As “Rent Spreads” Shrink, Exodus Ends? Rents in San Francisco & Silicon Valley at Multiyear Lows, but Soar in Sacramento, Fresno, Lake Tahoe Area

At what point does the shrinking difference no longer justify the move? But wait… the Exodus for the Sierra Nevada isn’t driven by savings.

By Wolf Richter for WOLF STREET.

People’s reaction to the changing work environment during the Pandemic, particularly to the sudden explosion of unemployment and the switch by major companies and government entities to working from home, have thrown the apartment market into total turmoil, with people leaving large expensive city centers and moving to distant locations, or just moving further afield into smaller towns or the mountains. This shows up in plunging rents in those expensive cities and in soaring rents in the move-to areas. This is precisely the scenario in the San Francisco Bay Area, where a massive shift in rents has played out.

In San Francisco, the most expensive rental market in the US, the median asking rent for one-bedroom apartments in March remained at the multi-year low of $2,650, down 29% from June 2019, according to Zumper:

What everyone wants to know: Has this move gone as far as it’s going to go, 12 months into the Pandemic? And will some or all of it reverse as people come to their senses and move back or whatever? There has been intense speculation and feverish hopes at every twist and turn.

In Silicon Valley… In San Jose, the third-most expensive major rental market in the US, the median asking rent for a 1-BR apartment dropped 3.7% in March from February to $2,100, down 18% from the peak in July 2018. In San Mateo County, 1-BR rents were down 19% from a year earlier.

In Oakland, the median asking rent dropped 3.5% in March from February, to $1,930, down 23% from the peak in October 2019.

“Asking rent” is the advertised rent but does not include concessions, such as two months free. “Median” asking rent is the middle: half of the asking rents higher and half are lower. Zumper’s data covers apartment buildings and new construction, but not single-family houses for rent or condos for rent. Zumper collects this data from around 1 million listings on Multiple Listings Service (MLS) and other listing services, including its own listings.

But in Sacramento, the median asking rent for 1-BR apartments has surged by 9.2% year-over-year, and by 12.7% since July 2019, to $1,420. The city is at the edge of the Bay Area, about 90 minutes by car on a good day from San Francisco.

In Fresno, the median asking rent has surged by 18% since July 2019. The city is in San Joaquin Valley, a primary agricultural region in California. It’s a three-hour haul by car to San Francisco. But it’s close to Yosemite National Park, Kings Canyon National Park (just 1 hour), Mt. Whitney, and other marvels.

At what point does the shrinking difference no longer justify the move?

That’s a question that many people are asking when they make the move to a city like Sacramento or Fresno.

And these “rent spreads” have shrunk massively. Between San Francisco and Sacramento, the difference in the 1-BR rents has narrowed by half since July 2019: In San Francisco, the rent dropped from $3,720 to $2,650 over the period. In Sacramento, the rent rose from $1,260 to $1,420. The difference between the two cities narrowed from $2,460 in July 2019 to $1,230 now. And the rent spread between San Francisco and Fresno has narrowed by 46%, from $2,720 to $1,470:

But people have other reasons to move… a passion. Once you no longer have to show up at the office except occasionally, why not move to where you really want to move to, even if it doesn’t save a lot of money, or any money.

In Placer County, the median asking rent for a 1-BR apartment has skyrocketed by 30% year-over-year. The county reaches from Sacramento across the Foothills into the Sierra Nevada to Truckee, the northern part of Lake Tahoe, and the Nevada state line. It includes cross-country and downhill ski areas.

This has become a red-hot move-to area for people in Silicon Valley and San Francisco. People go skiing for a couple of hours and then return to their Zoom meetings and coding with a huge smile on their face. That’s hard to beat as a work environment.

In El Dorado County, the median asking rent has soared by 20% year-over-year. The county is just south of Placer County, reaching from Sacramento across the Foothills into the Sierra Nevada to the southern part of Lake Tahoe and to the Nevada state line. Ski areas in the winter, gorgeous hiking areas, such as Desolation Wilderness, in the summer.

People who work from home have the liberty to live where they want to live, either to be able to exercise a passion, or to save large amounts of money on housing – or both! And they all do their math and struggle with their own equations, unless it’s an impulse decision to be challenged by reality in short order, and that too is happening.

But at some point, as the price differential narrows, the equation changes, and decisions change. And every landlord in San Francisco and in Silicon Valley is now looking for signs that people are coming to their senses and returning to the big expensive cities. And by the summer, some employers may require that some of their employees to show up at the office four or five days a week. But for now, the rental data shows that the exodus has not reversed.

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  150 comments for “As “Rent Spreads” Shrink, Exodus Ends? Rents in San Francisco & Silicon Valley at Multiyear Lows, but Soar in Sacramento, Fresno, Lake Tahoe Area

  1. LongtimeListener says:

    People are nuts. We are all fucked. Lets just end it now with nukes. I hope to die quickly but survive long enough to see the first emp wipe out all the bit coin, so I can die laughing before the shockwave gets me.

    • Bobber says:

      What is so world-threatening about people wanting to ski?

      • Lynn says:

        Because many of the blue collar workers and store clerks and poor have had to move out of the city because of rising costs of living. Now many have to move again because of rising costs of living- rent. People have nowhere to move to.

        I know one seasonal worker, US citizen, who sneaks into Bali for most of the year just to survive. She can find minimal rent there. Not a bad place to live for sure, but she had to leave Oregon as she couldn’t afford rent and the off season jobs didn’t pay enough for rent. Her housing is fairly minimal in Oregon too- has housemates.

        I know of many people in their 20’s and 30’s who work full time and camp in the bushes. People get sick of that. And angry. Who do they blame besides politicians?

        • Anthony A. says:

          Hey Lynn, how does someone sneak into Bali?

          I’ve been there several times and it’s not like you can drive from Oregon and crawl under a fence to get in.

        • Brad Tifman says:

          You forgot to mention the tyrannical mulcting in the cities, and beyond. I got an email last year from someone I used to know that still lives in Chicago.

          He essentially said that my complaints about and predictions in the 90s as to how bad Chicago’s mulcting would get have all come true and then some.

          Chicago is a city that in the 90s and early 00s ran an outright towing scam near Navy Pier–the city, not a private firm. And when people complained of the other, and wider, towing scam the city was running, the city just changed the ordinance to make their scam seem legit.

        • Felix_47 says:

          I know a number of people who had to move out of California to France, Italy and Germany because the rent and other costs were too high in Ca. If you are self employed and making less than six figures you cannot afford to live in Ca unless you are undocumented or poor with lots of kids. You certainly cannot enjoy a middle class existence and I don’t mean a Jor Biden 400,000 per year middle class existence.

        • Lynn says:

          Anthony A.
          Non citizens of Bali can only be there for X amount of time. She’s there longer.

        • Gerrard White says:

          @Lynn

          She can afford to fly to Bali?

          I think the discussion should be about the genuinely poor or hard hit, not those who tourist to exotica

        • w says:

          Themselves and life choices?Working full time and cant or wont get a roomie or move back home a while?More or different training,education,moocs,community college,free online certificate programs from decent library systems?Maybe a second job and cut expenses like:cable,extravagent cellphone plans,takeout coffee/food,professional haircuts/mani/pedis,overpriced slavelabor clothes,pricey booze?Learn to budget and find appropriate charity or govt. Programs?

