Housing Bubble: 3 factors that determines the rent prices

Instead of getting any further into that, this blog post exists to re-emphasize what his new data revealed: this chart

That, my friends, is 70 years of San Francisco housing prices. There are some ups and downs, but for the most part there is a very simple trend: 6.6 percent.

That’s the amount the rent has gone up every year, on average, since 1956. It was true before rent control; it was true after rent control. It wasn’t entirely true during the 2000 tech bubble, but it was still sort of true and it became true again afterward.

6.6 percent is 2.5 percentage points faster than inflation, which doesn’t seem like a lot but when you do it for 60 years in a row it means housing pricesquadruple compared to everything else you have to buy.

That’s bad. But that’s SF today, compared to 1956.

So what caused prices to go up? That’s the really exciting part of Fischer’s discovery. Armed with his data, he more or less answered that question. Continue reading