
Single Family Homes in Santa Clara County: March 2018 Report - 11thEarlOfMar
http://scc.rereport.com/market_reports
======
subroutine
There must be a study out there demonstrating that people systematically
undervalue (or outright neglect) cost-of-living in a region when taking a job
offer. One of my friends graduated from my phd prog (uc san diego) a few
months ago and immediately took a job offer in SF. He said it was his best
offer by more than $20k/yr. Every time I've spoken with him since, he
complains about how expensive it is to live there and how much he pays for
rent for an apartment in Berkeley area. Though when I ask if he is considering
looking for a job elsewhere soon, he just says nah, the money is too good to
leave. The thing is, even knowing this, I can totally see myself in an
interview soon, somewhere in the valley, and getting an offer that makes me go
'well shit, how could i not afford a nice apartment on that salary'. How bad
is it guys? Could someone making $140k/yr ever expect to be a homeowner in
SF/SV?

~~~
monkeynotes
If you are being paid $20k a year more than elsewhere, after tax perhaps that
equates to ~12-16k a year. You'd therefore be able to afford between 1-1.5k a
month more in expenses than earning the comparable salary offered elsewhere.
I'd suggest that in SF that you maybe, just maybe break even (renting that
is), but more than likely you are worse off financially.

However, SF will more than likely be a better place for career growth and
opportunity. You shouldn't undervalue that, especially at the beginning of
your career.

As far as buying a house goes, depends on what kind of commute you can
tolerate and how much downpayment you have. I think you'd struggle to be
comfortable on anything less than $200k.

~~~
dsfyu404ed
>However, SF will more than likely be a better place for career growth and
opportunity. You shouldn't undervalue that, especially at the beginning of
your career.

Unless you plan to spend your entire career there having your the vast
majority professional network is a bad thing because it means it's much harder
to cut and run. If you don't cut and run you wind up with a wife, kids, a
stupidly overpriced house in the suburbs, etc.

~~~
monkeynotes
Every life is different, I have friends who had children in SF and left to
find good jobs and houses elsewhere, it's more than possible.

All I'd suggest is just going in with your eyes open, and your point is
definitely one worth considering when evaluating moving to SF.

------
biesnecker
So sales are up, and inventory is up, but days on the market is down sharply.
It seems reasonable that if houses are going faster then higher bids are being
made because you're not going to get a second chance.

Totally unrealistic, and somewhat antithetical to the whole idea of free
markets charging what consumers will bear, but this is where Vickrey auctions
would be amazing:
[https://en.wikipedia.org/wiki/Vickrey_auction](https://en.wikipedia.org/wiki/Vickrey_auction)

~~~
thiagoperes
This is how it's done in the Netherlands, actually.

~~~
EmielMols
This is factually incorrect. There are rules regarding the bidding process for
buying a property in the Netherlands (Amsterdam model, Haarlem model or closed
bidding with deadline), but none of them include a part where the second
highest price is used.

------
whowouldathunk
About the same here in Seattle. It makes saving for a down payment even more
depressing.

I don't understand who is able to buy these houses when my partner and I can't
as software engineer + physician assistant. Maybe it's just because we're not
willing to decrease or dip into our retirement savings and we have no help
from parents.

I just don't feel comfortable taking out a jumbo mortgage. Even though we
could make the numbers work, I'm not confident either of us won't burn out
from our stressful careers.

~~~
finaliteration
I live in Portland but I’m in the same boat you are. My wife and I make a
decent amount of money ($120k+) but a combination of student debt, crazy
housing prices, and lack of wealthy family members who can “gift” a down
payment leaves me fairly hopeless that we’ll ever be able to buy a house of
our own.

We’ve seriously considered moving to the Midwest or the South where houses are
affordable, but neither of our jobs allow fully remote work, very few cities
in those areas have any sort of tech presence, and we’d be leaving pretty much
every family member across the country.

------
aresant
Does anybody have an economist that they like who is writing intelligently
about housing pricing right now?

