A guy just transcribed 30 years of for-rent ads. Here’s what it taught us about housing prices
Michael Andersen
3.4K222

Speaking as an economist, nothing in the chart surprises me. What it says is that a lot of jobs have popped up in SF and the living there is good. So a lot of people want to live there. This is demand. The high rental costs are a direct repsonse to that. As you recognize in your article, the primary thing to look at is what, if anything, is restricting supply. I would note that the New York chart is very similar to SF’s ( http://www.economist.com/blogs/graphicdetail/2015/11/daily-chart-0 ).

Rent control in all its forms distorts the market. I cannot speak to the particular flavor of rent control in SF, but if what is reflected in this article and comments is true, then restricting increases in rent for incumbant tenents would create a strong incentive to not move. This would decrease velocity. Decreased velocity is always negative to growth.

As to all of the scenarios ofered in your article … you are basically saying that anything that would make SF a worse pace to live would also lower housing costs (reduce demand) and anything that would drop more units on the market would also reduce housing coasts (increased supply). Well, that’s just common sense, right?

But, I agree that Eric Fisher deserves a drink or two on the house. In the world of economics, data base providers are our heroes.

Be well,

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