patrick.net

I've said a few times here:

Silicon Valley is the next Detroit.

Detroit used to be a prosperous, beautiful city when the United States was #1 in the world for auto manufacturing. When they lost that, the city went quickly.

Google, Facebook, Twitter - they have all betrayed the country by engaging in partisan political censorship - the very thing the Internet was created to obliterate. They hamper communication, they don't foster it. The incite disagreement and animosity. The openly work with the intelligence agencies, they spy on communication, they actively try to chill political conversation where people are trying to find solutions to problems or expose corruption.

Silicon Valley was once the place that was creating all this technology to allow people to do business more freely, to talk more freely, to learn without restriction. Now they are working against those goals, and with that, technological innovation will move elsewhere. Engineers are fed up with this BS - and living in a $1.2 million dollar hovel in nice whether doesn't really make up for being miserable at your job working as an establishment stooge.

I think we are seeing just the start of the decline of this area.

You can buy a very nice (although in need of repair) house for $20,000 in Detroit. Not in a great neighborhood of course, but that's the future of Sunnyvale, Santa Clara, Redwood City, San Jose, certainly San Francisco and there aren't many really nice homes here. They remind me of the cheap homes that were manufactured in the 1950's after WWII in LA.

I think you pipedreaming @richwiks. I dont like overinflated prices in Silicon valley (im renting) but imho the reason why Detroit collapsed is different then just cars boom over. In SV we had already few boom/bust cycles and its still alive and kicking. You have few major Universities around together with pleasant weather and it will keep on attracting workforce here and as result business.

Silicon Valley will never be a wasteland, but if companies en masse adopt flexible and real work-from-home policies, many people will move out to less costly areas of the country where even a reduced salary will get one far more than they can get here.

From SV Business Journal:
Crunchbase reports that as of Dec. 9, Bay Area startups had attracted about $45.9 billion in new funding this year – down from a record $63.6 billion last year. The region pulled in 44 percent of all such funding in the country, down from 49 percent in 2018.
That means, at it's peak, venture capital was injecting almost $9,000/year for every man, women and child in the Bay Area. How much of that found its way into residential real estate?
How much excess cash do the Saudi's have these days to invest? SoftBankaggedon is coming...

exfatguy says

Silicon Valley will never be a wasteland, but if companies en masse adopt flexible and real work-from-home policies, many people will move out to less costly areas of the country where even a reduced salary will get one far more than they can get here.

That is what is driving this. Software developers are working from home, and that’s likely to continue into the future. Indeed the trend may be very sharp, and working at a startup office may be a thing of the past. Why rent expensive office space when you can just pay developers to work from home? Indeed, you can pay them less money to do so as it’s more attractive to them.

And if you’re a developer, why take a job in San Francisco, paying thousands in rent, dodging homeless poop, and never being able to own a home, when you could take a work from home job paying 80% of that and live anywhere you want to live?
No brainer.
Rents will continue to decline in these over priced areas as the tech jobs relocate to be online and the tech workers relocate to live in more salubrious locations.

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covid_shmovid says

Rents for a one-bedroom apartment dropped most in the cities richest in high-paying tech jobs, falling 9.2% in San Francisco compared with May of 2019.

The solution for expensive real estate is high prices. The solution for cheap real estate is low prices. The market is always in a constant state of flux seeking equilibrium.

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Minime says

I think you pipedreaming @richwiks. I dont like overinflated prices in Silicon valley (im renting) but imho the reason why Detroit collapsed is different then just cars boom over. In SV we had already few boom/bust cycles and its still alive and kicking. You have few major Universities around together with pleasant weather and it will keep on attracting workforce here and as result business

Yes, it has to be an "attractive" place to live. I agree that the San Fran Bay Area offers that with the weather, scenic geography, culture, higher education, and jobs. If anything, there will be a major correction but it won't drive down prices more than 40% from its most recent all time high. Maybe the home price to income ratio will drop to around 5 for the San Fran Bay Area.


"In the San Jose metro area, which includes Santa Clara and San Benito counties, buyers would need to make $254,836 to buy a house, according to HSH. That’s based on a median home price of $1.25 million, and monthly payments of $5,946 for a 30-year fixed-rate mortgage."

"But the median household income in Santa Clara County was $106,761 in 2017, according to the latest Census data available. In San Benito County, it was $80,760."

The Looters are Saints! They are burning down apartment blocs in order to stabilize and increase rents, just as the Founding Fathers intended!

Shaman says

And if you’re a developer, why take a job in San Francisco, paying thousands in rent, dodging homeless poop

My niece, a CSE graduate from a public university in the Philippines and resident of Mindanao, is a developer on a team for an outsourcing company.
100% of their clients are California based companies, mostly in the Bay Area. Her team knows all the same coding stuff as the Hipsters in the Bay Area. Because you don't need a lot of infrastructure to learn software. A couple of years ago she told me that her salary was about $200 per month.

ad says

Yes, it has to be an "attractive" place to live. I agree that the San Fran Bay Area offers that with the weather, scenic geography, culture, higher education, and jobs

K-12 Education is more important than higher ed. Kids often go out of state to school; K-12 kids can't go out of the area. Also Crime, Traffic, and Human Waste is a factor.

Thank you for posting the article.

Rents falling that much must have an impact on housing prices, albeit delayed.

Anytime rents drop that much, it means some fraction of rental investments no longer make sense. The higher the rental price drop, the more rental properties that can’t show ROI.

And that means that some will need to be sold.

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B.A.C.A.H. says

Her team knows all the same coding stuff as the Hipsters in the Bay Area. Because you don't need a lot of infrastructure to learn software. A couple of years ago she told me that her salary was about $200 per month.

My dream is to see all those white liberal hipsters displaced by those like your niece.

I just heard those hipsters working at Facebook threatened a walkout if Facebook did not start censoring Trump.

Nothing would be more gratifying seeing these white liberal hipsters get their walking papers and their jobs outsourced to foreign workers.

It would be ironic because they support globalism and would finally be affected by the Democrat Party policies they support.

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Nice!

A bit of Charlie's Helter Skelter re-visiting the Hollywood Hills would help at this point too. If Barbara Streisand had her head lopped off with a machete by one of her ghetto pets, maybe it would wake up some of the so called woke limousine liberals. I wouldn't count on it, though, they are too deep in trance at this point.