|
PureBytes Links
Trading Reference Links
|
Here's an interesting column from a local reporter for the San
Francisco Chronicle on the other effects of [our] high housing costs
out here in the SF Bay Area. Note that like a lot of other people, he
doesn't believe that these housing prices will ever decline much
regardless of the economy down the road. I of course, disagree (for
what that's worth <g>).
JW
-----
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2000
/06/02/PN101052.DTL
Keeping Up With the Joneses' Toys
Mark Simon Friday, June 2, 2000
----------------------------------------------------------------------
----------
PENINSULA -- Real estate sales may be slowing down, as amply reported
in the last several days, but it's hard to believe that the prices of
homes on the Peninsula are going to be significantly affected.
The key word, of course, is significantly.
There's a cycle to this we've all seen before over the last three
decades.
Housing prices go up dramatically, they level off and maybe they even
go down a little. But they never go back down to where they were when
the climb began.
The end result is that housing will always go up in price. The demand
for housing always will outstrip the supply, barring a concerted and
sustained public and private effort. Such an effort is not only
unlikely, but would transform this area into something so foreign to
what it is now that it would become undesirable.
What stopped the previous housing frenzies was a dip in the economy,
and, certainly, the cooling of the stock market appears to be behind
the slowing of housing sales this time.
But this economy seems more immune to the kinds of drops that occurred
in the mid-1970s and again in the late 1980s.
That's why housing prices will never be the same, and that's why this
area may never be the same.
Long before prices cool off, we're more likely to see other signs that
the cost of living is changing dramatically on the Peninsula, and with
it the nature of the life we live here.
People who pay $1.5 million or $25 million for a home have a different
set of expectations, hobbies, habits and tastes from those of us who
bought the same homes for $100,000 or $500,000 two decades ago.
The result is going to be higher prices in areas other than housing.
The result also is likely to be more of the ostentatious consumption
we've seen so far now only in housing and, to a lesser degree, cars.
People with top-end incomes want top-end toys and accoutrements.
That may be what underlies the uneasiness about the housing market.
If my house is now worth more than I can afford, it may not be long
before the rest of my community moves beyond my means.
You can see it in a number of early indicators.
The cost of private schools on the Peninsula has skyrocketed in the
last five years, in keeping with the huge demand for the very few
openings such schools offer every year.
Another indicator is what's happening in the area of child care.
As the cost of living rises, more families need two incomes, which
means more families need someone to watch the children.
There is not enough top-quality child care to go around. Parents of
small preschool children say the situation has become a nightmare.
At the recent Children's Summit, sponsored by San Mateo County
Supervisor Mary Griffin, the top priority among the more than 300
people in attendance was not children's health or quality of schools,
but child care availability, the cost of child care and the growing
number of children who are home alone for long stretches of time.
At the summit, the participants were divided into 10 groups and asked
to list the top three child-related priorities.
The top two were child care availability and children who are
self-supervised. The third was the affordability of housing.
Clearly, it's all part of the same problem -- a cost of living that is
outstripping our ability to keep up with it.
----------------------------------------------------------------------
---------
©2000 San Francisco Chronicle
|