Will the West Coast real estate and prestige boom ever die down? (housing, prices)

[Serious Conversation]

Over the past fifteen years or so, the West Coast has increasingly gained wealth, prestige, and influence from the tech boom. Real estate prices and rents have risen dramatically, displacing many long time residents, leaving fewer and fewer people able to afford the prices, yet they just keep going up!

Do you see this boom ever running out of steam?

[nightlysparrow]

Originally Posted by Serious Conversation

Over the past fifteen years or so, the West Coast has increasingly gained wealth, prestige, and influence from the tech boom.

It's not just because of technology. Sure, there's Apple, Facebook, Google and many more examples of tech, but on the West Coast there's also Starbucks, Costco, Hollywood movies and TV and their worldwide influence on culture, multiple ocean ports to receive goods from Asia, high population levels, political power, willingness to try new ideas and new laws (even if other states eventually write better versions of the laws, like legalization of marijuana, gay marriage, death with dignity, etc.), a focus on environmentalism, openness to multiculturalism and diversity, and many other factors.

Don't see much of a downward direction.

[honobob]

This Boom has been going on for a lot longer than 15 years. Prop 13, the cap on real estate taxes, was voted on in 1978 (37 years ago) because of rising real estate taxes. The tech boom is just the latest industry to dominate the market. People want to be here for the climate and the natural beauty.

[jas75]

The large West Coast metropolitan areas have a major supply/demand imbalance for housing. The 'tech boom' mostly applies to the greater San Francisco and Seattle metro areas, but the entire coastal region is extremely expensive. Land use restrictions and water availability, as well as mountain and ocean boundaries are also factors.

I think the huge real estate price differentials between the West Coast vs. most of the Midwest and South are here to stay, but there will be intervening booms and busts as the economy fluctuates. Ultimately many people (such as myself over a decade ago) are opting to move to parts of the nation that have less of a mismatch between typical incomes and the cost of living, and many businesses are doing so as well. The population growth in California especially results more from natural increase and foreign immigration.

[tarheel_indc]

Here are my two cents:

I think it makes sense that the tech industry (and its associated funding) will be more geographically diversified than it is now. I think Silicon Valley will remain king for the foreseeable future, but real estate is so expensive in that area that new companies and employees will consider moving elsewhere. Areas like Austin, Atlanta, Denver are attractive to young talent and are much more affordable than SF.

[Tall Traveler]

The deal is that people come to the West and stay, they don't want to go back East, Midwest, or South. So it's supply and demand. Of course the economies of bay area in particular and also Seattle are big drivers as well. I don't see it dissipating anytime soon.

[kyle19125]

Originally Posted by tarheel_indc

Here are my two cents:

I think it makes sense that the tech industry (and its associated funding) will be more geographically diversified than it is now. I think Silicon Valley will remain king for the foreseeable future, but real estate is so expensive in that area that new companies and employees will consider moving elsewhere. Areas like Austin, Atlanta, Denver are attractive to young talent and are much more affordable than SF.

^^^ This and would say the same applies to Seattle (to a lesser degree) as housing costs/cost to do business become prohibitively expensive for new ventures as well as existing ones looking to cut costs. In a global economy it's somewhat ridiculous to restrict facilities to locations with hefty premiums when places like Austin, Raleigh/Durham, Charlotte, Atlanta and Houston exist.

[Phil P]

I would say California will for the foreseeable future always boom/bust harder than most of the nation. I think rising interest rates will hurt it, because with housing taking up THAT much of your budget, a marginal increase in the loan value for new buyers might just push it out of peoples reach. And with prices being sticky, it could hold out and be a sudden drop rather than a gradual decline.

If a earthquake ever does hit that will shake the economy pretty badly there. But the chances aren't high enough or predictable enough to bank on one happening.

I don't know, Cali has the most haters out of any state I've seen, both from within the state and from outside. A lot of positives accompanied by some big negatives, so it's bound to have polar views. I personally would never live in that state. Only North Dakota and Montana would rank lower for me.

Portland boxed itself in with a height restriction and a growth boundary, so prices are bound to rise and its already pricing many things out. I could see it having growth stagnate in the future (due to supply restriction) but maybe not boom/bust.

[kehkou]

It will end when the west coast slides into the ocean or becomes flooded. I kid, I kid. The reason that coast has so much "prestige" is simple: trade route with Asia, nothing more.