Friday, January 10, 2014

San Francisco’s New Gold Rush

WSJ's Sarah Tilton writes:

Twitter's headquarters. A high-rise apartment building where visitors sign-in on iPads. A jar of handcrafted applesauce for $14. Skyrocketing real-estate prices.

Nearly five decades after the Summer of Love transformed San Francisco into the epicenter of the hippie movement, a new generation is redefining this city's culture again. No longer content to live and work in the quiet suburbs of Palo Alto and Menlo Park 30 miles south, thousands of young tech workers are migrating to the city, seeking a more urban, multicultural lifestyle. They are bringing with them a stampede of tech companies and venture capitalists, and inevitably attracting some homegrown resentment for jacking up housing costs and gentrifying once gritty neighborhoods.

Last year, venture capitalist Greg Gretsch, managing director at Sigma West, which has $1.5 billion under management, moved his office from Menlo Park to San Francisco's Jackson Square neighborhood, a historic part of the city dating back to the 1850s that is now attracting the new digerati. He now walks to work from his Pacific Heights home and walks or bikes to visit startups in the South of Market, or Soma, district.

"Jackson Square is the new Sand Hill Road," says Mr. Gretsch, 47, referring to the road in Menlo Park that has long been at the center of technology funding. "I'm surprised by how infrequently I go down [to Silicon Valley] because I just don't need to."

The cost of living is high among the new tech class. The median sales price for homes in San Francisco jumped 16% in 2013, according to the San Francisco Association of Realtors. "It was a year of shocking prices," says Annie Williams, a real-estate agent with Hill & Co. in San Francisco. She ticks off the names of southern neighborhoods closest to Silicon Valley, such as the Mission and Noe Valley, that have been most affected by the tech boom. "It was shock after shock started by Zuckerberg." In 2012, it was widely reported that Facebook FB -0.19%  founder Mark Zuckerberg paid $9.9 million for a house in the city's Mission District. A Facebook spokesman declined to comment.

Read the rest here.

Note: Tilton's characterization of what is going on in SF is very accurate. I see the city changing on almost a daily basis. You see more and more young people on the streets who are walking with purpose and bring new energy to the city. The crazed lefties are trying to fight them off and are attempting to halt some new construction (with some success) but I think the flow of money and new blood will eventually wrest control of policy from the wackos--and SF could truly become a spectacular city over the next 5 to 10 years.-RW


  1. This sounds very similar to the late 90's Dot Com era, when real estate was bid through the roof both in Silicon Valley and SF area. The primary output is Social Media applications. One has to wonder if similar to the late 90's this sector at some point also implodes?

  2. "SF could truly become a spectacular city over the next 5 to 10 years"

    Wishful thinking I'm afraid. When the current Internet Boom 2.0 bubble bursts, it will leave SF with lots of empty overpriced apartments and cool-looking offices, and the leftie crazies will still be in power, for the simple reason of having their low-maintenance political base of drifters, "artists", government unionists and other unemployable or barely employable members of the free shit brigade.