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Comment by sna1l | Hacker News Reader

I think the burst of tech workers moving out of Silicon Valley/SF into surrounding suburbs + other areas is driven mostly by people who were already on the cusp of leaving the city.

I've been thinking about leaving SF to move to the East Bay for the last couple years, and COVID-19 has provided a very strong impetus to expedite that move.

Obviously this is anecdotal, and everyone has their own motives, but I haven't heard of many 20-27 years BUYING property outside of their home cities (SF, NYC, etc).

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My wife and I never considered moving out, but we're now actively shopping for a house in the Tahoe area. Not as an investment or short term rental property, but to live ~50% of the time.

We're clearly not the only ones. The price of houses in the $1M+ range have gone up significantly since it became clear around the summer that this COVID thing isn't going away anytime soon.

There are many all cash offers as well.

How do you weigh the fire risk in the Tahoe area? The Palo Alto area has smoke risk, and some PSPS risk, but not much risk of straight up burning down. But homes in Tahoe are at significantly more risk of fire, right? Is it possible to get fire insurance there?

Riskier, sure. Insurance? Sometimes...

The person who bought my place last year ended up paying over $6000 a year for insurance via CalFAIR (no fire hydrant nearby). When I bought it in 2013 - it cost about $800 a year. There are definitely people who can't get regular insurance and end up paying a lot for meh insurance.

Do houses in those areas have built-in or compulsory fire protection systems? Some Australian rural houses have roof mounted sprinklers (exterior of the building), water tanks reserved for fire fighting, and so on. I did some drone work for an insurance company after our last fire season, and got photos of places where the fire had been stopped literally a metre short of a building. Either irrigated gardens, protection systems or fire fighters.

Insurance...

For one house that we were interested in, in an area that's not super risky (which is very relative), it's about $2500 per year through CalFAIR. That's only for fire, and doesn't include any other aspect of homeowners insurance.

Just a PSA: home insurance companies have been dropping fire coverage in CA so quickly now that there's a state-mandated stay to prevent them from doing it for a year.

No word what the plan is after the stay but I would be cognizant of any insurance plans that you get.

At some point we need the federal government to step in to provide wildfire insurance a la federal flood insurance. It will have to be reworked for CA considering the flood insurance only goes up to 250k.

Or we could incentivize people not to live in places with wildfire risk by NOT offering insurance (with some sort of graded phase-out for people already living there).

The federal government should not subsidize people to live in places so risky that private insurers refuse to offer coverage.

Don’t worry, California and other states with wildfire risk are not swing states so there’s not much chance of something similar to the NFIP being created.

My sense is that the folks buying $2M+ homes in the Bay Area or $1M+ homes in Tahoe have enough money in the bank that they could just rebuild in cash on the off chance that their home gets burned down. At that price point you're largely paying for the land. Cheap structures (which abound in Tahoe) can be built for ~$250K, while even a really fancy 4000+ square foot mansion in Los Altos can be built for < $1M. Most of the mid-level FAANG employees and ex-startup/growth folks easily have that much in liquid assets.

You’d be wrong.

It’s pretty easy to find prime plots of land in the Tahoe area for less than $250k.

The problem is building: there is a shortage of construction labor (they can’t afford to live in the area anymore), and the building season is short.

Building cost per square footage is higher than in the Bay Area, often exceeding $600/sq.ft.

I would guess that's pretty accurate. Either renters decamping somewhere cheaper/nicer/less crowded for the duration. Or people who were toying with moving out and switching those plans into high gear.

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