year increases in single-family rents occurred in Kansas City (+7.7%), Memphis (+7.5%), Tucson (+7.4%), Phoenix (+7.3%) and Sacramento (+7.3%).

“Landlords are able to raise rents right now at a rate that is high in normal times,” Rick Palacios Jr., head of research at John Burns, told the Wall Street Journal. “It’s ridiculously high when you put it in a backdrop of a recession.”

None of the 63 markets that the index tracks showed year-over-year rent declines. The five markets with the smallest year-over-year increases were: Houston (+0.9%), Newark (+1.1%), San Jose (+1.2%), New York (+1.4%), and San Francisco (+1.5%).

This is in stark contrast to the apartment markets in expensive cities such as New York City, San Francisco, Boston, Seattle, Los Angeles, Washington DC, etc., where double-digit rent declines are now the rule.

In terms of national apartment rents, the sharp declines in apartment rents in major markets has overpowered the rent increases in many smaller markets and has caused the national average rent to decline, according to Apartment List data. In October, it was down 1.4% year-over-year and 2% from August 2019:

The report by John Burns notes that the single-family rent increase of 7.3% in Sacramento occurred even though the city lost 8.6% of its jobs, which should normally put downward pressure on rents, but not this time, as rents are “likely benefiting from Bay Area transplants seeking extra space while working from home.”

This parallels the trend in the multi-family apartment market: while rents in apartment buildings plunged over 20% in San Francisco, they surged 11.5% in Sacramento.

Even within San Francisco, rents in single-family houses ticked up 1.5%, according to John Burns data, though rents in apartment buildings plunged over 20%.

Same in New York City: single-family rents ticked up 1.4% according to John Burns, while rents in apartment buildings dropped around 16%.

The five rental markets with the smallest increases in single-family rents, with the exception of Houston, are experiencing “an acceleration in outmigration fueled by COVID,” which suppressed the ability to raise rents, according to John Burns Real Estate Consulting.

Single-family rentals are big business. There are now 16.42 million single-family rental houses in the US, according to John Burns, up from 11.59 million at the end of 2006, before the Housing Bust took off.

Until the Financial Crisis, single-family rental houses were largely the playground of smaller landlords. But during the Housing Bust, PE firms, with support and encouragement from the Fed and with Wall Street funding, piled into this business, each buying tens of thousands of houses out of foreclosure, thereby becoming mega-landlords. And the number of single-family rentals surged during that time, to reach 15.6 million by the end of 2014. Since then, growth has slowed, but has continued.

These PE firms later spun off their single-family rental entities into publicly traded REITs. The largest two are Invitation Homes [INVH], with over 79,000 houses; and American Homes 4 Rent [AMH], with over 53,000 houses.

There are a number of reasons why single-family rents are holding up despite the declines in apartment rents in the largest most expensive markets, according to John Burns Real Estate Consulting:

  • “Consumers placing a premium on their living space during COVID, causing an increasing amount of apartment renters to shift to single-family rentals
  • “Accelerating population shift to affordable, less dense markets with diverse economies (namely Sunbelt markets where single-family rental operators are concentrated)
  • “Homeowner forbearance relief preventing distressed supply from hitting the market as potential single-family rental units, which is what happened during the last recession
  • “Unprecedented government assistance for consumers (i.e., extra $2,400 unemployment per month cushioning renters through July, stimulus checks, student loan payment deferrals, and temporary eviction moratoriums)
  • “Extremely tight for-sale housing supply at entry-level price points, which is where single-family renters who want to buy a home typically search.”

The mega-landlords are more aggressive with their rent increases than small landlords. American Homes 4 Rent said that its new lease rates for October were up 7% year-over-year across its portfolio. Invitation Homes said that its new lease rates were up 5.5% in the third quarter, but renewals were up less, 3.3%.

The mega-landlords with their sophisticated marketing practices are seeing record high occupancy rates. Timely rent payments are in the normal range. For now, tenants mostly accept the rent increases instead of moving out. And new arrivals are going for those higher rents too.

Many of the new tenants are hailing from expensive coastal cities. American Homes 4 Rent COO Bryan Smith said during the earnings call last week, cited by the Wall Street Journal, that the number of Californians applying to lease its houses in Arizona, Nevada and Texas has about doubled compared to 2019, and that migration from New York and New Jersey to Florida has followed a similar trend.

