patrick.net

Did you ever wonder why cities have been cities for hundreds of years and not turned in to villages.

For a place to produce things you need : information exchange and transportation of goods between various units of production. distance increases the delay for both these and thus clustering of the various units of production naturally happens as its the most efficient way to produce something (resulting in cities )
information exchange is now becoming independent of distance due to significant innovation in information technology but transportation of goods is still distance based.
most of the jobs in bay area are information based and do not need transportation of goods so we will be most affected due to outsourcing in future.

yeah this is what i was thinking too. There are colleagues who tell me that they might move to Austin because there Dollar would go much further there, so there are some other pockets in country where you have lot of technology jobs and houses cost much lesser. So this recession would definitely cause some people to look elsewhere.

homeowner_for ever_san jose says

most of the jobs in bay area are information based and do not need transportation of goods so we will be most affected due to outsourcing in future.

Geographic co-location is far more important for software companies than it is for other industries. Our jobs are a constant exchange of ideas.

I'm leaning heavily towards relocating to the seattle area, and the number one concern that I have about the move is that I will be working at a distributed office rather than at our headquarters. This means I will most likely not be working on the most interesting projects, nor will I have access to the same range of co workers.

Anyone else moving/moved out of the Bay Area? Any success stories to share?

It is normal.

flipper12345usa says

Anyone else moving/moved out of the Bay Area? Any success stories to share?

I close friend of mine from High School got married four years ago, and upon the birth of his first child (one year later) moved to Pittsburgh (PA, not CA). His wife did not want to work while they had young kids in the house and they decided that it was impossible for them to have an acceptable standard of living in the Bay Area on a single income. He was lucky because his company had an office there for him to transfer to so he only took a small pay cut. They now own a nice house (huge by Bay Area standards, normal in the Midwest). I saw him at a wedding a few months ago and they miss their friends and the weather but are very happy.
I think once you have a family and become a homebody most of the advantages of living in CA disappear.

moving out of bay area is slightly easier for american citizens.
For most immigrants ( like east indians), bay area offers certain ethnic related things which are difficult to get else where.
Also , for dual income house holds, both losing a job and getting it back in the same place is easier in bay area compared to other places.

I moved back to the BA recently after living on the Central Coast and southern NM for several years - I rented in 2 States simultaneously.

Tomrisk:

It cost me $10k to come back to Cali. Atlas VanLine movers (they are the only ones who do a background and citizenship check on all employees including the movers/packers - no illegals and no green-carders), additional rental of a Budget 14-foot moving truck (20% discount avail through the USPS Moving Packet avail in all Post Offices), mid-priced hotels for 3 days, first month's rent, security deposit, utility set-ups with AT&T, internet, PG&E, water, etc.

Flipper12345usa:

I made a lot of posts on thehousingbubbleblog re living and renting costs in the sw part of NM as well as my observations re west TX and southern AZ (Tucson). Not sure if Ben has a search on there for username, however, my username here is the same as that site, so you could check that out.

I will give you a small summary though - in 2007 A LOT of cars with FL plates headed west to AZ and CA (presumably) from FL due to the meltdown there which is worse than here in Cali. Tucson has imploded as has most areas of Scottsdale like DC Ranch/Troon Ranch, which became during the run-up, an outpost for assorted trash and skanks. What a surprise for those who bought in thinking that it was different because its "Scottsdale." I was last in AZ in May and things are subdued to say the least.

Many younger professionals simply do not want to live in the Bay Area due to its high cost of living for housing. This area just does not hold the same appeal for GenXers and the Millennials as it did for Boomers. Unfortunately, Boomers still think that the BA is still THE place to live and have invested themselves and their wallets into an area that lacks the same luster as in the past when they moved here.

For those Californians (real natives, not transplants from somewhere else) who are thinking of moving out-of-State:

You will get homesick. It will be rough getting used to the lack of consumer protection laws, flakey law enforcement ("You don't expect us to do anything, do you?" - actually stated to me by a sheriff's officer in NM). No Trader Joe's, obese people in numbers like you've never seen before unless you're moving to CO,
the same Real Estate Agent cr@p where they price housing above local wages - just enough to bring about "bleed factor." Tacky hair salons I wouldn't trust in any way shape or form. Bad roads, frustrating government, incredibly incompetent legal community with lots of "buddy system" politiking going on - just like any other 3rd world country.

if you can avoid all this, you'll do OK.

One thing: housing is cheaper in other States reason being that you end up spending a lot of time indoors due to the weather.