        • Lynn says:

          Gerrard White

          Absolutely. Flight and food and shelter is much cheaper than renting a crappy apartment in a mid sized town in Oregon. If you stay for 5 or more months at a time.

    • Cem says:

      It helps to be that dramatic about… rents?

    • flashlight joe says:

      Verizon cut off my wife’s phone because the post office lost my check. She is very ill and could not connect to a zoom medical call with her doctor. Since they sent me a bill outlining the unpaid balance and late charges, and I have always paid my bill, cutting off our 4 family phones seems a bit vindictive, criminal actually.

      So “somebody” (or some catastrophe) can cut off your bitcoin, your credit card, and your phone. I don’t trust any of them, and am amazed that people are infatuated with this technology.

      • Anthony A. says:

        Joe: Some advice if you can do this…..pay all your bills with your bank bill pay (electronic payment) and eliminate the post office. It’s only going to get worse with their service. Good luck!

        • SuzeB says:

          Agree, I pay most bills via online banking. Alas, I assumed my bank (B of A) was sending electronic payments to my new CapitalOne credit card only to find out they were mailing paper checks to this account (not sure why). This resulted in $25.00 late fees, was able to get the most recent one removed once I realized what was happening.

      • Jeff says:

        In addition to the other advice here, I’d suggest switching cell companies. I’m with Spectrum, it’s $14/mo for one line: talk, text, and up to 1GB of mobile data. I haven’t gone over, but if I do I’ll pay some incremental amount. My payments are automated and I get the bill and confirmation of payment by email. Don’t know if that would work well for you, but it works well for me. They use Verizon’s network which is the best choice here in MT.

      • w says:

        Totally correct!People give tech too much power and the owners or ceos of tech co.s get too much power,info.,and $!You are right to not trust any of them.Goole just announced some tech breakthrough pertaining to quantum blockchain decrypting,let That sink in!!No secrets from them d.o.d,govt.,bitcoin,etc.Bitcoin doesnt help if you cant access it,it’s not accepted,not secure,etc.Verizon or one of the well-known cell co.s just announced recently that they would openly sell their customer data.You all better look into That.

    • Alec Zander says:

      hilarious

  2. Micheal Engel says:

    1) SF apartments lost millions in value. Davis is up tens of thousands.
    2) SF 1BD real rent is down 1500 from under 3K, Sacramento up 150.
    3) SF front end cracked. SF RE is stuck in the sand like a container ship in the Suez canal. The spitz stabbed the sand cracked. The hull might bend, capsize and sink in the shallow water, like the Costa Concordia, Italy 2012.
    4) AMZN is stuck in the sand for 10 months.
    5) AAPL + MSFT for 7 months.
    6) SPX spitz push forwards, diagonally for 5 months, deeper in the sand.

  3. YuShan says:

    People are prioritising their quality of life more and more. And for many, the pandemic has been an eye-opener.

    Of course it depends on your hobbies and interests, but you really don’t need that much money. And now that many people can move because of zoom meetings and have more flexibility to balance their lives… Perhaps spend more time in nature instead of spending money on an expensive house, expensive car, expensive lattes, latest iCrap, etc.

    The areas Wolf mentions (Sierra Nevada, Yosemite, Mr Whitney, Tahoe area etc) are fantastically beautiful. I spent 5 months hiking the Pacific Crest Trail, which also passes through there. Camping in the wild all the way from Mexico to Canada. I spent only $2235 in total doing this (excluding the international flights). So little money for the experience of a lifetime!

    • Todd says:

      And YuShan, people often have children, which means getting the hell out of DodgeFrancisco. It’s the worst place in America to raise children or send them to schools, either hideously expensive private, or public, laboratories for failed identity politic experiments, an ugly future for the ever shrinking number of white lab rats that still remain.

      Quality of life and “interests”, like living with one’s own people in relative safety, exercising your cultural preferences, rather than fending off human tumbleweeds in S.F., not forcing your dog to avoid human feces and living around an outdoor lunatic asylum?

      • cas127 says:

        Amazing how the places run by people most viciously proclaiming their desire to improve humanity are the first and most thorough in driving people away.

        • GirlInOC says:

          And yet the only thing *really* driving people away is that after decades of people & businesses moving to these areas, cost of living has become ludicrous. If compassion for priced-out poor people “drive” people away, so be it.

      • w says:

        Well-put and spot-on! :-) Could not pay me enough to live in sf these days.Have visited several times beginning in ’90’s and lived on the border of MountainView/Palo Alto.Went to the San Jose museum of science or whatever,very nice.Cannot even Safely go to a freaking Walgreens in s.f. Anymore because thugs think they are entitled to clear the shelves sans payment.Everyone else is supposed to pay,not them!Homeschooled the kids.There was a developed h.school network out there years ago,probably even more developed and diverse now.ca is looneycentral,no thanks!! :-)

    • fajensen says:

      I just checked the job adds for my old hometown, out in the ‘boonies’, relatively speaking. About half of those are ‘Working From Home’ jobs.

  4. Anthony says:

    Once upon a time in a far off land…people were smart and spread good news and were happy with the great times they lived in…

  5. timbers says:

    “But people have other reasons to move… a passion. Once you no longer have to show up at the office except occasionally, why not move to where you really want to move to, even if it doesn’t save a lot of money, or any money.”

    I moved to Boston’s South End early nineties. The area was famously gay and used to “dump” social services projects for the peasantry that the VIP in Back Bay and Beacon Hill would never allow. Real Estate was cheap and being acquired quickly and improved. Easy walking distance to just about anywhere in Boston including North End (millions of Italian restaurants). You could walk down streets and be bombarded with a people of all walks of life and every social strata. Street people. Drug addicts. Drag Queens. Middle class. Everything mixed in. Coffee shops to hang out in forever, sex stores, booze stores, video rental stores, ethnic grocery stores where everywhere. It was easy to meet people in fact if you had a boyfriend you schooled up on how NOT to appear to be look available looking for new dates, it was so easy to connect with someone.

    Today, the same area is a totally a total 100% bore. Everyone is rich upper class overly dressed and unapproachable. Vastly overpriced fancy wine shops. Shops are insanely over priced. The undesirables have disappeared mostly.

    I get nostalgia for that time often when I watch an 80’s movie. Big hair, every time the hero parks his car there’s abundant parking right in front of the building he’s going to next to the front door, hard partying parties, people close and partying and talking w/o masks. Throw in NY scenes with the twin towers and lots memories of times are gone forever.

    “Come Senators Congressmen please head the call. Don’t stand in the doorways don’t block up the halls. Could be he who gets hurt is he has stalled. Your old world is rapidly changing. It will strike at your windows and rattle your walls for the time they are a changing.”