As after the last crisis, fueled by ultra-cheap money, they’re taking financialization of the housing market to the next level. Read… The Big Boys Are Back: Financializing Single-Family Houses

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  110 comments for “Big City Exodus: Rents of Single-Family Houses Rise Across the US, Even as Apartment Rents in Expensive Cities Drop Sharply

  1. Joe Saba says:

    It’s ridiculously high when you put it in a backdrop of a recession.

    well if they’d(CA’ns) would stop populating our once GREAT STATE of Arizona
    now being overrun by heathens
    well it comes at price(cheaper for you) and MORE INCOME FOR US
    problem is can’t buy anymore – over priced

    Already planning on nice sized increases in 2021
    starting to price out retirees living on $700 a month(yah that’s all folks)
    85% going towards rent/utilities
    when I EVICT THEM they tend to end up on streets
    but NOW no one is moving

    • Zantetsu says:

      I hope more CA residents move to Arizona. Arizona is a place I would never, ever live, and people living CA would leave more room for the rest of us who stay here.

      Although my long term plan is to move north anyway.

    • GirlInOC says:

      Wait, is this a parody landlord account? Is he really bragging about evicting retirees on a fixed income & throwing them to the streets to be unhoused???

      • MarkinSF says:

        Yeah. But he’s nowhere near as bad as the heathens that are flooding into Arizona.

  2. Seneca's cliff says:

    Pacific Corp. here in Oregon ( an Electric Utility ) announced they would be instituting across the board 10% pay cuts for everyone working from home. They had to delay the new cuts a few weeks as Oregon is entering another lockdown period. So I expect as time goes on these single family landlords will have to reduce rents as the work from homers get their income squeezed by greedy employers.

    • JC says:

      Yep, the employers won’t cut pay, but they will let your income stagnate for the next 2 yr … pay me now or pay me later … working from home has its cost, it’s not all gravy

  3. 2banana says:

    If only we could detect patterns and common denominators in the “losing” states and the “gaining” states.

    Some kind of common thread.

    It is a mystery.

    “Many of the new tenants are hailing from expensive coastal cities. American Homes 4 Rent COO Bryan Smith said during the earnings call last week, cited by the Wall Street Journal, that the number of Californians applying to lease its houses in Arizona, Nevada and Texas has about doubled compared to 2019, and that migration from New York and New Jersey to Florida has followed a similar trend.”

    • NJGeezer says:

      Unfortunately BananaPerson those “gaining” states will soon be on the “losing” end of the election outcomes. Ultimately, the entire country will be overtaken.

    • California Bob says:

      I’m gonna go out on a limb and take a SWAG that in a few years–esp. if there is an effective and widely available vaccine–that there will be a sort of ‘reversion to the mean’ WRT WFH. That is, the remote workers will eventually notice that employees that show up in the office will not only land the most raises and promotions, but will get the heads-up to the more juicy, visible and fun projects. There’s no Zoom meeting or chat room that can compare to the impromptu meetings in the hall, the cafeteria, the rest rooms, etc. Eventually, we’ll see a migration back to the centers of commerce, finance and technology (but it’ll take a few years).

  4. Martha Careful says:

    As home prices go up in hot areas, the rental cost per sq/ft requires multiple roommates, and thus the powers that be assume that each bedroom is worth about one month of wages for a lower income person. I’m pulling that out of thin air, but that’s not too far from reality in a lot of places. Seems unsustainable, like everything.

    • The Original Colorado Kid says:

      That estimate holds for my area of the country, near Aspen, though sometimes even higher. The rentiers around here are now basing their rental prices on number of bedrooms. Number of bath rooms isn’t important, and some places don’t even have enough parking spaces.

    • GirlInOC says:

      This is a consideration amongst those that work in Low Income Housing coalitions. Ive seen this brought up a lot as a reason for doing something about high housing costs. Overcrowding living situations is unhealthy & is exactly the type of situation that viruses thrive off. And so, access to housing IS healthcare


  5. Russell says:

    Why the flight from Utopia?

    • DawnsEarlyLight says:

      Don’t worry, with the arrival of the vaunted vaccine, be ready for the great rush back to Utopia!

      • The Original Colorado Kid says:

        I’m currently in the Teton Valley, which is full of newcomers. It’s a very inhospitable place in winter, and people who’ve never driven on icy roads or had to haul wood to stay warm are already posting o FB asking for advice (it’s snowing).

        • MiTurn says:


          Where I come from in North Idaho, realtors call such folks “winter kill.” They move to ‘paradise’ in the summer and then a winter or two later they’re outta here! The realtors love it, because they get two sales: when they sell a house TO these unsuspecting folks and then sell the same house FOR these same people when they realize Eden has long, cold, winters.

