Why is the SF housing market "positive?"


It's been a long, long time since anyone said that traffic is terrific. When there are too many cars on the road, it's considered bad, not healthy -- even if the boom in single-occupant auto travel is a sign of a recovering economy and lots of job creation.

So why do newspaper reports still talk about a "positive market trend" when home prices reach levels that no middle-class people can ever afford? Why does the Chronicle run a quote like this ...

Steve Berkowitz, CEO of online listing company Move Inc., said the region "is seeing a real stabilization and a really positive market trend. There is a very solid market in all the Bay Area counties."

... without any indication that soaring housing prices are bad for most people who want to live in the area, bad for businesses, particularly small businesses, that have trouble paying employees enough to afford to live near where they work, bad for the environment (when people have to move further and further from their jobs to find affordable housing) and generally bad for the region?

Yes, it's good to see that people who were underwater on their homes are getting back into the black. But for the most part, what we're seeing is the affordability of homes soar way beyond the reach of the vast majority of people who work in San Francisco. That's not "terrific." That's terrifying.


other people who are more progressive, so your "sample2 is skewed.

I do not know a single San Franciscan with children who approves of SF's school bussing policy.

Posted by Guest on May. 20, 2013 @ 6:07 am

and they hate the lottery system, not because they cannot afford a home. Marin is FULL of former San Francisco families who left for exactly that reason.

Posted by Lucretia Snapples on May. 17, 2013 @ 4:30 pm

exercising options, saving yearly bonuses or borrowing from family members. I know, having sold a home in San Francisco and thus having access to the financials of those making offers, that lots of people have a lot of money saved up they can use for a down payment. If it's your first home you can use 401k or IRA money tax-free, as an example. It's also possible to get a loan without putting 20% down - you just have to pay mortgage insurance, which in the grand scheme is not a lot of money.

But I do recognize that yes, the large down payment can be a hindrance. If you're a teacher or public safety official you can get help with that.

Posted by Lucretia Snapples on May. 17, 2013 @ 4:34 pm

The reality is not what you state Lucretia, most people as in 90% save when they can. When people are forced to spend over 30% of their income on housing and in SF it's about 50% in addition to schools, summer camps, after school programs transit etc., most people do not have the money to "buy-in" to the local market driven solely by real estate values which are based on speculative driven interests. I worked over 15 years renting and saving, utilizing whatever I could to make finally a down payment in 2010 at the market low. I was lucky, as I had saved, most families do not have the ability to save, and we need to develop housing that allows people the stepping stones for home ownership in the existing communities. The reason St. Francis woods and Miraloma Heights etc is so expensive is that many cannot save, and keep their jobs in such a changing economy. If you consistently have to move, or have a change in family status (child or care of loved one, or loss of someone) your situation changes, and due to the changes in the housing element we are not enforcing the need to build EQUITABLY rental and for sale housing at a 50-50 level. That is why when Avalon properties built on ocean ave, most local families could not afford the rents.......meaning they will not be able to stay in the area as development pressures push further into the western side of SF

Posted by Guest on May. 18, 2013 @ 9:19 am

"Bank of Mom and Pop". I know I did, although I did repay them eventually.

Lenders don't like people borrowing the deposit, but their checks for that are fairly perfunctory - they still only ask for the last 2 months of bank statements and, as long as they don't show large sums coming in, you're good to go.

People in SF often prefer to spend 50% or more of their net income on housing. That is their choice - they are willing to invest more in housing here, and less on other things. And, for the last 50 years, that has paid off as RE has probably gone up 100-fold since WW2.

Posted by Guest on May. 18, 2013 @ 10:10 am

The "Bank of Mom and Pop" has nothing to do with meritocracy and everything to do with birth lottery.

Posted by Guest on May. 20, 2013 @ 7:25 am

billionaires who were born poor, so clearly there are other more important factors that determine success.

And whining with envy isn't one of them.

Posted by Guest on May. 20, 2013 @ 8:30 am


You raise irrelevant issues. And make insulting charges like "whining with envy" in response to reasoned argument.

I suspect that you are the same commenter as anon and are responsible for about 25% of all comments on this website.

I also suspect that if you stopped posting comments, these comment pages could be as productive a forum for discussing issues as one could expect on the internet rather than the "cesspool" you have made a big contribution in creating.