You see 27% in SV, and almost 20% in subs like Oakland and it's hard not to
remember the couple of years leading up to the 2007 crash when word on the
street was "buy now or you will never be able to afford"

I bought on that advice and took a 35% haircut in a good market a few years
later.

~~~
ebikelaw
The idea that housing always goes up in price is nonsense so you’d be right to
be skeptical of “get in now” urges. If anybody said that about stocks they’d
go to jail but for some reason we don’t regulate marketing if housing-as-
security the way we regulate actual securities.

The only reason housing prices are skyrocketing is because we’ve built a
protective legal regime around incumbent land owners. The market can’t
function so the price goes up. Just as an example I’d be very pleased to build
a small stack of flats on my Oakland property, say four units, but the law
doesn’t permit that. On my block there’s a 1938 building with 22 apartments on
the same sized lot as mine. So we used to allow it, and clearly it’s within
the character of the neighborhood, to borrow a phrase from the NIMBYs, but
we’ve just outlawed that kind of building.

As soon as the regulatory environment gets fixed, supply is going to explode
and prices will fall.

~~~
usaar333
But a lack of supply doesn't explain rents being comparatively flat over the
past 2 years.

The prices going up imply either:

1\. Market has strong belief that housing construction will stop in the future
(i..e regulatory environment actually worsens), leading to surge in rents.

2\. Irrationality.

~~~
ebikelaw
I think you’re drawing conclusions that might not be warranted by this data.
The rent survey is fundamentally different because it’s rents reported by
large apartment management firms, not all private leases. We don’t really know
what’s going on in the rent-a-house market. On the sales side the data is all
recorded sales, which are public records.

~~~
usaar333
Which rent survey are you referencing?

I'm going off [https://www.zillow.com/santa-clara-county-ca/home-
values/](https://www.zillow.com/santa-clara-county-ca/home-values/) which
AFAIK uses all rent postings.

FWIW, there's also intuition backing this. e.g. go to zillow and click on
units for rent in Cupertino. And be shocked that their estimated purchase
prices are ~40x yearly rent. (It's difficult for me to see how that just isn't
irrational pricing)

------
NotSammyHagar
As someone from Seattle, I can only say this makes me unhappy, because even
more people will want to move from SF to here. We have enough people here,
please consider moving to another fair city. :-) Our own media brags about how
we are the fastest rising city by price, yet quotes numbers smaller than this,
say 19% yoy as of January -
[http://seattlebubble.com/blog/](http://seattlebubble.com/blog/).

~~~
CabSauce
It's always interesting to me that a progressive city, like Seattle, has a
bunch of people who proudly push a protectionist/exclusion stance similar to
the anti-immigration stance on the far right.

~~~
dgzl
There comes a point where the system (Seattle) can't support additional
traffic (immigrants) without expanding. Expanding pushes out people lower on
the ladder, which is often people you could consider locals, which often
changes the underlying chemistry and vibe of the city.

I grew up in Oregon and most of my friends and family have a general
disinterest in people moving to the state, especially from California. A
neighboring town, often regarded as one of the better towns in the area, has
seen drastic immigration (mostly from California) in the past 50 years. On the
surface, you might not see much damage, and in fact you might see only
improvements. But when you look at the side effects, such as multi-
generational families getting kicked out due to excessively high taxes brought
by wealthy Californians, and general road traffic increasing in speed beyond
what locals want (Oregon doesn't have any speed limits above 65mph, AFAICR),
you see another story.

Immigration is great when it works out for you, and not so great when it
doesn't.

~~~
CabSauce
I completely understand that. However, the only solution to that problem is to
try to halt change and protect existing residents from outsiders. Not to
mention that existing property owners do really well when prices skyrocket.

Edit: I guess the broader question is to what degree do locals get to infringe
on the rights of outsiders to buy property?

------
usaar333
What I find amazing though is that rents have been flat for the last 2 years.

[https://www.zillow.com/santa-clara-county-ca/home-
values/](https://www.zillow.com/santa-clara-county-ca/home-values/)

And prices (relative to rents) have increased even more (>35% actually) if you
factor in tax code changes making home-owning comparatively more expensive.

Irrational market?

~~~
jseliger
SF has, finally, after decades of underbuilding, allowed some modest increase
in the supply of multi-family housing units:
[https://sf.curbed.com/2017/5/4/15543668/san-francisco-new-
ho...](https://sf.curbed.com/2017/5/4/15543668/san-francisco-new-home-
construction-population-2017). Oakland has done the same. The story above is
about single-family units, and there is effectively almost no undeveloped
space within commuting distance of SF / SV for additional single-family
housing units. SF and SV are likely substitutes for renters in the area.