        • Fat Chewer. says:

          I looked up the Teton Valley after reading one of your previous posts. It’s incredibly beautiful and just down the road from Yellowstone. Lucky you, but I can’t stand cold weather.

        • Paulo says:

          Yeah, our local campground was packed with displaced snowbirds just 2 days ago. I drove by today and saw that half have cleared out. They lasted about 2 weeks. Snow level is at 1500 feet asl. It was grey all day. If I had to spend a winter in an RV I would drink myself to death or do it even faster.

          Our living room wood stove is ticking cosily away as I write this. I cannot imagine the constant drone of a propane RV furnace in this climate, let alone be new to snow, November rains with sleet, and winter living conditions. FB, the sure fire way to learn life skills. :-)

        • Lynn H says:

          That’s funny. I absolutely LOVE The Tetons but am wise enough to know I’d never ever want to live there full time. Unless I had more money than I had any idea what to do with. And in that case I’d skip most of the winter anyway and just fly in and out. It’s America’s Siberia. Brr!!

          But what a gorgeous place!

        • The Original Colorado Kid says:

          The Teton Valley is beautiful, and I’m in Alta, right under the Tetons. I have some fantastic photos of the Grand I took from my living room chair.

          But…it’s been snowing for days and Teton Pass is on chain law and we’re supposed to get close to two feet of snow by the weekend. If I weren’t used to Colorado winters, I’d be nervous about driving the slick roads.

          There are wolves, moose, bears (still not hibernating), and mtn lions in the neighborhood, which is pretty cool, but I have to watch my dogs like a hawk, and you can bet newcomers from urban areas are going to be freaked when they realize how close these animals come in. I have to check out everything with a powerful light before I let them out at night (I’m on 10 acres), and you can’t let your puddy cats run. I had big cat tracks in my yard this morning.

          I have friends in Missoula and Kalispell who say the same thing – it’s beautiful there in summer, people move in not realizing how long and hard winters are with gray skies for months. I’ve been told you can see the Tetons here maybe 20% of the time in the winter.

          But I’m going south in a week anyway, beautiful as it is here.

        • The Original Colorado Kid says:

          I’ll add that a lot of people who live in the valley (Driggs) commute to Jackson over Teton Pass. A lot. And I’ve heard that roads in the valley sometimes get closed in all directions, basically stranding one here. Not for the faint of heart.

        • The Original Colorado Kid says:

          And at the risk of too many posts, I’ll add that I met a nice couple from Seattle who are already trying to move away, but can’t afford to because they can’t sell their Seattle house as they have a deadbeat renter and the laws there won’t let them evict in the pandemic. Not surprisingly, they want to move to Florida. :)

        • Walter Ego says:

          I knew a girl from the Grande Tetons. Is it close by?

        • The Original Colorado Kid says:

          Pretty close. The top of the Grand Teton itself is less than 20 miles away from my living room window. But if you come up here, call them the Tetons, as the Grand is a specific peak.

    • cas127 says:

      “The report by John Burns notes that the single-family rent increase of 7.3% in Sacramento occurred even though the city lost 8.6% of its jobs,”

      It is like watching Godzilla chase the villagers out of SF.

      And, that is *The People’s Republic* of Utopia to you, sir.

      • Tony22 says:

        The Villagers, those who grew up in San Francisco, are mostly staying, with the exception of those who Have Finally Had It with the city, its schools and quality of life and are bound for Sacramento, or Marin, if they can afford it.
        It’s the starry eyed techies that are going back to their room in Des Moines, that still has their stuffed animals and rockband posters from the turn of the century that are leaving in large numbers.
        Also splitting are the contract businesspersonthings whose company rented them skyhives south of Market.
        The third group about to leave is the wanna be musicians, artists and free spirits from all over America who have finally given up on the dream, or, are digging in, but living in their cars or a tent so they don’t affect the rental numbers.

        • Lynn H says:

          Oh, they really are musicians and artists. They just never get paid enough. IDK about musicians, but only 1% of artists ever make enough money to afford a sort of comfortable life. The rest of them who do have enough have trust funds. In the 90’s they could afford it and in the 90’s SF was a really vibrant city. Now it’s just dead.

    • Zantetsu says:

      Obviously because Utopia is expensive. Next question.

  6. Beardawg says:

    Thanks for this report Wolf. I know the other “rental” rate articles have been based upon 1BR and 2BR apartments. I have been invested in #1 market in this report (Kansas City single fam homes) since 2017 and have noticed both home prices and rents increasing, even though you can still buy a remodeled home for well under $100K. This confirms it.

