High Housing Prices In Tech Cities Are Now Raising Home Prices In Other States (bloombergquint.com)

Tech cities and their high housing prices are apparently now driving up home prices in other states. An anonymous reader quotes Bloomberg: For some Californians, the state's punishing housing costs, high taxes, and constant threat of natural disaster have all become too much... In the second quarter, only 26 percent of homebuyers in the state could afford to purchase a median-price single-family house, which was almost $600,000, according to the California Association of Realtors... They're making their escape to areas such as Boise, Phoenix, and Reno, Nevada, fueling some of the biggest home-price gains in the country... Almost 143,000 more people left the state than arrived from elsewhere in the U.S. in 2016....

Boise is becoming an alternative to traditional havens for Californians such as Portland and Seattle that have also gotten too pricey, says Glenn Kelman, chief executive officer of Redfin Inc., a national real estate brokerage that recently opened a Boise outpost. About 29 percent of the Idaho capital's home-listing views are from Californians, according to Realtor.com... In Nevada, where Californians make up the largest share of arrivals, prices jumped 13 percent in August, the biggest increase for any state, according to CoreLogic Inc. data. It was followed closely by Idaho, with a 12 percent gain...

[Boise]'s been particularly attractive to Californians, who accounted for 85 percent of net domestic immigration to Idaho, according to Realtor.com's analysis of 2016 Census data... The median existing-home price in Boise's home of Ada County was $299,950 last month -- up almost 18 percent from a year earlier, but still about half California's. The influx is great news for people who already own homes in the area, says Danielle Hale, chief economist for Realtor.com. "But if you're a local aspiring to homeownership, it feels very much that Californians are bringing high prices with them."

Comments

We need to BUILD MORE HOUSING

[ZorinLynx]

We need higher density and more housing. The only way to solve this problem is to increase the supply; the ONLY reason this problem exists is because of lack of housing in places people want to live.

We need to rezone R-1 areas for multiple unit housing. R-1 zonings are a massively inefficient use of space and are part of the reason we have so much traffic and sprawl.

We need to give the NIMBY types the finger and BUILD MORE HOUSING. Especially in the Bay Area. It's the only thing that will solve this; even if you were to regulate prices, it'll just turn the problem into "nobody can FIND any housing."

Re:We need to BUILD MORE HOUSING

[b0s0z0ku]

Or just raise interest rates to pull the rug from under over-inflated markets that are being misused as investment casinos. That and tax vacant property at 1000% of the rate if it's lived in or rented.

Re:We need to BUILD MORE HOUSING

[b0s0z0ku]

Better a tax than an outright ban. Harmful behavior should be discouraged, and keeping properties vacant long-term in markets that have a scarcity of housing qualifies as harmful.

Re:We need to BUILD MORE HOUSING

[paiute]

Using taxes to try to change behaviors or as de facto bans on certain things is a slippery slope that we should not ever start down.

I hate to break it to you, but the Federal tax code is 75000 odd pages - most of which were written expressly to change financial behavior.

Re:We need to BUILD MORE HOUSING

[luther349]

you have any idea how many people live in the vans or rvs in that area because they cant afford or find housing. so lack of housing is a thing rite now. the city government stole billions that was giving them to build more housing. they have not green lit any new buildings in like 10 years. in short the bay area did it to themselves and are crying about it.

Re:We need to BUILD MORE HOUSING

[mikael]

Families don't want to live in high rise blocks. What usually happens is that the more high-rise apartments you build, the more single couples you attract who then start looking for a "icing cake" home or a McMansion.

But there is a great waste of space where there are single story strip malls. In Europe and Canada you will find that they will build shopping malls next to Metro stations, and apartment/office blocks above those. Even strip malls will have three or more levels of apartments above them. Then you don't need a car to get around.

Re:We need to BUILD MORE HOUSING

[ShanghaiBill]

You think conservatives should be for this tax?