Seattle has some similar problems: [https://jakeseliger.com/2015/09/24/do-
millennials-have-a-fut...](https://jakeseliger.com/2015/09/24/do-millennials-
have-a-future-in-seattle-do-millennials-have-a-future-in-any-superstar-cities)
although less severe; about 60% of Seattle is still zoned for single-family
housing alone: [https://www.thestranger.com/slog/2017/06/21/25230243/poll-
fi...](https://www.thestranger.com/slog/2017/06/21/25230243/poll-finds-nearly-
half-of-seattleites-support-changing-single-family-zoning), which exacerbates
its housing crisis.

~~~
seanmcdirmid
Seattle has made a lot of progress in the last 20 years. West Seattle for
example, has become pretty crowded with apartments, though, as with with the
rest of the city, they are concentrated along transit corridors (West Seattle
still chokes on traffic these days, unfortunately).

Rents are definitely weaker than they were a couple of years ago. Maybe no
reductions but definitely incentives and a freeze on increases.

------
RomanPushkin
We should build higher and increase the density of housing. Building dense
housing will also help end the housing shortage that raises rents and makes
people homeless. One of the roots of the housing shortage is in the zoning
laws that limit how much housing can be built on a plot of land. We can't make
housing inexpensive while keeping it low density.

------
hardtke
The odd thing about the current market, compared to the previous periods of
rapid appreciation in the Bay Area, is that few of the current owners seem to
be cashing out and leaving. This is causing the inventory issues.

~~~
matt_wulfeck
Prop 13 makes it really expensive to upgrade, so there’s also less mobility
from the “modest” range of homes (approximate $1m range imho).

~~~
SeeDave
From my understanding, it's not even a matter of upgrading. Two neighbors with
exactly identical homes, who have lived in the same city for 20 years,
wouldn't be able to sell their houses to one another (for a net gain of $0
each) without triggering a massive tax increase for both parties.

~~~
whb07
Theres a common real estate move where you can defer your taxes on a real
estate sale if you use the proceeds to buy a similar amount of property
(dollar amount) [0].

So as long as the proceeds from the sale go into a similar type of
property/business then you can defer taxes for a future date.

[0]:[https://www.irs.gov/newsroom/like-kind-exchanges-under-
irc-c...](https://www.irs.gov/newsroom/like-kind-exchanges-under-irc-code-
section-1031)

~~~
matt_wulfeck
The problem we’re describing is that their property taxes would increase
sinificanty, thousands of dollars a month.

~~~
whb07
Yes temporarily sure? But if you keep deferring can you really tell me what
the tax laws will be 50 years from now? I don't think in 2068 if you finally
decide to sell and cash out the IRS will come with a list " Well on 2030:
taxes were X%, again on 2035: taxes were Y%". They will just give you a bill
for the present day tax system

~~~
SeeDave
From my understanding, the issue is with the annual recurring property taxes
which have a capped annual increase per Proposition 13. Thus, the "taxable
value" of the homes pre-sale is a fraction of what it is post-sale, even after
swapping for an identical home. This is not an IRS issue, so much as a county
tax assessor issue.

------
kindatrue
You'll understand why this is once you watch this 36 second video clip of a
guy shouting he will devote his life to stopping 900 homes from being built
where an abandoned K-Mart and Circuit City now lay - and how he will succeed
just like he's done in the past.

[https://twitter.com/cafedujord/status/971633159669338113](https://twitter.com/cafedujord/status/971633159669338113)

~~~
pfarnsworth
You can’t just add homes and not worry about traffic. That only exacerbates
commute issues which is one of the reasons why houses so far away from
business centers get so expensive, because houses even further have
exponentially worse commutes.

Public transportation needs to be fixed first so that people from east bay and
beyond can get to the Silicon Valley and SF faster.

If I could live in Tracy and get to SF in 30 mins or even 45 mins, I would
move there in a heartbeat. But it takes 1.5-2hrs even with BART.