~Misstrial

Personally I would love to move to a location where I could own a relatively new house for, say, 400K in an area as rich with software development jobs as the SFBA is, nice demographics, and a temperate climate. But I am still not even sure there are comparable areas. And personally I do not see my acquaintances moving out. In addition, I know quite a few people from out of state who are planning to go to Silicon Valley once they can (e.g. sort out their immigration affairs).

If you think about it, the climate here is truly exceptional (especially in comparison with TX, WA and other high-tech alternatives) despite the looming water shortages. I heard this summer in Austin they had about 40 (sic!) days of triple-digit temperatures. Not to mention all the snakes and such. Seattle means as many cloudy or downright rainy days as we have sunny ones, it snows in CO, NC's research triangle is in the middle of nowhere, NYC is insanely huge, Chicago is cold&windy and so on.

Judging from RE prices the market has apparently decided that the SFBA is optimal. And the very same prices seem to be the only real problem because there are very good public schools in towns with decent demographics (at least in the East Bay).

Another theory I heard is that it's all about the VCs. Startups move to where they live and most VCs prefer this area. So unless they move the jobs are likely to stay.

Nick you mentioned Austin TX. lol
I could always tell the Californian Austin drivers on the 10 fwy from the other Texans because the Cali ones kept their Californian-locale license plate frame. lol

I kept my Cali license plates of course since that's the State of my legal residency - so the Cali TX drivers would slow down around me as a show of cameraderie - lol :)

Believe me, when you are a real Californian (not someone who moved here from somewhere else) and you have to move out-of-State, one of the FIRST things you do is try to find other Californians and where do they shop, hang, hike, walk, whatever....heck even in Austin they have a section of town called "Little California" where many Californians live.

But yeah, Austin is hot hot hot and triple-digits is common in the summertime. I've been told to expect a/c bills of $250/mo and higher if you have a pet that needs the a/c on when you're at work - some as high as $900/mo for a/c 24/7 in the summertime.

TX also has high property taxes (Texas aka "Taxes") and some homeowners from El Paso have moved to Anthony, NM (which is across the street since Anthony is right on the border of TX and NM) to retain their TX identity but live in a low property tax State.

~Misstrial

"The Opportunities" is so unique that does not exists in any other cities.

The bay area weather can definitely be a big plus, but I differ with people who think it is the be all and end all of the universe. I have lived north, south and east and now west (in the U.S.) and each climate has pros and cons. To be honest, the coastal fog is for me just plain cold and nasty much of the time. I don't mind a little heat. And go far enough inland and it is pretty G-D hot, as bad as Alabama where I once lived. In the south (and in the north and east coast) you have some wonderful summer rains and lushness that the bay area doesn't. Winter rains in the bay area can be nice, but often just cold, wet and uncomfortable. All that said, measure for measure the bay area weather is one of the best climates anywhere and can't be denied; let's just not turn it into a reason for ridiculousness. The north (MI) was too cold for me, but fall was WONDERFUL, the best season anywhere. The change of seasons are a very human, natural thing that many thrive on.
Perhaps this climate thing explains parts of the SF penninsula being so very expensive - ever notice the micro-climate in Hillsborough, Woodside, Palo Alto versus Pacifica, Daly City, etc? I really do think this explains a lot.

pkowen says

ever notice the micro-climate in Hillsborough, Woodside, Palo Alto versus Pacifica, Daly City, etc? I really do think this explains a lot.

I live in the equivalent micro-climate in the East Bay, my little valley easily has one of the best micro-climates in the Bay Area. It's is also one of the cheapest areas in the Bay Area...

There are very few geographic areas in the world that have a Mediterranean climate like the Bay Area. It allows me to bike to work all year. I don't have a huge yard, but I can walk to about 5 different tot lots with my kids. That said, 2000 was the last year I could afford to buy into BA real estate (which I did) before I was "priced out forever"; will be interesting to see where we end up when the dust settles. Kevin, I appreciated your post; some good points which many folks tend to ignore.

My co-worker like Seattle too, he said the people there are really nice.
The weather in Bay Area is really nice, but I can't say the samething about people. Generally speaking people are very impatient here.

warblah says

My co-worker like Seattle too, he said the people there are really nice.
The weather in Bay Area is really nice, but I can’t say the samething about people. Generally speak people are very impatient here.

That's because "it's all about me" here. Depending on the 'me-mees' we are talking about. I find all kinds here actually, many very 'good people', but a good number of intolerable me-firsters. Usually very proud of themselves and sure they are on top ...