  7. Dano says:

    All these Californians fleeing the “Golden State” so they can vote for the same kinds of people they allowed to destroy what they are fleeing…

    We should lock them in there until they fix what they broke.

    When I was younger, the ONLY place I ever wanted to live was CA. Thirty years ago, when I had the opportunity to move anywhere in the West to start a business, I immediately ruled out the state I had always desired to live in — too much regulatory insanity.

    Instead I move to the NW. Now retired, I live most of the year in the SW. here I fear the ‘migrants’ (and I’m not talking about south of the border) will destroy the new place I’ve come to call home.

    I guess there’s always Mexico. I hear it’s nice around Lake Chapala.

    • two beers says:

      Most of the people now fleeing CA are not “from” CA originally: they are carpetbagging professional managerial class equity locusts who came to CA and despoiled it for the natives. A huge number of them are now returning “home.” Good riddance to bad rubbish.

      Who cares how they vote. Either way, Wall St, Big Pharma, and the military industrial complex wins. Four more wars!

      • Stephen C. says:

        When I lived in San Francisco I learned that people called themselves natives if they had lived there over ten years. And man were they snooty about it!

        • Cdzrocks says:

          You’d be snooty too if you were born and raised here. People flee NY,NJ, and Illinois because their corrupt and derelect infrastructure and then come here and turn around and vote in the same crap here. Just under 40 years ago this was Reagan country and Republicans could at least reason and/or fillibuster to put a stop to the extreme madness these idiots support. I’ve watched my howlmetiwn lose Toyota and Nissan, we are all waiting for Honda to throw in the towel and move next. We all know it’s coming but there is nothing we can do about it.

    • Zantetsu says:

      CA has not been destroyed by any metric and the fact that you would say that shows considerable willful ignorance.

      Yes please move to Mexico.

      • MCH says:

        Absolutely, for example, we have a great high speed rail to prove it. It world class and utterly awesome.

        Came in under budget and is ideal for replacing both cars and airplanes.

        Nope, CA is not destroyed the same way HI is not destroyed (the latter by 40 year of one party rule). The former is only a decade (May be two) into this process. Fortunately, unlike HI, CA has a lot more meat left on the bones.

        • Zantetsu says:

          I see. So “not having high speed rail” = “destroyed”. So every state in the nation and 95% of the countries of the world are destroyed. I did not realize that this is what the word “destroyed” meant, consider me enlightened.

      • Cdzrocks says:

        Not destroyed yet. But who do you suppose is going to pay the over one trillion plus unfunded pension liabilities? You’d probably say the rich who don’t pay their fair share, right? Hah good luck with that one.

    • Lee says:

      “I guess there’s always Mexico. I hear it’s nice around Lake Chapala.”

      The climate there is really nice and there were some nice markets.

      When I was a grad student in Mexico – (some 40 years ago !!!) visited the area.

      I have no idea what the security situation is like there now or the cost of living.

      I read the drug war is all over Guadalajara – has it reached that area?

    • Chi Square says:

      Same problem in Florida. Most New Yorkers moving to FL tell me how awful NY taxes and government service are. Then these morons vote for the same crap politicians and policies in FL.

    • IdahoPotato says:

      “All these Californians fleeing the “Golden State” so they can vote for the same kinds of people they allowed to destroy what they are fleeing…”

      True. I live in Blue Boise and these rugged individualist retirees from CA with their state pensions need to adapt here instead of lecturing us about how we have it all wrong.

    • Lisa_Hooker says:

      Yes, lots of English speakers in Ajijic, but Chapala is not what it was in the 50’s, lately it is getting better. It’s a very shallow lake.

  8. Joe McPh says:

    Boston rents are plummeting. Condos are next. SO many people want out. Never thought it would be this bad. SFH should drop but be OK in the long run hopefully.

  9. Absur Ditty says:

    Everyone deserves a great place to live wherever they want it. The govt should control the rent or cut checks to people suffering from these rent increases, and equalize rent across all zip codes. If too many people want to live in a certain zip code the govt should have a system so they can take turns living there.

    • MonkeyBusiness says:

      Absurd. Real estate is limited. I want to live in Malibu Beach. So do a lot of people. Should the government create a slum there?

      Taking turns? Who’s gonna pay for relocation, etc?

      I see someone smoked too much weed today.