That will do more to lower house prices than cramming a small number of houses
or condos in an already crowded area.

~~~
ebikelaw
Paving over San Joaquin County with detached single family homes on quarter-
acre lots will never fix our housing problems and certainly runs against our
climate change goals. We have to build walkable neighborhoods a sensible
distance from job centers, along existing transit corridors.

~~~
pfarnsworth
lol With all these disparate opinions, the problem will never be solved.
People are going to have to agree on a sub-optimal but better plan otherwise
the status quo will continue to win. Keep in mind that the NIMBY powers that
be are a lot stronger, and as the house prices go up, every new home owner
becomes more and more disinclined to support new housing in the SF Bay Area.
The ONLY chance for lower house prices is better, more efficient public
transportation and moving people further away from their jobs.

------
zitterbewegung
I'm beginning to wonder if you could make an incubator that also has real
estate holdings where you sell and rent houses to people in Silicon Valley and
also fund startups. The houses that you have on hand or want to rent you would
provide for startups (basically dormitories). The houses in SV would be a
hedge on the Startups that you are funding because by bringing in jobs you
would also increase the housing prices.

~~~
mamon
So, you want to be like Erlich Bachman from "Silicon Valley" sitcom? :)

Once upon a time comedy was just for fun, now, if you are screenwriter for a
sitcom you have to be carefull because someone, somewhere will take your
foolish ideas seriously...

Honestly, we need more "Don't try this at home" warnings.

~~~
aaronblohowiak
There are several “hacker houses” on the peninsula already — that show is more
of a documentary than many people realize

------
dalbasal
I would like to see total mortgage debt and price side-by-side.

*I mean that, anyone know where to get this?

~~~
kaycebasques
Outstanding mortgage debt on 1 to 4 family residences:
[https://fred.stlouisfed.org/series/MDOTP1T4FR](https://fred.stlouisfed.org/series/MDOTP1T4FR)

------
matt_wulfeck
I was sure the market was going to crash when we bought our home, but external
and internal forces made us stop waiting and make the leap. At this point a
large correction in the market wouldn’t even put us below our purchase price.

~~~
speg
So when do you cash out and move to the Midwest?

~~~
jandrese
When they retire? People aren't moving to the Bay Area because they just love
sitting in traffic and overpaying for everything. It's where the jobs are.
Also, the schools are full of engineer kids.

------
jakobegger
In the comments here I read a lot about tech workers struggling with the cost
of living.

If it’s hard to make it work for someone with a 100k salary, I can’t imagine
what it must be like for people with “normal” salaries.

What about bus drivers and waiters and salespeople in stores? How do they make
it work?

I’m genuinely curious, I have no idea what living in the bay area is like.

------
fightorflight
Another good website to understand the bay area housing situation is Juliana
lee's website ([https://julianalee.com/](https://julianalee.com/)). I
regularly visited her site to understand pricing trends in different zip codes
and cities. For the record, I did not use her services.

------
artwr
It's not exactly year over year, it's compared to December 2017 which was the
previous high for median prices.

~~~
artwr
Nevermind, turns out I can't read straight.

------
11thEarlOfMar
Select 'Median Price' cell for details.

------
dfee
Where would I find this for other US cities?

~~~
mturmon
Start at [https://www.zillow.com/los-angeles-ca/home-
values/](https://www.zillow.com/los-angeles-ca/home-values/) and use various
zip code queries at the top bar. The year-by-year plot is at the bottom.

~~~
dfee
The analysis in the original link has much more data than a Zillow search.
I’ve actually never seen a realtor report with that much information.

~~~
teuobk
I'm not sure about a general source, but there's a real estate agency in
Summit County, Colorado that puts out similarly detailed reports for that
area:

[https://www.breckenridgeassociates.com/statistics.php](https://www.breckenridgeassociates.com/statistics.php)

Their reports show data going back to about 2000. It's interesting to see the
rise and fall of inventory levels, days-on-market, price per square foot,
etc., as the economy has gone up and down. They also break it down by housing
type, so you can, for example, see the changes in condo stats separately from
single-family home stats.

------
coffeeacc
What is a multiple family home?

~~~
DrScump
As opposed to condominiums, townhomes, duplexes, etc.

~~~
coffeeacc
House?