For the record I agree with Kevin's about the 'constant exchange of ideas'. I am also in technology and I have always thought the idea of 'remote work' in technology is over-blown. Face to face meetings and discussions are essential, if not every day then at least very regularly.

Seattle... Compare with BayArea, I like BA better.

yeah this is what i was thinking too. There are colleagues who tell me that they might move to Austin because there Dollar would go much further there, so there are some other pockets in country where you have lot of technology jobs and houses cost much lesser. So this recession would definitely cause some people to look elsewhere.

By all means, move to Austin.

While every American with even a little blood in their veins loves California, and Californians, there is no more reviled transplant in Austin than the nerd bird diaspora hailing from CA that have moved here over the last five years or so with their phony bubble wealth, paying 500K in cash for homes that weren't priced at half that in '01, thereby jacking up the costs of everything - which, by the way, will gradually have the effect of simply exporting the high costs of living you're trying to escape and relocating it to Central Texas.

By the way, if you're moving here from, say, Cupertino...uh...the terrain is a little different, and you aren't an hour from Carmel-by-the-Sea.

I moved out of California in 2007. I moved to Wisconsin- 1 hour West of Madison. Bought a 4 year old 1500 sq ft house on 2 acres right near the WI River, bike path that goes thru woods for 20 miles, and built a golf hole in my backyard. Paid $155K for the house! Prop taxes are $2900 year. Utilities run me $200 month.

Only thing lacking is ethnic diversity- just not enough gangs and no graffiti. darn. Summers are great, Spring and fall are awesome. Yes, winter is cold and snows, but 3 words- All Wheel Drive.

I love the midwest~! Why the hell did I wait so long.

Don
Gotham, WI

PS. Actually, there is one negative. People stop and have their picture taken by the Gotham sign when I'm trying to relax in my yard.

Madison is a nice town and the people are friendly. I spend a three days there in the 90's for business. To bad the women are not the same quality in the looks department as what I'm used to seeing here in California.

chrisborden says

I can tell by the lack of comments on my posts that I am mostly invisible here (and I understand that since I live way outside the boundaries of what is called a normal middle class lifestyle today and being over 50 and uninterested in tech), so I am checking out since I’m leaving my native Bay Area soon anyway.

Valuable insight about what is ahead for people who are bubbling with energy and are far from reality , blinded by Sunny California.

Chris,

Not to call you out, but didn't some of that California unreality result in a cool 100K in your jeans from when you sold before the housing bust?

Salem, OR is beautiful. And hell, it isn't the Bermuda Triangle. You can always visit or move back one day.

jeffr says

Madison is a nice town and the people are friendly. I spend a three days there in the 90’s for business. To bad the women are not the same quality in the looks department as what I’m used to seeing here in California.

I thought Women in texas and in general in south were much hotter and good looking...

Austinhousingbubble says

By the way, if you’re moving here from, say, Cupertino…uh…the terrain is a little different, and you aren’t an hour from Carmel-by-the-Sea.

True that, but you would be just down the street from the statue of Stevie Ray Vaughn.

So the conclusion is people are not going to move AWAY from SFBA, they would stick around an d waiting so that things can better here.

chrisborden says

I can tell by the lack of comments on my posts that I am mostly invisible here (and I understand that since I live way outside the boundaries of what is called a normal middle class lifestyle today and being over 50 and uninterested in tech), so I am checking out since I’m leaving my native Bay Area soon anyway.

Hey now, I always enjoy your posts even if I don't always respond to them specifically...

For Californians in Austin and other places -

a beautiful California slideshow courtesy of pro photographer R.G. Ketchum:

http://www.robertglennketchum.com/#mi=2&pt=1&pi=10000&s=0&p=15&a=0&at=0

Photos are of the California coast north of San Luis Obispo to Monterey county. Enjoy!

~Misstrial

Weather aside, other states simply suck in terms of job prospect.

I am more than willing to be an equity locust to live it up anywhere along the west coast, but the job prospect is just so appalling, let alone Austin or Dallas, thanks but no thanks, I am not ready to take a pay cut and live with real boring people with lack of choice in all aspects of life. If you move to Seattle or Austin, there are about a handful employers that you can hop to. You will finish all your career choices in about 5 years, then what? VCs are shutting down all offices throughout the US except for two locations: Boston and Bay Area, that tells you where the jobs are. Boston ain't cheap either, for a good reason.

There are plenty of places with Trader Joe's and Wholefoods, but there are not so many places with such an abundance of ethnic foods and interesting people from all around the world. I am just not going to consider Chilis and Applebees eat-out experience.