    Bob Dylan

    • And aren’t you a fellow Portlander? I’ve seen it happen in SLC, Seattle, PDX… All amazing fun in the day, now all retirement homes. But don’t worry, with all the wealthy and comfortable moving to the burbs maybe cities can be desolate and colorful and lawless and alive again. PDX is a complete dystopian sh!thole lately, but wildfires being wild flowers. The people that suffer the lawlessness deserve the liveliness. The well-to-do will be back when the poor once again show them how to live.

      • Todd says:

        “Street people. Drug addicts. Drag Queens. Everything mixed in. Coffee shops to hang out in forever, sex stores, booze stores, video rental stores, ethnic grocery stores” If you miss that scene, and want to add the spice of Honduran drug dealers, street gang activity, thousands of diverse! human zombies and a failed city government, that funds the promotion of the same, I strongly suggest San Francisco, specifically the Tenderloin. You’ll love it!

    • Mark says:

      “Money doesn’t talk – it swears
      Propaganda all is phony ”

      Bob Dylan

    • Lisa says:

      We live in a virtual world now.

    • SuzeB says:

      Agree with you timbers, after becoming super high end, the South End lost its character and soul. A lifelong MA resident, after college I moved to the Fenway in Boston in 1984, another once funky neighborhood with cool restaurants, rock clubs, band rehearsal spaces, vintage clothing stores, students, musicians/artists, and whacky characters. I used to park in a school parking lot near my building, never got a ticket, no one cared. Parking was easier, you could find streets with no meters. Meters went until 6:00PM, now it’s 8:00PM with kiosks/credit cards so you can’t drive into a spot that still had 40 minutes left on the meter. Some learned the trick of putting the pop top from a soda can instead of a quarter to temporarily break the meter, thus being able to park for hours. Ah, the good old days.

      In my youth I was in a band that rehearsed in the heart of Kenmore Square. After band practice, we’d amble over to the Rat, a tiny hole of a rock club, now gone 20+ years, where up and coming bands like the Police, the Ramones, Talking Heads and R.E.M. played. A musician friend who still lives in the once low rise Fenway says “now it looks like Manhattan”. Gleaming, high-rise buildings with luxury condos and chain restaurants/stores line Boylston St.

      I moved to Allston “Rock City” in the late 80’s, a melting pot, funky neighborhood with all walks of life. With two roommates my rent was a whopping $60, went up to $100 after 2 years. Yeah, our place was considered dumpy but I was able to save a ton of $$$. My friends in the banking/R.E biz don’t have to tell me that Allston at least pre-pandemic, was undergoing rapid gentrification. The hipster vintage shops have closed their doors, one moved out to Roslindale.

      Another once considered undesirable neighborhood that artists claimed in the 80’s was the Seaport district where The Channel rock club was. After rapid gentrification, some artists were able to stay but many were forced to leave, relocating to much more affordable lofts in Lowell or Providence, RI.

      I too have love and nostalgia for the 80’s, feel lucky to have lived in Boston as a 20-something. It was certainly easier to find affordable housing. The 80’s was an exciting time to be a young musician in Boston.

      • James Levy says:

        As a contingent worker (an adjunct Prof) married to a high school teacher who has had her full-time job reduced to a part-time job (maybe back to full time next year, maybe) I tend to view all this rather differently. The growth in both the overall population and in intergenerational wealth (which gives those 20-somethings the money to gentrify all those neighborhoods) you now have about 30 million people in this country who are doing really well. Problem is, you have 100 million people who are doing really badly. They are not worrying about moving to the Sierra Nevada foothills so they can enjoy working from home. They are worried about having a home. They are not going to deliver packages, care for old people, clean the office, or wait your table from home. They are trying to survive in the interstices of a system that is built by and for those 30 millions. I’m not talking about the 50 million at the bottom, or the 150 million treading water–they have their own issues to deal with. What worries me are a class of hard working people who are not getting by. Our political and social structures are not designed to deal with such a population.

        • David Hall says:

          Google/Alphabet in Mountain View, CA plans to return workers to their offices in September. They may be required to work in the office at least three days a week.

        • John says:

          Some solid and profound statements made there. Sooner or later there’ll be a combined class/generational clash. A charismatic and persuasive leader with a new political party will advocate new laws in favour of the not wealthy. Guess where the majority of votes will be!

        • cas127 says:

          “What worries me are a class of hard working people who are not getting by.”

          By and large, as the work spreads out, it is spreading to less expensive places, making it easier to get by.

          Things were worse when the better jobs (and jobs dependent on those jobs) were hopelessly concentrated in 5 to 10 ultra expensive metros.

        • Rcohn says:

          Brought to you by government policies.
          Those policies have created the greatest wealth disparity in the history of the country.
          And it has destroyed the middle class

      • matt says:

        Add to all of that, if you wanted to go to a Red Sox game, you just walked up to the ticket window right before the game and bought a ticket. Good seats for less than $10 and bleachers for like $3. Pretzel and a Coke or a dog and a Coke was another $3. And the Sox were quite good in the late 80s/early 90s, better than the Yankees most years.

      • Todd says:

        “the trick of putting the pop top from a soda can instead of a quarter to temporarily break meter,”

        Jam a coffee stirrer stick into credit card slot of parking kiosk, break it off, same effect. A blob of McDonalds fake honey on tip even better.
        Make sure to carry crayon to label it as “broken”.

      • Lynn says:

        I loved the Rat back then.

        • Implicit says:

          My bachelor’s party was at the Rat. At the time, my brother best man was a project manager for the one arm bandit” John Silber president of B.U. near Kenmore Square

      • NoPrep says:

        The Channel, Face to Face, Laurie Sargent! She commanded that stage. Laurie is now a farmer in Oregon but also carries on with her art. I remember all that, although my 20s until the last couple when my little personal storm cleared up. were a mostly unhappy time for me. I was far from a musician.

        San Frans legendary Flipper touched base at the Rat, just before Will Shatter died. My great life regret is missing that show (I was really really ill, just couldn’t make it out the door that far). Genius band..no Flipper, no Nirvana.

        Nowadays I may not have a scene but at long last I cracked the good music code, and do write and sing my own survivor songs.

    • rhodium says:

      Reminds me of when I went to Carmel-by-the-sea as a kid and I remember there being candy shops and ice cream shops, and there were normal families there to enjoy the beach. I went to visit my brother a few years back when he was unlucky enough to be working in SF at the time, and I was dismayed when we stopped by and saw that the place is now all high-end boutique clothing shops, fancy restaurants, and real estate companies. Mostly I saw an awful lot of what looked like rich retirees milling around. Not that this should shock anyone, because everyone knows about the whole thing over there. The rich just have a real way of kicking people out of nice places.

      I have a friend who with his wife was trying to buy his first house. This was in longmont co. They had it for $350k, and this would not have been a nice house mind you. What happened was illegal I think because he claimed they had it under contract, but a buyer from California swooped in and offered $500k in cash. The owner threw a fit and tried everything possible to screw my buddy out of the contract. Perhaps bribes were paid to the bank, he was trying to research the legality of it, but some sketchy stuff went down and he ultimately decided not to fight it and backed down. I don’t know where all these people get all of this money from but they’re like vultures descending all over the country now. Boulder is next door. It used to be affordable for hippies and had a cool culture, but with the cost of living, I’m pretty sure most of the hippies now are just homeless people. Unless bong smoking college students count.