Posted by Guest on May. 20, 2013 @ 8:59 am

If the birth lottery was the issue, then people born poor would not become rich, and those born rich wouldn't end up poor. But both of those things happen, indicating that your highly convennient and self-serving theory is wrong.

Oh, and yes, it does sound like envy.

Posted by Guest on May. 20, 2013 @ 11:35 am

contributions to these comment pages. If you are consider criticism to be insult, I can't help you.

I'll leave it at that. I don't want to reopen a discussion of the realities of social mobility where you counter statistics and empirical data with slogans, mythology and actual insulting language.


Posted by Guest on May. 20, 2013 @ 12:07 pm

proud and stubborn to ever admit when you are wrong.

The topic here isn't anyone's posting style but the economy and housing, which you have not addressed.

Posted by Guest on May. 20, 2013 @ 12:38 pm

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just google it

Posted by Vallie Hsiao on Jun. 30, 2014 @ 1:39 pm

According to the Chronicle business page, some 30 percent of home purchases are "investments" -- not owner-occupancy -- and it's much higher in SF. Speculators are driving up housing prices.

Posted by tim on May. 17, 2013 @ 9:34 am

people buy a home because the title transfer documents do not ask for that information. A mortgage lender may make the loan subject to residency but that's a separate issue, and about one third of properties are bought with cash anyway.

Even if a home isn't bought to live in, that doesn't mean it is a speculation (not that there is anything wrong with speculation anyway). For instance, I might buy a property to rent it out, either long-term or via AirBnB. Or I might want family to live there so they can be close by. It might be for an ageing parent or a student child.

Many reasons. And even if as speculation, that only exists if there is the promise of higher prices, so it is RE inflation that drives speculation and not vice versa.

Posted by Guest on May. 17, 2013 @ 9:53 am

How does anyone know if the home is bought as an "investment" (which is a totally amorphous term anyway - isn't every purchase an "investment?) or whether the owner intends to occupy? There's absolutely no way to know that other than realtor gossip. All cash deals are commonly used in San Francisco by both those who intend to occupy and absentee owners and even property "investors" use financing vs. paying all cash. Tim's claim is wrong.

Regardless anyway - a sale is a sale - the medium used (CASH) is the same whether one is an "investor" or intends to live in the property full or part-time. Both benefit the economy the same exact way.

Posted by Lucretia Snapples on May. 17, 2013 @ 4:40 pm

one purpose, that purpose can change at any time. I might leave my main residence and rent it out or do it up for resale. Or a rental that I have might become my home, perhaps to establish it as a primary residence to get a CGT exemption.

In fact, I know people who sell every two years to get that CGT exemption and then move to their next unit, renting out those they do not live in. It's fluid and nobody can credibly claim that X percent of SF homes are bought for investment, speculation or anything else.

Again, some places are bought as second or vacation homes, and may switch to a main residence at a future time.

Posted by Guest on May. 17, 2013 @ 5:10 pm

There is no more single family housing market in SF. Everything is commercial real estate (except for a few enclaves, such as St Francis Woods). The proliferation of conversions of single family homes into multiple family units (illegal in-laws and "Richmond Specials", without penalty, including reassessing these properties to market value has changed the dynamic of real estate. Now, prices are based solely on how much revenue can be generated per square foot. Families can't compete against speculators and developers. Everything is now rental stock. They triumverate of Affordable Housing advocates, Chinese investors and the Residential Builders Assn have destroyed the housing market for average families in SF.

Posted by Richmondman on May. 18, 2013 @ 5:26 am

Glen Park, Midtown Terrace, Forest Hill, Mt. Davidson, St. Francis Wood, Ingleside, Diamond Heights, Excelsior - most of the Sunset etc...

Posted by Lucretia Snapples on May. 18, 2013 @ 7:27 pm

"even if the boom in single-occupant auto travel is a sign of a recovering economy and lots of job creation."

Now back to reality:

Sharp increase in US jobless benefit claims

"A string of negative economic figures released this week point to continuing stagnation in the US in the midst of a worsening slump internationally. The US Labor Department reported Thursday that new claims for unemployment benefits jumped by the highest amount in six months. The same day, the retail giant Walmart said its sales tumbled unexpectedly in the first quarter of the year.

Signs of growing economic and social distress in the US coincide with an accelerating downturn in Europe and slowing growth in China. On Wednesday, the European Union’s statistics agency said that the economy of the euro area contracted for the sixth consecutive quarter, after having posted record unemployment rates earlier in the month."