A friend of mine moved to Texas and traded up from his 1500 sqft shack to a 5000-sqft mansion. But he regretted very much about the move and has been looking for every opportunity to come back, which he can't, because the area he desires in BA holds value much better than his location in TX. Yeah, you get a 5000 sqft mansion and that is pretty much where you are going to be spending ALL your time outside work, because you cannot possibly go out where the land is as flat as a pancake at 100+F throughout the summer. Let's not even get into his heating and air-conditioning bill, without which he cannot possibly survive.

Kevin, I also have a friend who moved up to Google's Seattle office, which according to him is a stupid career move because it is much harder to get promoted there given the size of the team. The choice of projects that he can work on is also seriously limited, let alone building relationship with some core people who are based in HQ. But he likes the city well enough to compensate for the career setback, and his wife is from the area.

I am just not going to consider Chilis and Applebees eat-out experience.

Nobody actually eats at these places. I have lived in both Seattle and Ausitn, and neither of these places were going concerns. Maybe Tacoma?

A friend of mine moved to Texas and traded up from his 1500 sqft shack to a 5000-sqft mansion. But he regretted very much about the move and has been looking for every opportunity to come back, which he can’t, because the area he desires in BA holds value much better than his location in TX

I don't understand people who move from California for the sake of upsizing in a different part of the country. Seems like such a person was pretty feint-hearted about California to begin with. Hell, move to Ohio and live like a King!

.

..real boring people with lack of choice in all aspects of life

There's boring people everywhere. As far as Seattle or Austin are concerned, I think both cities possess a vibrancy and a landscape that many other more manufactured cities seem to have gone out of their way to pave over, and both cities are full of people who really seem to *want* to be there - meaning, they're not just there because it's cheap or because it's sunny & funny all the time. It's easy to like and live in a city like that...maybe too easy.

That said, NOBODY in any city of any state is going to embrace you if you move there and try to recreate your own little atomized poor man's California. You will be reviled. California works great in California. Let's keep it in context.

...I am not ready to take a pay cut

Also, pay cuts are relative to region and situation.

...and by the way, is a place a shack because it's 1500 sq ft? Or was it a dump that also happened to be 1500 sq ft.

Who the f--- needs 5K sq ft?

OO says

Weather aside, other states simply suck in terms of job prospect.

Unless you're a software engineer, the job prospects in the bay area aren't exactly stellar. My wife can't find any job that pays well enough to cover the cost of child care here.

Some Guy says

"I’ll agree with that. I would love to move back to the Bay Area. I wish I had never left. I applied for a few jobs in a field that ought to pay decently. Got a call back from one firm to set up an interview. I asked what they were paying, and they said, “35 to 40 thousand a year”. I almost laughed. Where would you live, in a cardboard box? Maybe I could rent a room from that Russian guy who paid 500K for a house in the West Oakland ghetto."

imo, here in the BA, there is a war going on and its been going on since the '90's - between the real estate industry and business/employers.
imo, the tac strategy goes like this:

Employer to HR: "If we reduce the pay, eventually housing costs will come down, it's just a matter of when. If there's no one paying $1850/mo for a lousy studio built in 1962 in Mountain View on Middlefield, then *eventually* the property people will have to reduce their rental rate."

RE Industry and LL Associations: *Blinks to the above threat*.... and continues on with the rent/housing increases until a total crash occurs.

Here in the BA, the crash is occurring and rents are coming down, slowly, but they are being reduced.

Looked on CraigsList recently? 100's of pages of rentals for South Bay and the Peninsula.

I moved back not just because my assignment ended but I was glad to leave simply due to the fact that the RE Industry out-of-State is much much slower to catch on to the new realities in housing as opposed to here in Cali where one CANNOT AFFORD to carry on for more than a few months the same drill in the face of financial destruction.

In flyover country, my rent was going UP -even in 2007, 2008, and 2009, - as opposed to staying at least level. My LL (a total doofus and a real estate agent) raised my rent $100 per month for 3 years IN SPITE OF AN ECONOMIC COLLAPSE IN THIS COUNTRY THAT RIVALS THE GREAT DEPRESSION.

~Misstrial

Honestly, if you are doing a job that can be easily outsourced to people in Vietnam, India or China, you should not be living in California, or to be precise, you shouldn't be living in the US. But there are always the kind of core jobs that cannot be easily outsourced because people in the other parts of the world simply lack the skills.