      • James Levy says:

        I live in Berkshire County, Massachusetts. It’s a rather rural area with only a few towns that most people in the Northeast would recognize as such. Lots of forests, some farms, and a mix of locals (people who live here year-round) and summer homes. In the 1950s and 60s a whole host of little developments grew up in this area, cabins owned by professional (largely Jewish) people from NYC and environs. Doctors, lawyers, NYC school teacher couples, college professors–those type of people. The parents had a bedroom, the kids slept in the living room, and it was all very rustic. Today, those cabins are largely owned by poor local people, and have been replaced by fewer huge summer homes. The class of people who could afford a little place in the country has shrunk, and the class of people who can build big summer homes has grown. It’s the change in the structure of those in the 20% below the obviously rich that has morphed over time, and that has changed how out-of-the-way places look and function. In the 1970s a trip to the local place for burgers, fries, and ice cream was just fine. Now, the summer people demand proper-fine restaurants, and the locals are having trouble keeping even a few of the old joints alive.

      • Lisa_Hooker says:

        The money comes from Congress telling the Treasury to create bills/notes/bonds that are “purchased” indirectly by the Federal Reserve Bank that “prints” bookkeeping entries or currency. Or from the Tooth Fairy, your choice.

        • w says:

          But what of the unnecessary tax cuts for millionaires and billionaires?Insane that Bezos gets Huge tax incentives to build another warwhouse of slavery where ex-F.B.I spy on union organizing activists.Whatever happened with FoxCON in WI?Chinese owners got u.s. Tax$,Americans were abused by eminent domain,other bad things,and no thriving factory?Thanks Walker!

      • MiTurn says:

        “real estate companies”

        Avoid any attractive small town that you’re considering moving to when the majority of storefronts are real estate companies.

        You’re already too late…

        • Tony says:

          Majority storefronts as real estate companies? Sounds like here in Northern Michigan, like in Petoskey and Harbor Springs..

        • Happy1 says:

          All the mountain ski towns in CO

      • NBay says:

        “Hippies”

        Was south of Carmel at Nepenthe, maybe ’71-72. Just me, my Army pal, and the bartender sitting outside watching Big Sur burn.

        Only 10 yrs later, ’82-3 or so, took a rich girl from LA down Hwy 1 in her BMW to see her brother in Malibu. She was “totally” impressed, and wanted to stay there for hrs, and I wanted the hell out…maybe 50-70 people there. She said, “You just don’t know how to hang out”, as we left. (it does have one super view, but everything down that way does)

        That Carmel (yeah, we ate at the stupid Clint Eastwood’s place….the whole trip was on her dime) story told, seems like people who think most all good things come with having lot’s of money to pay for them, are searching for something they will never find, but they do often trash things for folks that mostly just enjoy what we can do with our bodies, especially if we work hard at it.

        Too stuck in their minds, I guess, in which lives this ever sicker culture.

        Us ’66-’67 Haight St hippies tried to tell you it was a dead end….and even Carter did, but nobody listened….probably too damn late now, but the Green New Industry and Conservation Program is sure a worthwhile TRY. There’s always hope, but we gotta change…big time.

        • polecat says:

          Unfortunately, those Green New, uh … ‘Industries’… will wash $$$ greengold All Over the Realm, just not to Your’s or My little part of it.

          But for the likes of Nancy, Mitch, and the Gangbangin CON$, it will be Outstanding!

    • SocalJim says:

      Except, people want out of the North End, the South End, the Back Bay, and all the rest. The big money from Boston is buying everything in Weston, Wellesley, Dover, … . City life is dead for a while.

    • Implicit says:

      Yep, change is the only constant. Southy, Charlestown, Somerville all have transformed. Somerville is now pretty hip the way the South end use to be.
      Whitey was in Southy, The Winter Hill Gang was in Somerville, and everyone was a bank robber in Charlestown haha

  6. BuySome says:

    Conversation overheard in a junk yard…”Yeah, I’ve had some close ones, but it’s a lot worse when you take someone with you. I guess the worst one was back in ’55. Eight kids riding on the same overvalued stock. They brought out cameras to record the wreck and still show scenes of the carnage in high school business classes.” The ability to Work Outta Wonderland is largely dependent upon those companies to be able to survive the long haul in a world that ultimately demands profitability be proved, or else. All that passes for business currently is a fallacy. Close up on ear in field.

  7. tom17 says:

    Long articles, graphs, charts, and numbers.

    The answer I get from my clients is simple……Freedom.

    Great for my business, bad for our Country.

    • James Levy says:

      How bad? Not a rhetorical question–I am really unclear about the answer.

      • Tom15 says:

        Because they find it easier to leave than get involved and try to make change.

        It is more difficult in a world of the digital wild west. The Hang em high if they stray from the herd.

      • Fat Chewer. says:

        Freedom is bullshit as the last 30 years have proved. Freedom allows the unwashed masses to have fun and we can’t have that can we? Better to buy them out with free money and turn those once cool and thriving neighborhoods into sterile aged care facilities for juicing retirees.

    • Kurtismayfield says:

      So freedom only if you have enough money. Sounds vaguely dystopian.

      • tom15 says:

        Money is not fleeing to my surrounds.

        Then again, maybe the they believe the double wide is safer than the mansion.

  8. Xavier Caveat says:

    There aren’t all that many homeless in the foothills & higher climes of the Sierra Nevada, another reason for weary bay area folks to vamoose.

    • NBay says:

      Not completely weather related. It all has to do with how big of a police force a rich community can afford. Sedona, Hilton Head, Beach Mountain, etc, are good examples. A homeless person would be whisked out of there before they knew what happened, same with Tahoe and any of those wealthy foothills places.

      • Wolf Richter says:

        Nbay,

        I think the first onset of winter in late September early October will whisk out the homeless from Tahoe more effectively than any police force could.

        • w says:

          Plenty of homeless in Chicago and growing due to Insane rents.Pretty darn cold and windy 6+ months of the year.If wealthy do not like homeless maybe they should help the situation instead of escaping to gated communities,mcmansions,palacial ranching estates out west,or their yachts.Instead of fake,p.r.-types of charities pr foundations,they could actually work in tandem with affordable housing and antihomeless groups.Aloy of research exists pointing to societal/individual causes and alot of data proves what universally and geolocale-specificly works.People do transition out of homelessness.Eviction and untreated health issues are Big reasons for unstable housing.Many addicts Want to get better,but accessing appropriate treatment while getting social supports is Still a problem.Many homeless are actually vets,also! :-)

  9. Anon1970 says:

    In at least one case that I am familiar with, a couple is moving from the East Bay suburbs where they have been renters, to North Carolina, where they will be able to afford a nice house. Their employer has a major facility in NC and they will be able to communicate with the home office via zoom calls.

  10. Anyone moving to Paradise?

    • Boomer says:

      Good point Ambrose. Better pay cash for that cozy bungalow in the Sierra Nevada. Fire insurance extremely expensive if you can get it at all. It’s getting crowded in the Sierras along the I80 & 50 corridors. Traffic is a nightmare with no transit alternatives. So is the trip to Costco. Air quality is horrendous in the summer as the Valley smog pushes into the Foothills.