Yes. It is called Land Value Tax, and fiscal conservatives are not only for it, we are the champions of the cause. It is progressives who are usually opposed, so I am not sure why that somehow got inverted here on Slashdot.

It is the least bad tax, and the best and most economically efficient form of taxation. Milton Friedman was an advocate, as was Ludwig von Mises, both demigods of economic freedom.

Unless you are an anarchist, you should accept that some taxes are necessary. Land Value Tax is fair, unavoidable, and unlike many taxes that disincentivize productive activity, LVT actually encourages enterprise.

It has been implemented many places, including Singapore and Denmark. It works well, which is what you should expect, since Milton Friedman was never wrong about anything.

Re:We need to BUILD MORE HOUSING

[skam240]

Many families would love to live in high rise blocks in California. Working class people in silicon valley are living multiple families per single family home. Meanwhile, small single family homes are going for over a million there. How would either of those be better than an affordable high rise for a family?

Most of the world's major first world cities have plenty of families in high rise housing. I think you're just expressing your own personal bias against such living situations.

You do certainly have a point on mixed use zoning though.

Re:We need to BUILD MORE HOUSING

[ShanghaiBill]

there isn't anyone in North America, in the 21st century, that wants to live in a city like Boise.

... except for the 200,000 people that live in Boise, and the thousands more that move there every year.

Re:We need to BUILD MORE HOUSING

[ShanghaiBill]

There is also the opposite, BETTER solution: Stop encouraging more people to be born and immigrating here.

That is a terrible idea. Americans are the most productive and innovative people in the world, and immigrants are able to unleash innovations, energy, and enterprise that were stifled in their homeland. We need more Americans, not fewer.

Re:We need to BUILD MORE HOUSING

[dryeo]

I don't know about California, but around here there's a lot of money laundering, mostly by foreigners, who are happy to sit on vacant property rather then have the hassle of actually renting it out. For a Chinese billionaire, having assets in the west that their government doesn't know about is the important thing.

Re:We need to BUILD MORE HOUSING

[Miamicanes]

Higher-density can help... but only to an extent.

If you're talking about single-family homes on large lots vs 16-28 foot townhomes of comparable size, yes... it might increase availability and reduce costs.

If you're talking about 50+ story skyscrapers, no... it won't. Skyscrapers are SO expensive to build (per square foot of habitable dwelling), the economics just aren't there to build anything less than luxury condos for the ultra-rich. If the developer is ALREADY spending $300/sf, adding $200/sf for premium finishes and doubling the selling price is a no-brainer... if only because someone who can afford $300/sf isn't going to spend that much for the equivalent of a doublewide trailer in the sky.

The catch is, places like the Bay Area are already "built out". The swampy land adjacent to the bay that's currently mud flats is only suitable FOR building skyscrapers, because only skyscrapers have the structure & foundation to rest on deep bedrock & survive earthquakes (Florida-style landfill won't work there... the first time there's a major earthquake, the landfill gets sifted, re-compacts itself, and whatever was sitting on it collapses). People who could AFFORD to buy a hypothetical skyscraper along the bay near somewhere like Mountain View don't WANT to live in a skyscraper adjacent to the bay near Mountain View, because it smells like rotting garbage & isn't particularly attractive... they want to live in a house on the side of a cliff overlooking the whole valley, or in SF itself.

And because the whole area is already built out, the only way to get land to build townhomes and apartment buildings is to buy existing structures, knock them down, and get permission to rebuild at higher density... which the remaining neighbors will fight tooth and nail. So what REALLY happens is, someone buys a block with 24 old single-family homes, knocks them down, and replaces them with half as many mega-mansions -- effectively, making things even WORSE. Or they'll buy an old apartment building with 50 units and poor residents, demolish it, and rebuild a new apartment building with 60 units that cost twice as much as the 50 units it replaced.

