San Francisco Real Estate and Market Clearing Prices
http://www.businessinsider.com/graphic-shows-out-of-control-san-francisco-housing-prices-2016-8
This article on exorbitantly expensive San Francisco real estate reflects the lack of a market clearing price in SF’s housing market. In an ideal market, there should be a market clearing price that should allow every buyer to get something at the end.
This is not the case of San Francisco. Here, the influx of massive amounts of capital through the area’s burgeoning tech industry has not only increased the number of buyers but increased the minimum price for almost all houses in the area. This has come to the point where a mass exodus of longtime San Francisco residents has come out of the city, citing higher rents and increased cost of living as the reasons for their departure.
In effect, these residents are seeing their net values on the San Francisco housing market become negative for all available products and therefore making them unable to match with any piece of real estate.
In order to alleviate this problem, San Francisco needs to either dramatically increase the number of available housing units they have on the market or force prices to go down, both of which are imperfect solutions to the problem.