      As far as California as a whole goes SiliconValley.com report citing UCLA Anderson study.

      California job market rebound will outpace U.S. recovery in 2021: forecast. UCLA Anderson Forecast doubts existence of Bay Area exodus

      • Boomer II says:

        With its overextended shutdown, CA outpaced the US in job losses in 2020. A faster recovery should be expected, but not assured. Net loss of many high earners.

      • Seneca's cliff says:

        My sister lives in Healdsburg in Sonoma County California and her husband is a commercial insurance agent. They have several friends who live on small acreage properties in the hills surrounding the town and several of them have come to her husband begging him to help them get insurance coverage because they have been dropped by their carriers. According to him no coverage of any kind is available for them at this time due to fire risk. They are now facing the fact that their expensive wine country properties have been crushed in value and useability.

    • flashlight joe says:

      “Anyone moving to Paradise?”

      Mr. Peabody’s coal train’s done hauled it away. – John Prine, Paradise

    • w says:

      Exactly!First thing I thought of when reading the article.Lived in Vegas for many years and talked to many who used to live in CA during the ’90’s,and surprise,Wildfires and earthquakes,power outtages,mudslides.Current drought conditions=disaster witing to happen,just one doened powerline from wind,one careless smoker/camper,one arsonist means new ca transplants are isolated in a very hilly,geographicly isolating area waiting for firetrucks,earthquake help,mudslide rescue,etc.Icy roads in the higher elevations=dangerous impasses=trucking accidents=backlog in getting food,bottled water,whatever!

  11. Petunia says:

    Unlike RE that is owned and may appreciate over time, rentals don’t accrue value to renters. If the jobs aren’t there, the workers will not hold on to the space. Expect rents to track the work locations. Some things are really simple.

  12. FinePrintGuy says:

    The dating pool is probably fine in Sacramento, but forget about it elsewhere. Single people will be moving back to SF “at some point”.

  13. Stan Sexton says:

    In 2013, after the Crash, Carson City was about the only city in Nevada that had not increased in value during the early 2000’s. It was a bargain. Now with the EXODUS, the home prices are comparable to Southern California. Ex-Bay Area and and Los Angelenos have found a place with plenty of water, a lower cost of living and no income tax. The Exiles are commuting to Sacramento and the Bay Area. Builders can’t build enough houses and newcomers fight for available homes. It’s like Calif was in the 50’s and 60’s. I sold a house for a retired schoolteacher in San Diego and he gave up looking for a house and rented an apartment. Crazy.

  14. FinePrintGuy says:

    Single people are also moving back to their hometowns and in with their parents. The pandemic and work from home is perfect cover for not looking like a total loser. Plus it’s less lonely for all. And when they move back to SF they’ll be in much better financial positions for it.

    • w says:

      Saving $ while ensuring the safety of your parents/g. Parents makes one a smart,decent human.The materialistic,self-centered types are the Losers.Look at world cultures spanning eons,do you see a prevalence of young adults moving far from family,moving in with strangers or living alone?Going back to the Historic pattern of family compounds,multifamily units dwelled in by Families,senior pods,casitas,family farms/ranches has been making a comeback for years in this country as a response to studentloan debt,rent insanity,housing bubble requiring bigger down payment,lack of affordable senior care which is Trustworthy,and many other factors like divorce.Just moved out of childhood home where I cared for both parents and stroke victim brother as well as several cats and two sons.I am not alone.Many in the old neighborhood did likewise.Multigen household.

  15. Tankster says:

    Even my little pieces of paradise, Dunedin, FL (probably NZ too), Amelia Island and Asheville, NC are getting too crowded, nobody goes there any more…

    • BuySome says:

      You always hear the bell tolling when someone starts to focus on “street improvements” for that which served as the local shortcuts for those in the know. Jam sandwich, it’s what’s for lunch.

      • Implicit says:

        “Imminent Domain” enacted for the second time in 10yrs. on the front of my home. This time it will go past a
        big stoned wall that has probably been here since the civil war. My son and I have been moving the ones that we can, making a stone garden. I understand that the town supposedly owns the wall already.
        Thank goodness the rebels set a good example by standing up to injustices by the English overlords.
        “Live free or die”

  16. Dave says:

    If it were me, I would negotiate a lease with capped rent increases on renewals in an urban location now, and enjoy cheap rent for years as rents return closer to pre-pandemic levels.

    • Boomer says:

      Isn’t San Francisco rent control about as restrictive as it gets? Why buy a million dollar plus home when you can lock in an a
      apartment for $2500-3k/month?

      • Wolf Richter says:

        Boomer,

        “Isn’t San Francisco rent control about as restrictive as it gets?”

        I think you confuse that with New York City’s rent control laws, which are very restrictive.

        In San Francisco, rent control is limited to older buildings (built before June 1979) and DOES ALLOW for annual rent increases that are a little higher than the national rate of inflation (CPI). And when the tenant moves out, the property goes back on the market at market rent.

        All buildings built since then are exempt from rent control. All condos and single-family houses are exempt from rent control.

        In these rent-controlled buildings, the allowable rent increase for 2020 was 1.8%. This occurred as market rents plunged 29%.

        There is a balance: once market rents fall enough, people in higher-priced rent-controlled apartments move to nicer digs. So the landlord of a rent-controlled building might not want to raise the rents – because this might trigger move-outs at a time of high vacancy rates and plunging rents.

        Many rent-controlled units are dumps. When they come on the market, they compete with brand-new units that are gorgeous. So the landlord ends up having to invest lots of money to bring the rent-controlled unit up to snuff. This takes many months in SF, where everything takes forever. And it costs a lot of money. So the landlord faces many months of no rent, plus tens of thousands of dollars in investment to get the upgrades done — as opposed to just collecting rent. Bu then the landlord gets to rent out the unit at market rent.

        Rent-controlled units have a lot more stability. So in an environment like this, with a lot of churn and high vacancy rates, rent-controlled buildings don’t have above normal vacancy rates and they don’t see much churn. The high vacancy rates are in newer buildings without rent control. Rent control can be a benefit for landlords in times like these.

        • Boomer says:

          Interesting! Thanks for the explanation. As usual great reporting.

          The City will always be a special place warts and all. It’s survived earthquakes, fires, plagues, labor wars, Social movements and so forth. Some of those Social issues like homelessness are are a national disgrace beyond the scope of local solutions.

      • Dan Romig says:

        In 1984, Minnesota passed a law that prohibits local governments from adopting rent control ordinances unless approved by 51% of voters in a general election.

        So, to get around this state law, two charter amendments are now bouncing around the Minneapolis Charter Commission, which will then go before the City Council to put a referendum before voters that would “ask voters to cap rent hikes.”

        Mayor Frey came out against any rent control measures a few days ago. With a veto from the Mayor pending, if the council would pass either of the proposed amendments to put it before the voters on a referendum, it would need 9 votes out of 13 on the Council to override the veto.

        The Mayor’s quote, “I do not support policy making, especially for complex initiatives like this one, through initiative and referendum.”