Basically, the Bay Area's densification ship has already sailed, and for the most part it's too late. At least, until the next major earthquake. If a city like Palo Alto were 90% flattened by a horrific earthquake & almost everything had to be rebuilt anyway, it MIGHT be able to get residents to approve a deal that would let them have their cake & eat it too by allowing them to sell half of their lot to someone else (or replace their original one-story single-family home with a three-story duplex sharing a wall & sell the other one)... but after a catastrophic disaster, local governments are rarely in any position to pull something like that out of a hat.

True story: 50 years ago, when US-1 was six-laned through southern Miami, the section near SW 152nd Street was split into two one-way roads because there wasn't enough room to widen it to 6 lanes along the original route. In 1992, Hurricane Andrew destroyed 99% of the structures in that area beyond repair. The area was ultimately rebuilt from scratch, and US-1 is STILL a pair of one-way roads, even though the original problem (lack of land) was solved by Andrew's destruction. Why? All the people who LATER bought property along the northbound lanes (shifted a block east from the original route) paid a premium for that land because it WAS adjacent to a major highway -- shifting the northbound lanes would have profoundly harmed the value of their land (and gotten the state & county sued). And FDOT still didn't own enough land adjacent to the southbound lanes to do it, even though the land was now stripped bare. Put another way, city planning decisions made long ago tend to affect future land use, even long after the original rationale has been forgotten or ceased to matter. It's the same reason why London's streets are a medieval rat's nest, even in areas that were bombed into oblivion by the Luftwaffe during WWII, long after the original structures that dictated their layout (or cemented it in place) ceased to exist.

Absolutly

[skam240]

Mod up a hundred times.

Unfortunately our states Leftist have forgotten that being a leftist means first, second, and third, looking out for those with less money.

Developers are evil (never mind all these people's homes were built by them). California will always be an attractive place to live so building more homes won't do anything (never mind the laws of supply and demand). We can't build upwards because we have to protect our community! (never mind that your community is full of working class people who will suffer and your kids will probably never be able to buy a home near you unless you do it for them).

This is all bullshit I hear from local Leftists living just north of SF where property values are certainly going insane (and for the record I'm fairly left wing). All this is personally great for me because I'm a home owner although it does make most things a bit expensive. What really bothers me is all the working class people suffering because no one will own up to the only solution. It's all rent control and low income housing which do nothing to solve our massive housing shortage and in some ways exacerbates the problem.

Plus, I was one of these people once and was lucky enough to live around here when a single working class person with a roommate could live comfortably.

Re:Absolutly

[superdave80]

It's all rent control and low income housing which do nothing to solve our massive housing shortage and in some ways exacerbates the problem.

Amen. I'm always amazed every time rent control is brought up as some type of 'solution' to a housing shortage. Number of new housing units created by rent control? Zero. Absolutely NO new housing gets created. And in fact, it TAKES housing units off the market, because it just makes an incentive for people to never move from their rent controlled unit, even when it would make sense...

Re:Absolutly

[dgatwood]

There's only one real way to solve the housing problem: Repeal Prop 13. Pass a new law that gives a deep tax break for low-income residents only, and makes that tax break not limited to a specific parcel. Right now, the poor are trapped in their existing homes, because they can't afford higher taxes to move whenever their job changes. And even the middle class often choose to live farther away rather than pay thousands of dollars more in property taxes.

By eliminating that problem, many people will try to move closer to where they work. But there won't be housing there, which will drive prices for homes and commercial property on the SF peninsula rapidly upwards to the point of absurdity, which in turn will give businesses more incentive to move out of the peninsula (and remove the tax disincentive to doing so) and spread out into other areas where land is more readily available, which will over time correct the artificial property inflation that Prop 13 caused.