But I admit, you really have to be a world class player in almost any field to live a decent life in California. But this is not just California, this is the world that we are living in, middle class is disappearing, the kind of middle class we had since the end of the WWII was just an exception in human history. We are returning to norm.

"We are returning to norm."

Please, tell us more drivel. Tell us what "norm" is. I never liked him anyways.

Also, what are these "core jobs" are, and why we can't outsource them?

Outsourcing is a joke. Do japanese outsource there jobs. Do german outsource there jobs. NO!! but they build better cars than US. US outsourced jobs for the car industry and see where it lead us. The outsourcers are the idiots. They are the money grubbers. They only care about money. They are the financials types. We need to outsource the banking system to austria. The only people who think outsourcing is good are the arrogant jerks of our society.

[Quote] I had a wonderful time trying Hollywood (you have no idea how hard it is to become a paid actor, and I threw tens of thousands of dollars at the best training money could buy) and now HAVE to leave because it’s too expensive to stay.[End Quote]

chrisborden:

Thanks for sharing your experience. You should really have a website for those considering acting in L.A. in order to share your experiences and insights. Could really save some folks a lot of money, imo.

Amazing how many come out here in order to enter entertainment or modeling and wind up doing porn in the San Fernando Valley instead.

~Misstrial

If you look at what's "normal", maybe we should go back to serfdom and slavery. Maybe no electric lights or hot water? We have what we have because we're the most productive people on the planet PERIOD. Someone comes up with a tractor or an assembly line robot its going to put a lot of people out of work, that's a given. There's no way to keep the jobs here, not when we make 70x their salary.

If Chindia wants our 40 yr old machinery let them take it, because we invented the f**king thing and we already know how to do it better, but why bother when they'll take our green-colored toilet paper and make it for us?

chrisborden says

Dear Misstrial, I’d love to share my experiences. I went in with the idea that I could buy a dream, but it seems I had a few things against me, namely my age, an unattractive smile (due to poor parents who couldn’t afford dentistry, even in the 60s) lack of drive and ambition (rejection got boring after the first year), even higher cost of living down there (not that I didn’t know that either), and the biggie: Eventually I told myself that I really had little talent (and some of my auditions showed it). Bottom line: It was a hoot. At least I landed an agent and DID earn some money at it ($900). And I got to be on screen in an episode of “The West Wing” (Hubberts Peak, 11/17/2004). People actually called me that they saw me, as I never told anyone I was going to be on! I would not recommend a run at Hollywood for anyone over 25, especially if you are white and blonde.

chrisborden says

Dear Misstrial, also bottom line: I’m boring, just a straitlaced (spelled correctly) semiconservative middle of the road middle aged burned out white guy who lives a nondescript, orderly, sober, frugal life (and I know CA from stem to stern, too).

chrisborden: No worries, just that I think you have a compelling story, and if you're a journalist, well, you may be able to articulate your valuable experiences better than most :)

Thunderlips11:

May want to take note that the H-1Bs are leaving the SV due to layoffs that are affecting them too. Other H-1s are leaving because they perceive that their fortunes would be better met in Asia as opposed to here.

Went down DeAnza Blvd in Cupertino to Saratoga a few weeks ago and an entire strip mall that used to be filled with Asian businesses is now vacant.

The Asian businesses in particular that catered to solely Chinese/Korean/Vietnamese clientele are being really hard hit by this Depression simply because they made the mistake of wanting only a particular ethnic/racial group as customers. And now, in order to make it, they need caucasian customers, however, they have established themselves as an "Asian-only" business to their downfall.

In order to change, they'd have to redo their outdoor signage, their language capabilities in rder to communicate with customers, and their product lines and to do that, they need capital which is hard for most independent businesses to get these days. So their racial preferencing has really come back to bite them....

~Misstrial

Well, if you are one of a dozen people in the world who knows how to do a very well defined piece of critical task you can ask for 70x of Chindian pay. The rest of us will just have to deal with our converging standard of living with those in Shanghai or Mumbai. But don't worry, their standard of living is rising, so we don't need to sink that far.

The polarization of wealth and power is really a doing of lazy Americans who have been quite brain dead for the last couple of decades. You and me, whoever have the right to vote, allowed this to happen, and our ancestors allowed serfdom and slavery to happen. Laziness is the norm of human nature, and when we are collectively lazy, we sink into a bi-polar society because the very few that can still think start to take advantage of most of us who choose to let someone else do the thinking.

Just looking back at our history, we were stuck in rich-poor divide most of the times, with sparkles of more equal distribution of wealth, usually as an immediate reaction to extreme rich-poor divide, but they never lasted.