      • DawnsEarlyLight says:

        Now now, don’t bring him down down…

      • BuySome says:

        Technically has been a government fostered slum since the first highway, but we don’t need to cover that history. So hey, get in line. I’ve already been holding my “gooney bird” decoration to put outside the front door for many years now. C’mon tidal wave..Daddy needs a new beach shack. Got sex wax?

      • Lisa_Hooker says:

        Yeah, I want to live ON Malibu Beach, or maybe on the beach on O’ahu.

    • Anthony A. says:

      I can’t believe I am reading this. How did it get past moderation?

    • Cas127 says:

      Two words.

      “Bunk Beds”

      Next up, the redistribution of Hotties.

      • Tony22 says:

        “Hot beds”, two shifts per 24 hours, or even three, sharing a bed. That’s how it was during The War around Richmond or the aircraft plants in L.A.

        I really want to live in Santa Barbara, on the beach. It’s just not fair that there is not enough public and low cost housing to accommodate my wishes. Maybe some developer backed astro turf YIMBIES can pressure the local leaders to allow highrises to be built?

        What a difference 11 months makes!

        –Making It Work: Administrative Reform of California’s Housing Framework
        How recent legislative changes have been the state greater power to enable prohousing policies–

        “As California’s housing crisis swirls through the national news, attention has focused on statewide upzoning bills. Sen. Scott Wiener’s ballyhooed effort to allow 4-5 story buildings near transit {!} was tabled until 2020, but earlier this fall the legislature effectively terminated single-family zoning, authorizing homeowners to add two “accessory” dwellings to their property.”

        Plenty of transit oriented housing is now available around BART stations in the Mission District, Glenn Park and especially South of Market.

        • GirlInOC says:

          SB1120 would have allowed duplexes on all SFH zoned lots. It passed the Assembly but they didn’t give it enough time for the senate to be passed before the session timed out. There’s definitely political will in CA for upzoning & I believe a lot of YIMBYs just won their state seats.

    • Stephen C. says:

      Take a look at this guy’s handle before you judge the comment. I think the person is being sarcastic.

      • Paulo says:

        Of course it was sarcastic!!

        But here is some advice if you live in a great place. Keep quiet about it or you will be fighting to keep it livable.

    • Nick says:

      Honestly I’m convinced. Socialized housing! Build it out in place of primary residence, and take turns for tourist spots. Landlords the ultimate rentiers and won’t be sorry to see them figure out a productive role to take up in society.

    • The Original Colorado Kid says:

      We already have it, it’s called Airbnb (minus the govt. being involved part). People take turns living in a place.

    • DawnsEarlyLight says:

      Most ‘entertaining’ post of the day!

    • Javert Chip says:

      Absur Ditty

      Well, at least you’re named appropriately.

      The wonder is that this truly impressive level of naivety outlasted your learning how to write.

    • Lee says:

      “Everyone deserves a great place to live wherever they want it.”

      Gee, I’d like to live in the Trump Tower Waikiki………………can I get a check for the rent?

    • Lynn H says:

      All they have to do is put a cap on foreign ownership/investment and charge much higher taxes for empty houses.

      Also not give PE free money. What a concept.

  10. Jackstuhrter says:

    Nobody “deserves” anything in life, we get what we are able to provide. Housing is not unfortunately, a right. It is something we work for and it has many levels and degrees of acceptance. Most folks would like a bigger or nicer home, me included, but where is it written that we all get what we want regardless of our ability to afford it?

    Yes the housing/rental market needs lots more government control and regulation because that has, over time, proven to reduce rents, lower costs, and spur tons of housing development.

    Yay for more regulations! Free stuff for everyone yipee!

    • Lynn H says:

      Actually, “Polling indicates that three-quarters of Americans believe that adequate housing is a human right,” and also “In 1948, the United States signed the Universal Declaration of Human Rights (UDHR), recognizing adequate housing as a component of the human right to an adequate standard of living.”

      I would add that having more and more and more homeless people every year without adequate sanitary facilities lowers the standard of living for all of us.

      • SarahBakela says:

        Polling is very accurate and always defines reality does it not?

        Of course not.

        Just saying, what people believe often times runs face first into the world of reality.

        Having more homeless with or without sanitation is not desired, but is I believe at its basic level an addiction and mental health issue that if not addressed as such will continue unabated.

    • Engin-ear says:

      “Deserves” has no practical meaning.

      The “rights” means that you can keep something that you own.

      The rights were invented by the aristrocracy to keep their lands independently of king’s fluctuating sympathy.

  11. The Rage says:

    Most are older people. I would bar them from coming into the state except for Florida where this is common practice.