        City Council Chair Lisa Bender, “Given all of the other things that we have in place for housing policies now I think the rent stabilization policy (call it what is is Lisa – rent control) makes a lot of sense as part of that whole package of policies.”

        Needless to say, my city has seen some weird stuff go down lately; a referendum for rent control on next November’s ballot seems like par for the course. We’ll see how this play out.

        • Petunia says:

          I’ll bet it will pass in a NY minute considering what’s going on in your neck of the woods. I’ve been expecting this since the GFC, especially in the high rent areas.

  17. Paulo says:

    People are really really fortunate to be able to choose where they live, and still have employment.

    I did it backwards. I chose where/how I wanted to live, and then picked the employment path to suit. Luckily, both worked out well. I could live anywhere and work anywhere. (All right then). Did several careers the same way and retired early to a place of our dreams. And yes, I did read Thoreau in Mrs. Hopes English 12 Lit class.

    “The mass of men live lives of quiet desperation”

    I did not want that life.

    People who leap into a career without deciding FIRST, where it allows them to live and how they can live, sometimes/often live lives they did not wish to have, or never thought they would have to compromise around. And when folks can take the office job home, to anywhere….why good on them and lucky you. There was a pandemic silver lining for a few. On a beautiful spring day, who in their right mind would want to spend any time in an office cubicle or in front of a screen?

    There are occupations where people have more choice. Medical, teaching, trades, to name a few. I’m sure the list is long. But there are also occupations that turn in to handcuffs, sometimes golden handcuffs, but limiting, nonetheless. This is why on WS I always preach about having no debt. Debt is sneaky. It appears to offer choice, at first, but often turns into a prison of obligation.

    Good news article. I am sure there will be many many who choose to move back to the city over time. It might be a rosy outlook, indeed.

    • MiTurn says:

      ” I chose where/how I wanted to live, and then picked the employment path to suit.”

      Ditto, me too Paulo. But you gotta plan carefully! And jobs where you live can be changed, but not the allure of why you live where you live.

      Best decision I ever made, for me and my family.

    • Lisa says:

      This sounds ridiculous. Chose how you want to spend your life so you can earn an income then choose where you live. You can’t eat the mountains. Sound sole you have led a privileged life

      • MiTurn says:

        Nope, I have not lived a privileged life. I’m sad to read your response. But I won’t bore you with the details…

      • John says:

        Lisa – strange, judgemental comments.

      • 91B20 1stCav (AUS) says:

        Lisa-you might consider that Paulo was, early on, willing to do the often constant/hard&demanding work(s) to achieve his vision for his future, accepted his luck as it came along, but never took any luck for granted (an allegory- the great U.S. 500GP champion Kenny Roberts once said: “…of course i’ve had a great deal of luck. But i also noticed the more i practiced, the luckier i got…”).

        My own position, at this later point of life, is similar to Paulo’s, and i’ve no way of knowing how it might differ had i had a clearer vision at an earlier age such as he. Nonetheless, it’s never too late as long as you’re willing to implement a clear strategy utilizing your own inimitable strengths and abilities, accepting that the path revealed may not resemble anything close to accepted norms.

        Best of roads going forward to you, and-

        may we all find a better day.

        • w says:

          Best laid plans of mice and men,the road kess travelled,and life gets in the way,and don’t forget….when opportunity knocks….Nobody plans to fail,they Fail to plan.Take your pick from amongst these gems of profound wisdom! :-)

        • 91B20 1stCav (AUS) says:

          w-reckon i deserved that.

          may we all find a better day.

  18. cb says:

    “Sacramento …….. about 90 minutes by car on a good day from San Francisco.”
    _________________________________
    On a good day, at the right time, under excellent conditions. At rush hour, I’ve spent an hour just getting across the Bay Bridge. (from Oakland into San Francisco, paying the toll)

    • Wolf Richter says:

      Yes, I once spent three hours trying to drive to Costco in San Francisco (maybe 3 miles) on a Saturday, and then after I didn’t make it, trying to drive back home. Some demonstration on Market Street cut the City in two and totally snarled traffic and nothing was going anywhere. I was a stressed-out wreck afterwards.

      On the other hand, when we drove to the Royal Gorge ski area a few weeks ago, we were skiing in three hours. All depends.

      I sure like it with less traffic and less congestion. Work from home is great for us.

      • Lisa_Hooker says:

        I remember driving from Roma Centro to the airport to catch a flight. Timing was tight. We were driving west to east when we ran up against the stream of marathon runners north to south. Twisty streets made for an interesting couple of hours. Had to dump the rental car and sprint.

        • Turtle says:

          What happened with the car? I mean, the rental company probably wanted it back.

        • Lisa_Hooker says:

          Dumped at arrivals. Told the gate to tell the rental company. Surcharge, but made the plane.

      • ft says:

        One weekend afternoon in the spring of 1967, I entered what is now I880 at Hamilton Ave in San Jose, set the hand throttle in my old pickup for 57mph, and cruised all the way to my Ashby Ave exit in Berkeley without touching anything but the steering wheel. Times change.

        • Xavier Caveat says:

          I know somebody whose husband worked in Fullerton and they lived in Newport Beach, and it was a leisurely 30 minute commute circa 1960.

      • Todd says:

        Wolf, Go North to Costco in Novato. Half an hour from Marina District. And, you’ll be in Marvelous Marin, a clean, safe, high education, old fashioned, boring white county with every kind of natural attraction at your disposal to enjoy before you load up the car.

        • Lisa_Hooker says:

          And maximum trust funds per capita.

        • AM says:

          do you think it’s safe and boring for people of colour?
          did this discussion look like an invitation for casual racism?

        • Wolf Richter says:

          Todd,

          I’ve been most happily married for 20+ years to a woman of color whom I adore and treasure. Why would I want to shop in a “white county?” What kind of BS is this???

      • SaltyGolden says:

        Wolf,

        I remember a couple years back at the WolfStreet meetup in San Francisco folks were asking you questions and the topic of recessions came up. As I recall you responded with something like:

        “With most ‘normal’ recessions, if you’re unlucky things are really bad. But things aren’t so bad for most people, you just notice that there’s not as much traffic.”

        Turns out to have been prescient yet also an understatement.

        Thanks as always.

  19. Artem says:

    I hope this continues. The bay area is one enourmous traffic jam with potholes. The Southwest pilot wasn’t wrong.

  20. Heinz says:

    I still consider this pandemic-instigated WFA (Work from Anywhere) phenomenon as a transitory, not entirely permanent, employment paradigm.

    Many employees, to be sure, are enjoying amenities and freedoms of working in the mountains in your pajamas on more or less your own personal schedule. This is a pipe dream come true for 9-5 commuters.

    But WFA only works selectively for a subset of our workforce– rest of us have to get up early every morning, shower, shave, get dressed, and drive into work to perform tasks that can not be done comfortably on sofa in underwear.

    Also, for lucky tech and digital workers involved in this WFA experiment I’m certain there will be more blow back from employers who will demand concessions in pay for differential in cost of living involved in moving from, for example, West Coast cities to remote foothills and mountains. And there will be more strict accounting for WFA performance and productivity.