Re:Absolutly

[Anonymous Coward]

"Proposition 13 was intended to make sure retirees wouldn't be price out of their homes once they had retired, due to the fact they had a fixed income."
Bullshit. Prop 13 was intended to reduce and then keep _Commercial_ Property Taxes low. Commercial Property may not change hands for decades, so those jerks like Chevron and Wells Fargo made out like bandits, still paying assessments based on 1978 values. (The SF Chron estimates that California is losing ~$9B in funding due to this chicanery every year.)
Private Housing turns over much more rapidly, and each time it is sold, maybe every 5-7 yrs, it gets reassessed. For the vast majority, except for the very old who still live in the same place as they did 40 years ago, any initial Prop 13 savings have long evaporated. Even here something was jimmied together to replace lost Education funds, "Parcel Taxes", which can exceed Assessed Taxes significantly, and Chevron pays the same fixed Parcel Tax on a Refinery that LOLs pay on their decaying Bungalows.
However, Prop 13 was _sold_ to the Electorate based on fantasies of Little Old Ladies eating Cat Food, because otherwise they couldn't pay their taxes.
No matter how bad Property Taxes were in 1978, they are horribly worse now just in Social Costs alone.
Screw Howard Jarvis, and as for Paul Gann, I understand that he suffered a long, painful, miserable, and richly deserved death.

California expats flush with cash

[nehumanuscrede]

Long term residents of CA who purchased their homes long ago at a reasonable price can now sell said home for ludicrous amounts of money.

This allows them to move out of State and easily pay cash ( far in excess of the asking price ) for homes where home prices haven't gone full stupid yet.

As the number of homes in an area start selling for insane amounts of money, it drives the asking prices up for all the homes in the area.
It also raises your tax appraisal values so you get to pay more in property taxes every year. Pretty soon, no one local can afford housing in the
area because the asking prices and taxes are so inflated.

Texas median household income is around the ~$60k mark yet, there is a new subdivision full of homes nearby that -start- at $500k.

It's insanity.

** The amusing part is watching folks move into one of these $500k+ homes only to learn that Texas property taxes are uncapped and can
increase by 10% every year. The State loves to advertise that we have no State Tax, but those property taxes more than make up for it. **

Re:California expats flush with cash

[b0s0z0ku]

High property taxes are WORSE than high income tax, since they're not tied to income. Lose your job, and at least you won't be paying much income tax. But you will be paying property tax regardless. The only good thing about this mess is that TX has reasonably strong protections against foreclosure of a primary residence. (Or maybe had, IDK about recent law changes.)

Re:California expats flush with cash

[nehumanuscrede]

I agree with you.

At least a State Income Tax is fixed to your income. The more you make, the more you're taxed.
Whereas property taxes never seem to quit going up.

Becomes a problem when you finally get to quit working and retire. That home you paid $75k for
forty years ago is now tax appraised at $300k ( or more depending on where you live ).

Gets rather tough to keep paying more and more in property taxes every year once you quit working.

Re:Yeah, no.

[b0s0z0ku]

Recessions can be a good thing. Econ 101: they reduce income inequality.

As far as the administration, should I actually care about what Trump & Co can or can't explain away? Having Trump be a one-termer isn't all that sad of a prospect.

Re:Yeah, no.

[PopeRatzo]

Are you seriously saying that the massive inflation of the Carter era was a good thing?

Yes, better than what we have now.

Because that massive inflation had the effect of stripping away the savings of those "middle and lower classes"

No, it did not, because that inflation was more evenly distributed and meant much larger wage growth. Also, the higher interest rates kept housing prices down and allowed people to actually put some money in the bank and get something back.

It was bad for the stock market, which back then was OK for the middle and working classes because their pension funds had not yet been raided by corporate fuckwads.

Sure, people that spent all their cash to buy right before the inflation started made out great. Everyone else got fucked.

This is where you make your error. Higher interest rates mean lower housing prices. Yes, the loans are more expensive, but then as soon as the rates backed off, you could refinance and your house price would go up.

The Carter years were the last years that the middle class and lower actually gained some ground. Since then, it's been a ceaseless downward trajectory.