  12. Caveman says:

    Hahaha. You forgot the “/S” for sarcasm.

  13. makruger says:

    Meanwhile, amongst all the weakness in residential multiunit REIT’s…ticker APTS is up about 30% over the last 2 days. Would have been even more if not for a big pull back at the end of the day. These REIT stocks are probably about as volatile as they come, making even energy and cannabis stocks look like highly stable blue chip investments.

  14. Boysur yuuncle says:

    So Wolf, i will assume sarcasm is not allowed except by your regular loyal followers?

    Okay then.

    Facebook twitter google all msm and now Wolfstreet too?

    • Wolf Richter says:

      Boysur yuuncle,

      What’s your problem? You sign in with a different email/screen name just about every time, and each time you change one or the other or both, your comment becomes that of a first-time commenter and I have to go through the procedure with it when I have time. It’s a lot easier if you use the same screen name and the same (fake) email each time.

  15. Boysur uuncle says:

    “I see someone smoked too much weed today”

    I guess leaning more towards insult is preferred over sarcasm, got it.

  16. RoundAbout says:

    Work from home proves your job can be outsourced. You think they wouldn’t do it?

    • Cas127 says:

      Maybe, but mgt would have to be dimwitted beyond dreams of dimwittedness, not to be able to look around the office, notice what people actually do 85% of the time and not realize those jobs could be telecommuted/offshored/whatever.

      And it is more than possible to f up with offshoring (moving jobs to places where English literacy is more theoretical than real, ditto product understanding, etc.)

      That is one reason why reshoring is a thing.

    • Zantetsu says:

      I’ve worked directly with many foreign workers. I am not worried.

    • MCH says:

      In the long run, everyone is expendable. What’s the point?

      If someone is able to do the same work for cheaper ideally at the same quality, any rational company would hire them. It’s simple economics.

      Heck, if you can get two software engineers from India to replace one guy in the valley, you’d figure out a way to make it happen.

      It happened to guys doing manufacturing engineering 20 years ago, why should it be different now.

      • Sam says:

        Example; an aftermarket automotive mfg moved its heat treatment facility from Ohio to MX. Cost ratio was one US worker for four MX workers.
        The US technicians were required to train their MX counterparts.
        The company’s metal forgings are sourced from China, finished machined in US, heat treated in MX, then shipped to retailers in CN & US.

        • Cas127 says:

          I wonder if anybody on the boards has experience in the manufacturing end of the electronics industry…which in many ways is the core of China’s huge trade advantage over the US.

          (Computers and communications eqp primarily).

          The interesting bit is that China itself imports a ton of ICs to be combined into the final products, yet it appears that China captures a disproportionate amount of the value add, basically just for the assembly step.

          Perhaps this is related to the Apple Doofus Effect…Apple is able to bamboozle US consumers into paying $500 for phones whose broad Android equivalents might be had for $10 to $50.

          With that Doofus margin, Apple can in turn lavish margins upon its army of Chinese manufacturers.

          Any industry insiders care to opine on this theory?

        • MCH says:

          Yep, well, the example is accurate, this is what happens with globalization.

          There is no point blaming China, India, Mexico, or anywhere else. It’s just pure logic. The one reason the valley has thrived is that it’s the one place in the last two decades where there is a network of money and connections to ensure more wealth creation. The engineers and such, they are looked upon primarily as resources to be used or replaced.

          But that is nothing new. This was true in the past as well. The only difference is that you change the geographic location, plaster on some new labels about culture, openess, blah blah blah to bamboozle the media and the public, and meanwhile, the dollars continue to flow. It’s a combination of aggregation and network effects.

      • Exploiting the foreign currency exchange these businesses are subsidizing a lower standard of living in order to screw their neightbors? (They hire black, yellow and brown foreign workers then spew racism against the same people in their own country) You can dress up Social Darwinism any way you want, a guy who hires illegals rails against them, runs for president. Never thought America would be this blind.

        • IdahoPotato says:

          “Never thought America would be this blind.”

          This has been the American model since 1776. No surprises here.

      • Saylor says:

        I was one of those in the electronics industry in the 80s. I watched and was required to interface with my counter part in Singapore as we transferred product there. The cost of labor was just one factor in the race to move off shore. Other reasons were tax advantages (both domestic and foreign). There were a lot of things in play regarding to U.S. demand supplied from off shore. Both market and diplomatic. I just wish we had instituted tariffs based upon things like environmental protection (i.e. you dump more bad stuff in the air/water/land? You pay a tariff. You run a clean operation? You pay little or no tariff.) But that would be too responsible of planet stewardship. And it would cut into corporate profits.