    • Micheal Engel says:

      WFA ==> soon unemployed

    • Bobber says:

      Many are living an even better dream – making hundreds of thousands or millions from Bitcoin, Tesla, Big Tech, etc. – and not having to work at all. This might not be so temporary. It depends on whether Congress comes to its senses and puts some restraints on the Federal Reserve.

  21. Lisa_Hooker says:

    An outside sales job is a WFA job.

    • Anthony A. says:

      They have always been that way. Nothing new.

      My oilfield project work was never WFA. It was always Work From Where It Is (WFWII). And that could be in the middle of no place. LOL

  22. Jdog says:

    Changing work schedules opens up possibilities that did not exist before.
    I was talking to a fireman who worked in Oakland, but lived out of State.
    His schedule was 6 days on and six days off, which made it possible to simply fly back and forth.

    • Depth Charge says:

      None of this is new at all, you must just be new to paying attention to it. 6 years ago somebody bought a neighboring 10 acre parcel – a wealthy techie couple from Seattle who decided that they wanted to get away 50 miles from the city core since they could work remotely most of the time. They lasted 2 years before they sold and moved back, essentially just waiting until they could bank the small gains without paying income tax.

      You can find stories 20 years ago of firefighters living out of the area then flying or driving long distances to go to work. There is nothing new under the sun. The media and all the chuckleheads are yammering on about new paradigms and trying to justify the demand when it’s 100% pure speculation, nothing more.

      • Heinz says:

        Flexible work schedules and some WFA have been around for decades since PCs and Internet came on scene, no doubt.

        What Wolf’s article touches on is the magnitude and broad scope of WFA since the pandemic. It is a game changer in many ways.

        But again— IMO over time the dust will settle and we will come to some marriage of a hybrid work in office/work remotely type solution for most of these digital workers. The office is not history by any stretch.

  23. Micheal Engel says:

    AAPL 1H, line chart, options :
    1) An inverse H+S.
    2) Schabacker bearish horn.

  24. Depth Charge says:

    The FED has absolutely destroyed the economy. Finished it off. They are a cancer upon society, and they show no signs of abating with a CONgress missing in action. I fear that a violent revolution is the only way out.

  25. SocalJim says:

    Based on recent real estate trends, Orange County and San Diego County are in big big demand. The demand is surging and mostly from the 30 to 45 year old demographic. And, they are in bidding wars on single family homes. They want backyards in zip codes where they can rely on the police. Just like the last generation.

    • Heinz says:

      Land rush mentality of clueless masses.

      Ouch! That is going to really hurt when reality rudely intervenes and market craters.

    • Socal Rhino says:

      Very little inventory in this very southern end of OC and people who do sell are getting rising prices, agree. At or above previous highs. Not in the business, just observing.

  26. Micheal Engel says:

    1) When SPX spitz was stuck in the sand, the Fed CHoCH pulled it out.
    SPX monthly, log, cloud :
    2) Take a line Feb 2018 low to Mar 2021 high.
    2) Take a parallel line from :
    3) Next stop : SPX hug this line.
    4) Further down the road the cloud spitz.
    5) On the right side : a seductive flatbed.
    6) To be cont…

  27. Yort says:

    About every financial article and analysis right now can be summed up by two words, “Peak Liquidity”…and nobody knows when we will hit the top and roll over, yet it is coming…

    I love Wolf and all charts, yet charts are tricky. Year-over-year charts say one thing, and yet pre-pandemic charts say quite another. I think that is why many “see” the economy is booming, and yet others “see” it tanking. Charts are like “studies” and “polling”, you can get giant variations depending on how the data is averaged over time and presented and compared to various time frames.

    Take for example Chase credit card spending, down -1.6% on March 22, 2021 on a “Pre-covid” trend basis, yet up 46.1% (exponential on chart) on a over year-ago trend basis,using 7-day averages.

    The JP Morgan 7-day average of Chase credit card spendingchart up to March 22, 2021 link below (per Carl Quintanilla on Twitter):

    https://pbs.twimg.com/media/ExajY5eVoAAsVrU?format=jpg&name=medium

  28. Lynn says:

    @Wolf

    I was lurking on some financial forum trying to figure things out and came across someone mentioning that the big banks are all invested in large real estate acquiring REITs and other RE buying interests. They own stock and whatever other interests in those companies. That person on the forum mentioned they are actively encouraged by regulations and otherwise to do so.

    This seems like a huge conflict of interest and in effect, a major funnel to keep many houses off the market or out of the hands of home owners. Do you have any interest in exposing the hows and whys of this?

    • Wolf Richter says:

      Lynn,

      I’m not sure what the banks currently own in terms of actual real estate – rather than real estate loans.

      I do know that during the housing bust, they were not forced to sell the assets that they had taken possession of, and they were holding them in many cases for years and kept them off the market. The Fed also encouraged PE firms to buy up tens of thousands of these homes and rent them out. And those PE firms have now mostly spun off these entities as REITs (Blackstone’s Invitation Homes is the biggest one).

      Buying a house and renting it out: I have no problem with that. It remains in the housing stock. There is a lot of demand for rental houses. And building houses to rent them out (build-to-rent), which is hot right now, falls into that category. As long as a house is used as housing, it’s fine.

      But when a house gets bought by investors or banks and remains vacant, that is a real issue. And there is quite a bit of that going on now. These are investment properties that are supposed to rise in value. Offshore buyers are doing that too. No society can build enough houses to meet financialized investment demand from overseas.

      Another real issue is large-scale concentrated vacation rentals in touristy locations. That has a nasty impact on the neighborhood where they’re concentrated, on housing shortages, rents, and prices. A vacation rental here and there is fine, but these large-scale conversions to vacation rentals are very problematic – and many areas are now trying to curtail them.

      • Lynn says:

        “Buying a house and renting it out: I have no problem with that.”

        At face value I have no problem with that either- unless the housing stock is funneled into REITs by being kept off the market until the REITs are in a position to buy them like last time.

        And **most importantly**, the banks own stock in the companies which they sell the houses to. They have a vested interest in keeping those houses for those companies they own stock in. Possibly they also allow cheap loans to those companies in addition to any Fed or Gov loans available to them.

        Last time those foreclosures were not allowed to be sold except for all cash, in California at least. No loans were given out to normal live-in home owners on ANY foreclosures in our area. The ones who had the most cash were large corporations and large holders of private money. My late partner and I looked at a lot of nice houses that were going for $75K to $90K, but missed the window. Many of the homes were sold for less than asking- pennies on the dollar, bulk, to large companies. Some were sold before being listed on the market- which is, at face value, illegal. I’m sure some “legal” justification was invented..

        In 2012 big money swept in and bought all of them.

        I think the stage is being set for this again in the future.

        • Lynn says:

          The Fed may own many of these mortgages now, but it would work in the same way. Possibly even more slanted towards much bigger buying companies.

        • Lynn says:

          “No society can build enough houses to meet financialized investment demand from overseas.”

          And yes, that too. Thank you.

