Moving Out

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This is a partial transcript of "The Big Story With John Gibson," December 29, 2005, that has been edited for clarity.

DAVID ASMAN, GUEST HOST: Wonderful cities like New York and San Francisco have always been big draws for young folks. But sky-high housing prices are now driving them — a lot of them anyway — elsewhere. Joining us now to talk about the trend is Forbes magazine staff writer and one of the stars of "FORBES ON FOX" every Saturday, Victoria Barret. Good to see you, Victoria.

Now, you live in San Francisco, right, but you don't own property, correct?

VICTORIA BARRET, FORBES STAFF WRITER: No, don't tell Wells Fargo that because I'll get a lot of mail. But no, I don't. Housing prices here are very, very expensive. And if you look at who is moving into homes in San Francisco, these are typically families in their 40s and 50s, not young families. Young people here tend to rent because you can get much more for your money.

And that's in fact kind of a national trend. It's kind of a P.E. ratio or weight of indexing how expensive homes are. It's 35 percent higher than the historical average. And that's comparing what it costs you to buy versus what it costs you to rent.

ASMAN: Right. Well, they're expensive in San Francisco, they're expensive here in New York. But in a lot of other places, they're not so expensive. People are moving to Sacramento, for example. Out on the East coast, people are moving instead of New York, they'll choose Philadelphia. There's a picture of Sacramento and Philadelphia is another nice place to live. So do you know folks who say, you know, "The heck with San Francisco, I'm moving out"?

BARRET: Well, yes. A lot of people are. And that's why San Francisco actually has some of the lowest child per capita because if you have a child here it's very, very expensive.

But what is enabling this is the World Wide Web. You can move to Philadelphia or Sacramento and even if your company isn't based there, you can probably work there. Take Bozeman, Montana. Bozeman, you know, 10, 20 years ago was a mediocre college town with decent skiing. Now there's a billion dollar software company based in Bozeman called Right Now Technology. And Right Now is selling to Beijing and Hong Kong and London and they can because of the Web. So people can work in Bozeman, have a high-tech motivated career path and don't have to pay San Francisco real estate. In Bozeman you can get double the house you could in San Francisco.

ASMAN: But there are places, I don't want to pick on any, well I'll mention a couple of places. Some folks there are going to be hard to revive, places like Detroit, for example. Everybody has tried it. They haven't managed it. Bozeman, Montana, is beautiful, surrounded by the mountain. But Detroit or Newark, New Jersey, here in the East Coast, I mean, there are some cities, it's going to be a tough sell.

BARRET: There are cities that are, you know, where industries used to be based, Detroit cars, you've got upstate New York, places like Albany used to be major manufacturing capitals, and they're not anymore, and they're not necessarily very desirable places to live.

So, certainly if you're a young person and say the hell with San Francisco, I don't think you're going to find a lot of opportunity or, you know, great housing in a place like Detroit unfortunately.

ASMAN: Now, what about rentals.

BARRET: But the amazing thing, people have the flexibility now that they can move to Portland, move to Bozeman.

ASMAN: What about rentals? You're renting and you mentioned maybe before we went on that you only have one friend in your circle that owns their own property in San Francisco, is that right?

BARRET: Yes. Because it's so expensive. And I know a lot of young couples in San Francisco, a lot with great, you know, great incomes quite frankly, but, you know, the bar you have to cross in order to own property here is just so darn high. And that's partly because there's so little supply. In San Francisco only 30 percent of the housing market is owner occupied. For the majority it's a renter's market.

ASMAN: All right. Well, despite all this bleak talk about ownership we're going to have a segment coming up a little later about how more people are owning than ever. Victoria Barret, great to see you. I'll see you at "FORBES ON FOX" on Saturday morning 11:00 a.m.

BARRET: See you then.

ASMAN: Take care.

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