        • 91B20 1stCav (AUS) says:

          Saylor-not tying foreign ‘free trade’ privileges with the U.S. to verifiable OSHA/environmentally-responsible manufacturing processes was perhaps America’s greatest missed opportunity in modernizing/cleaning/preserving/extending the life and leadership of our industrial base and employment (i.e.-something i frequently wrote my Congresspersons about over the years-foreign manufacturers needed to meet the same regulations as those in the U.S.). A raft that long-since floated down the river.

          May we all find a better day.

  17. drifterprof says:

    I’m okay with low profit in renting my Oregon coast house, which is caused by high property taxes and ploughing money back in to keep it nice. I’m hoping Californians etc. drive up the selling price real high in some future dysphoric migration. Profit from selling it will add nicely to living in my very comfortable setup here in Thailand, all the way until I kick the bucket.

    I don’t try to get market level rent from my southwest Colorado house either. An old retired couple rents it, and they live on Social Security only. So I like to keep the place in nice shape and the rent low — as kind of a parting tithe to what were my fellow Americans back in the day.

    • MooMoo says:

      …until capital controls mean you can’t get that rent money in Thailand

      • Stephen C. says:

        Capital controls coming soon is no joke. Michael Pettis is talking about it, and although his paying audience is, I believe, wealthy people, the new regime that comes down the pike could very well terminate the retirement-abroad plans of many a middle-class USian refugee/migrant/asylum-from-the-crazy-seeker.

        • Lisa_Hooker says:

          As long as the US has high foreign imports it isn’t hard to set up a chain to export capital.

    • DawnsEarlyLight says:

      I saw you on HGTV! /s

  18. Lynn H says:

    If it doesn’t crash we will have a huge wave of newly homeless in the middle of the winter. I think that wave might push us into some real civil unrest. Could be unfocused. Both in the cities and in rural areas. Lots more robberies in my rural area lately..

    • The Original Colorado Kid says:

      My home area of W. Colorado is having a huge crime spree of stolen vehicles, many in broad daylight. So much so that the regional LEOs are posting advice on hoe to keep your vehicles safe. This area was basically crime-free until just a few years ago.

  19. In my area of CA homes are undervalued relative to condominiums. A house on half an acre rents about the same as a 2BR apartment, one way the CPI is broken. Land is a liability. Cost to rebuild for insurance purposes is consistently higher than market price. When you get to retirement age and you want something smaller you have to pony up, or move to a red state.

  20. Island Teal says:

    Great comments. My significant other and I have decided to permanently move to 1955 Santa Monica,CA while still having the knowledge of today.
    Think through this and you would wish for he same thing ??

  21. Tony of CA says:

    San Francisco is finished. It’s a wrap.

    • MonkeyBusiness says:

      Finished for overleveraged people. 30 to 40 years ago, SF was much cheaper with fewer people, and it was fine.

      Some of us are hoping to go back to that period.

    • Tony22 says:

      Bro…Having lived here all my life, I agree with you.
      The land will always be here, the weather, most of the architecture, barring The Big One, but the people that can move, not likely.
      The 1st, 2n, 3rd generation Asians that own, the majority of residential owners, will be here until 2200, the housing project Asians and mostly blacks have been X generations since 1950s and will be for another century, the younger and middle generation that owns homes is what’s in flux. If they are starting a family, they will sell and leave, unless rich enough for private schools.
      The change I have seen in the last 25 years has almost been replicated in the last 10 months. At this rate of change, this place will be practically unrecognizable soon.
      The coming collapse of Fire and police public services caused by tax funding drying up is worrying. Most of what the city provides is fluff and bullshit and will not be missed, except by the opportunistic parasites that feed off it.

  22. SuzeB says:

    I’m just a casual observer but here in Boston and surrounding areas, watching the copious building of “luxury” apartments and condos over the last several years, seemingly on every street corner and even in formerly considered “undesirable” areas filled me with a sense of dread and foreboding. Everything, everywhere had to be “luxury”.

    A former monastery in Brighton, MA – St. Gabriel’s – was recently converted into a “brand new luxury community” and I read online in July 2020 that “Studios at the Overlook lease between $2,163 and $3,349 a month.” A studio could be 414 square feet. Yes, you too can live in “luxury”!

    According to a quick look today at, current rental rates at St. Gabriel’s are: Studio $1,994 – 3,245, 1 Bedroom $2,450 – 3,875, 2 Bedrooms $3,238 – 6,524, 3 Bedrooms $4,900 – 6,520.

