The recent tech boom has propelled average property prices in San Francisco’s Silicon Valley to above the $US1 million mark.
Similar to what’s being witnessed in Sydney, that surge in the property market has caused as much anguish to those trying to break into it as it has joy to those profiting from it.
But today, the Smithsonian Magazine is running an extraordinary reminder of a time worth thinking of whenever we talk about a “boom” – the Gold Rush of 1849.
First of all, there was the same opportunism (“market forces”) evident today in San Franciscan grocery bills and rents soaring to 21% higher than the US average.
Well, not quite the same – in 1849, you could be charged a dollar for a slice of bread, and double that if it were buttered, according to the Smithsonian.
In today’s money, that’s about $US56.
It was known as “mining the miners”. One entrepreneur brought 1500 old newspapers over with him from the eastern states, and sold the lot for $US1 each ($US26).
A simple Gold Rush breakfast for two might set you back around $US1200 today.
Crazy, but keep in mind the kind of cash that was pouring out of the goldfields. When the SS Central America went down in a storm, it took with it enough Gold Rush gold to spark the Panic of 1857 – about $385 million worth.
So, about real estate in 1849.
Bayard Taylor headed west to write dispatches for the New York Tribune.
That was in the summer and hotel rooms were going to gamblers for the equivalent of $US300,000 a month.
In the autumn previous, one citizen who had died had done so insolvent to the amount of $US41,000, but with some real estate to his name.
Here, according to Taylor, was how much the market had changed in the six months since the citizen’s death:
“His administrators were delayed in settling his affairs and his real estate advanced so rapidly in value meantime that after his debts were paid, his heirs had a yearly income of $40,000 ($US1.2 million today).
Now that’s insane property prices.
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