Comment by bsder | Hacker News Reader

Comment by bsder | Hacker News Reader

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> This is a key driver of the continued climb of equity and real estate assets that seems to defy economic reality.

The real estate crash hasn't rippled ... yet.

Lots of younger people have moved home. High cost-of-living rental areas are going to lose those renters permanently. Once those younger people swallow their pride and move home ... there really isn't anything pulling them back.

Commercial real estate is like Wile E. Coyote running in mid-air trying not to look down. The commercial real estate has lots of empty spaces with no real prospect of refilling them ... yet they're placing those on the books by tacking them onto the end of the financing at the same level as they were when they were rented. That works great ... until the cash flow can't support anything at which point it all collapses together.

Of course, this is all going to hang together like the traders before 2008: "They're is a crash coming. If I'm right, it's almost impossible for me to diversify enough to survive because the trashing is going to be so thorough. If I'm wrong, I look like an idiot and lose money. So, I'll close my eyes and toe the company line and see if I can cash out before the devastation."

> Once those younger people swallow their pride and move home ... there really isn't anything pulling them back.

I just left a remote oriented(Major infrastructure automation startup) to work for a company in a HCOL area. Just completed the 2200 mile trek back from “home” with the pets and the family on Monday.

Anecdotal but the prospect of raising my kid in the middle of nowhere back “home” was not appealing. If I lost my remote gig I would have to take a 50% pay cut to hopefully find a job at one of a few employers locally- or pray I could get another remote gig in a very competitive job market.

Better nature, better job market and higher pay were a deciding factor. Just saying there are plenty of things that might pull a young person like myself and my partner back other than “pride.”

Sure, but your rare case is statistically atypical at the moment, and a reversal of the trend requires a major recovery that’s still very TBD.

I tried to acknowledge that by pointing out that it was an anecdote. My point was mostly that it is condescending and short sighted to think that young people’s decision about where to live boils down to pride.

> My point was mostly that it is condescending and short sighted to think that young people’s decision about where to live boils down to pride

And I would point out that it completely ignores reality to think that it doesn't.

For better or worse in the US, a single male living with his parents at age 25 or above will generally be regarded as a "failure". You can claim otherwise, but the dating pool disagrees with you strongly.

However, I will concede that your situation (under 30 with a child but still in a place like the Bay Area) was not really what I was thinking about. That's kind of a minority for most high tech/high-COL areas which are renowned for having a highly skewed male/female ratio.

I think "lots" is pretty load-bearing here. How many younger people, precisely, have moved back home? If half of them have, I agree that's a big paradigm shift; if 5% have, I'm not sure that adds up to something very far outside normal variability.

I would say a significant amount, I don’t have the article link on hand but U-Haul prices out of California are 10 - 40x the price the opposite direction. I was hit by this since we had planned to move out of state prior to what is going on (roughly a year ago) and needed to price it out. We’re still moving, just getting the trailer instead of the full truck and I’ll haul the stuff while my girlfriend and son fly out instead.

Over half. 52%, actually.

https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-...

That does not say that over half have moved back home since Covid. Read critically.

The relevant variable here isn't the headline 52%, but the fraction of young people who lived independently but have recently stopped, which is (52 - 47) / (100 - 47) = 9.4%. That's a big number, but I don't know that it's big enough to be the death of many cities - it seems plausible that those 9.4% could move back out over the next few years for the same reasons they moved out in the first place. (And remember that young people living independently are only a part of a city's population.)

Of course, it's likely that this impact isn't going to be uniform, so that doesn't mean individual neighborhoods (or even individual cities) have no cause for concern.

> How many younger people, precisely, have moved back home?

It appears like quite a few. I can see into a lot of different apartments from where I live in SF and many, many more are empty. This might also be due to AirBnBs.

The real estate rental prices have fallen, but they're still pretty sticky - I predict they are going to fall more.

The latest news that the majority of young adults in US live with parents.

https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-...

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