Posted by Guest on May. 17, 2013 @ 3:51 am

If businesses are doing better because of increased efficiency and productivity, then it's entirely possible that more can be produced with less people, meaning higher profits and higher unemployment.

That in turn is an indicator that pay levels are too high in the US, hence other trends such as immigration, outsourcing, imports and a falling dollar.

Posted by Guest on May. 17, 2013 @ 7:02 am

useless spam filter still blocking any commenting?

Posted by Guest on May. 17, 2013 @ 3:43 pm
Posted by Guest on May. 17, 2013 @ 3:56 pm

Ah, so no links of any kind can be added. Fuck it. Waste of time to post.

Posted by Guest on May. 17, 2013 @ 3:45 pm

Just enter the letters and numbers.

Posted by Guest on May. 17, 2013 @ 3:57 pm

The Financial Press–A Disinformation Machine — Paul Craig Roberts


Anyone who thinks an economic recovery has been ongoing since June 2009 can cure themselves of the delusion by looking at this chart:


Posted by Guest on May. 17, 2013 @ 7:03 pm

can look at all the evidence it isn't just by contacting the Flat Earth Society. They know the truth!

Posted by Lucretia Snapples on May. 17, 2013 @ 8:12 pm

It's just that simple - Steve Berkowitz is thinking like someone only concerned with profit and stock prices. It literally turns people into a commodity. There's no room for humanity in such an equation. Instead of prices being based on Lbs of human renters, it's measured in square footage of occupied space by the dehumanized unit of expectable profitability.

Posted by Guest on May. 19, 2013 @ 7:37 pm

that leads to higher incomes, dividends, rents and other forms of income.

Posted by Guest on May. 20, 2013 @ 6:04 am

The Slate article previously linked is a hoot for all of its flawed assumptions (eg, building more units for global investors will help middle class affordability; temporary construction jobs to build investment baubles for the wealthy is somehow a long-term sustainable economic model, etc.)

But commenter Jack Crisp has it right (substituting SF for NYC):

"SF needs more foreign property owners that:

-Don't pay income taxes (in the US) since they don't live here.
-Treat their property as an off-the-books income source by charging massive rental markups to SFers unable to find alternative housing (since it was all bought up by the global elite).
- Let a property management company run their uninhabited units as illegal hotel rooms by renting to tourists on AirBnB and the like but again, not paying any hotel taxes to the city."

The least wealthy 80% of SFers are in the same economic situation as the local residents of Hong Kong, NYC, London, Shanghai, Singapore and a few dozen other global elite cities where the very wealthy park and extract wealth from the local population. Instead, housing should be dedicated to the people who live there 24/7, not for the global elites to maximize their cash flow by charging exorbinant rents and high purchase costs that makes the 24/7 residents much worse off financially.

The increase in wealth by global elites from their real estate investments only attracts more investment capital that eventually leads to even higher rents and higher purchase prices as more and more full-time residents are squeezed from the market. The additional thousands of new high-paying jobs hired by local companies also distorts the housing imbalance in many of these cities, including SF and the Bay Area.

Limiting housing purchases to full-time residents, and adding exorbinant capital gain taxes, transfer taxes, and gross rent income taxes on foreigners who purchase any housing zoned for single family ownership, will help bring the housing costs into a much better balance for the people who live and work in the area. The residents' increased wealth will benefit the local economy too since they'll have more purchasing power with less of their income spent on housing. Requiring large companies to build new housing for their new hires would also help create more long-term housing balance.

Posted by Guest on May. 20, 2013 @ 9:18 am

Easy. Buy the homes at a market price and then lease them to whomever you wish. Otherwise you have that pesky Constitution to deal with.

Posted by Guest on May. 20, 2013 @ 11:33 am

Basic fact of why people want to spend the money to live in the city. It is not the schools, it is not the open space, clean streets, quiet living. No it is the high end trendy places, good food, city living. Views, art, culture, music, you can be hip, cool and live in a flat. Mostly likely you will commute or start up a small business.

If you want to start a family, you can either send you kids to private school or sell your home in the city to another young hipster. You take the money and move to Cupertino, Palo Alto or Piedmont.

Posted by Garrett on May. 21, 2013 @ 4:10 pm