      • cb says:

        Wolf said: “No society can build enough houses to meet financialized investment demand from overseas.”
        ____________________________________

        No society should subject itself to providing any housing to meet financialized investment from overseas. It seems absurd that allow any non-citizens to buy real property, particularly housing.

        It is also a travesty that private equity (think Blackrock) was allowed, if not encouraged, to purchase large swaths of single family housing from the REO departments of banks …….. with easy money from the FED. Talk about the Cantillon effect burning the taxpayer and common citizen from both sides …………….

  29. SpencerG says:

    I would be surprised if all that many people are moving to ski resort communities. But rather the magnitude of the exodus compared to the limited stock of the available housing in those resort towns is what is causing the rise in rents.

    Or that would be my guess in any case. The older I get the more I am aware of the importance of the “marginal” shifts in supply and demand. But it is often very hard to quantify these shifts.

    To keep it simple as a thought experiment… going with the Pareto Principle (or the “80-20 Rule”) one can assume that 80% of apartment dwellers in San Francisco and Silicon Valley aren’t going anywhere at all… but the other 20% are what is causing the massive dropoff in rental prices.

    Similarly, even 20% of those who ARE leaving could cause the rental prices in a ski resort town to skyrocket.

    It is hard to know for sure of course without seeing the actual vacancy numbers. Nor does it tell us anything at all about what employers might do next. But using such a guideline might help understand the price movements better.

    • Xavier Caveat says:

      Ski towns often are quite boring places when there isn’t any snow, and typically priced up the wazoo in rent or purchase of an abode.

      There’s better choices out there~

      • Mora Aurora says:

        XC, Agreed.

        The interior BC ski town I have lived in for thirty-two years is a pleasantly boring place for me nine months of the year. The testament to that is the migration from town down to the valley lake cottages in the summer.

        Much of the ski hill’s (read shadow real estate / logging company, opening up ‘new terrain’) fancy, expensive condos / houses are located at the base and of course in a north face mountain shadow. Not only is this a dark place year round but there is no soul or community there, as old town is a few miles away (and in the sunshine). This is something out of town buyers, in their rush to be right near the lift lines, have mostly not figured out yet!

        Old town is tight with very little room to expand. Rent and housing prices have become out of reach for most and been compounded by recent exodus events. Service jobs go unfilled as renting a room in an old shack with shared mates and facilities is bumping up to $1,000 / month. As Wolf has alluded, automation of these seasonal service jobs seems inevitable.

        My neighbour’s house just listed for triple what they bought for ten years ago. Municipal taxes are on the same trajectory and I now liken them to what I paid in 90’s monthly mortgage payments. Real estate offices abound and the dreaded words ‘play’ or ‘playground’ are everywhere and are not referencing children’s space. Read them as in the headlines ‘work live and play in beautiful…’

        • Depth Charge says:

          You can thank central bankers and their asset price bubbles. Local governments love them, too, because they jack the taxes and give themselves bonuses and new buildings with expensive office equipment, perks, etc.

  30. Mark says:

    I’ve lived in a rent controlled apartment in San Francisco for the last 8 years and have just signed a new lease in a new rent controlled apartment. It’s a significant upgrade; a move to the top floor, it now has parking, it’s 25% larger, it’s fully upgraded and has southern facing windows. I got it all for the same price I’m currently paying.

    However, for rent controlled apartments the prices are all over the place.
    There are many landlords who are holding out and refusing to lower their asking prices, worried that they will get locked into a low price just before the market rebounds. They are betting that people will return very soon given the optimism and hope about the pandemic coming to end.
    Then there are those who have thrown in the towel and are just focussed on getting good tenants and the place off the market. I was lucky to find one of those, and that I fit the demographic of a stable tenant. The apartment above my current place has been languishing on the market for 4 months and it’s not much cheaper than what I’m currently paying.

    Purely anecdotal, so take with a pinch of salt, but the landlords I spoke to said that there are people who are returning but these are the young adults in their twenties who left the city to stay with their parents or friends. These are less desirable because their incomes are lower and they tend to party more, proving a headache for other tenants.
    However, those returning who are in their thirties and older, or young couples, are not as common, and these are the folks with the larger incomes and stable habits.

  31. 91B20 1stCav (AUS) says:

    ah, the good old days:

    “…the past is a different country, they do things differently there…”

    “…these ARE the good old days…”

    “…nobody goes there anymore, its too crowded…”

    may we all find a better present day.

  32. MonkeyBusiness says:

    Facebook will start bringing employees back to the office starting from May 10th. 10% capacity. Next Monday, Uber will be opening their new HQ at Mission Bay at 20% capacity.

    Honeymoon is ending. I wonder if people will start flooding back to the Bay Area later in the year.

    • Depth Charge says:

      Yep. The techies out roaming the lands in their expensive new RVs are about to get a rude awakening.

  33. ru82 says:

    Something i came across that was interesting. A home association in a nice neighborhood with a good walking distance school plans to raise the HOA fees only for the homes that are used for rentals.

  34. Jojo says:

    And how do the poor and lower middle class fare in all this? Very few can afford to move at all. The bulk of the people have next to no savings. You know, the bottom 50%. Most people don’t have office jobs. Most people can’t work from home. The media driven Bloomberg narrative is a lie.

    • Wolf Richter says:

      Jojo,

      Reality check. You need to understand: there are a lot of office workers among the lower 50%. They may not be high-level software engineers and executives, but they might have lower level coding jobs, they might be working in the payroll department or work with payables or receivables or deal with customers, and work with exporters and importers or whatever.

      In addition, “most” people don’t move. If 10% of the people leave a city in a year, that would be gigantically HUGE, and that’s not happening anywhere. Even if the net outflow (outflow minus inflow) is 5% of the population, it’s HUGE.

      And this: People in the lower 50% move too, for all kinds of reasons including because they might be able to save $1,500 a month on housing. Duh. I guarantee you that’s what is happening with moves from San Francisco to cities like Fresno and Sacramento.

      And young people move ALL THE TIME. They go where the jobs are or where their love is or where the most vibrant city is or whatever.

      And people don’t need “savings” to move. What kind of nonsense is this? People have credit cards with room on them. And they shoestring moves. That’s how that works.

    • w says:

      Best laid plans of mice and men,the road kess travelled,and life gets in the way,and don’t forget….when opportunity knocks….Nobody plans to fail,they Fail to plan.Take your pick from amongst these gems of profound wisdom! :-)

  35. makruger says:

    Due to the high cost of living in the USA, my retirement plan is basically to nice cozy location within an eastern European country. Granted knowing a little Russian will likely be helpful (Я немного говорю по-русскй), but that’s a small trade off for residing in an inexpensive and comparatively safer part of the world.

    • Xabier says:

      Many have often thought thus, but as the ancient saying has it:

      ‘You are fleeing Damascus to escape Death; when he is waiting for you in Samarkand.

      Fate is Fate: may yours be a good one!

  36. Kenny Logouts says:

    Well if SF was ‘full’ then no matter what the price, if lots of units are now empty and no one is moving into the area, one would assume prices will go lower… or the landlords will sell up/get out.

    Either way it’s going to get messy.

    I feel a 1929 event approaching.

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