    Yet, there is this: “Two Month’s Free Rent on Move-ins by November 30th! Lease today and sign a 12 month lease and receive 2 month’s free! Call for details.”

    • Tony of CA says:

      No thanks. The pandemic clearly demonstrates heavily blue cities are finished. My guess when the dust settles the Governor of Florida will be are next President in 2024. The collapses of Blue States is going to be epic. Overly regulated and high price states are really doomed.

  23. Bobby Pen says:

    Housing is indeed Crazy, and it will not get better. Some people think that it will crash… Not.

    Checking prices in Santa Cruz county and Monterrey County.. 30 and 50 miles from San Jose, CA. Prices are ridunkculous. 2b 1b, 80 year old shacks are going for $2200 to $2600 bucks. it’s 5 miles +plus inland, you can NOT walk the beach, so you know.

    These prices are for an area where agriculture is the primary source of jobs. Those of you familiar with the area should know what I mean.

    This is where we are now. I don’t see how it will get better. Housing will not come down in a meaningful way! so, that average working people are able to live in a dignifying way.

    I don’t see a housing crash that many people talk about, I’ve read so many articles on wolfstreet about the housing crash that now is more of “yeah whatever” every time there an article about crashing, Assets: housing and stocks go up.!!!

    • Tony22 says:

      Wait two years. The economic collapse for want of discretionary spending, the end of mortgage, rent and student loan forbearance, plus jobs evaporating plus medical extortion and bills for pandemic then economic collapse, will make today’s prices yesterday’s faded dream.

      This may be the first generation of American ragpickers and starving children since the great depression. Government will have to subsidize smartphones to keep the masses happy, tracked and able to spend their food credits.

  24. Mr Wake Up says:

    Just wait until extend and pretend evaporates under the next administration.

    GFC had no forbearance no ppp

    Volume is down

    Investors who purchased @ 5 & 6 caps switched to 8 caps now when u call with a 8 cap they want 10 12 lol

    Industrial end users officially priced out by last mile PE eating up what’s left.

    Reduced pricing, days on market, back on the market, sub lease offices spaces flooding the market vacant store fronts galore, all becoming the common daily theme.

    Best of luck to all who need it…

  25. Yertrippin says:

    The amplification distortion field enabled by Face Book etc. grows by the day. It nurtures a never ending parade of soft headed t*ts gleefully sharing their ignorance. Even on this usually thoughtful comment board it’s picking up steam. Celebration of other peoples misery is the new intelligent.

    Ya’ll some sad human beings.

  26. Saylor says:

    I was one of those in the electronics industry in the 80s. I watched and was required to interface with my counter part in Singapore as we transferred product there. The cost of labor was just one factor in the race to move off shore. Other reasons were tax advantages (both domestic and foreign). There were a lot of things in play regarding to U.S. demand supplied from off shore. Both market and diplomatic. I just wish we had instituted tariffs based upon things like environmental protection (i.e. you dump more bad stuff in the air/water/land? You pay a tariff. You run a clean operation? You pay little or no tariff.) But that would be too responsible of planet stewardship. And it would cut into corporate profits.

  27. Gian says:

    Housing costs will never be affordable, thanks to the man and his regulations and BS fees. I am developing a 5 acre parcel in the looney PNW. Wetlands you say, of course, costing me over $12K just for a survey and mitigation report. This, only to find out the county will let me build on about 1/3 rd acre because of puddles and weeds that would be disrupted. Estimated Mitigation costs, $38K (sure to go up). Not to worry, had a logging company come out and tell me I have $40K worth of harvestable cedar. Come to find out, I can’t touch that either. Silly me, I thought I owned this property! None of this BS was in place when I purchased this property. What choice do I and other developers have than to pass this on to the poor SOB who will ultimately foot the bill?

  28. Cdzrocks says:

    It’s going to be real interesting to see how the new “adverse market fee” is going to affect the mortgage market. We are now entering the time frame where it’s starting to be baked in to the refinance fees. I wonder if the FEDS plan is literally to prop up the market buy using purchases by essentially backdoor bankrolling via refis. Il

    It’s real interesting to see them penalizing people already having money sunk into their investment. Why penalize people that stand to benefit from lowering their standard of living? The amount of money saved is likely either being plowed back into the house via remodeling or paying down debt faster. They seem hell bent in maintaining demand and asset prices.

    Why not go full printing press and negative rates already? They have already been flirting with it for a few years now. Just go full clown show already.

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