This correlates with my recent experience trying the SWE job market (in the U.S.)
Only offer I got was a lowball. Received a surprising number of rejections on technical interviews. 3-4 rounds is common. The bar today is set significantly higher than it was in past job searches.
Most teams where I work are only hiring for staff and occasionally senior. Overall - not a candidates' market.
I a high interest environment we will see more compression. Ie. Fewer multiples between the lowest paid people and the highest paid people (median for a role).
The pay is largely going to be set by demand. But also: The sector has been ramping up salaries since the mid aughts, and I've found different people have different ideas of what the inflection point was in technology where it become prestigious/highly paid.
For me, I feel like things really heated up in the the 2010s. But there are others who I think would walk away from this industry if they got paid, adjusted for inflation, like it was 2015. As someone who cut their teeth in the wake of the dotcom crash, I look at the early 2010s as the halcyon days even tho pay got A LOT better - but I feel like that period struck a really good balance. If all you know is the white-hot market of 2019-2021 I suppose everything else looks like a massive downgrade.
(Not implying any of this relates to your experience, just giving my 2 cents)
Some companies were throwing money at anyone who knew what a text editor was during Covid. And now they're happy to pretend like they only accept the very best, and use that as an excuse to low-ball/down-level. When it flips to an employee market, don't crow about retention difficulties.
Everyone are trying to find the slightest argument that their mortgage will go down a bit soon and we can continue to see extreme asset price inflation.
Personally, I believe these strong sentiments and beliefs that the market can only go up needs to be reversed before we will see any material change.
There are more people in the world, I've been born when population was 5 billion and something, now we're at 8. City centers or good locations remain the same and don't magically expand or spawn out of blue, what is growing is mostly less interesting stuff due to distance to good stuff. You would have to battle hard, really hard, to just counter this force in economy.
This ignores massive push for people moving due to work, so in better places there is exponentially more interested people than space available. Just look at SF or NY is we talk about US.
Plus add strong emotions, most world population simply wants to live in their own, renting is frowned upon, despite ie Switzerland having very low home ownership, population is one of happiest globally and nobody here bats an eye, there are more important matters in our short lives to focus on than gathering as many available resources in some rat races.
I am talking about national median housing prices. Ie. Outliers like SF or NY won't even be visible in these statistics.
(also, I personally am speaking from an EU perspective, where my expressed opinion is the same).
But tell me: are you arguing that we see a general willingness to spend a larger roprtion of disposable income on housing, and that this is a permanent trend (due to the dynamics you emphasize).
Since housing has virtually no upper-limit on what you can spend, it can absorb any disposable income from other things getting cheaper (food, technology, etc.).
Yes, so historically it has been a rule of thumb that this is a third of the disposable income.
What a am considering is whether people are ready to move that to half? Two thirds?
My own assumption is that people are willing to do this as long as they believe that the house will be a good investment. But houses can never be a long term good investment. It will always converge to inflation.
> ... making it pointless to live in a big city with HCOL
I don't think most people choose a place to live strictly based on the location of their employer. They enjoy being in a city for its food, entertainment, and accessibility.
Good cities have limited space so I expect the demand will only increase over time, until the population tanks.
Yes, but if employer isn't the deciding factor, people can live where they want and spend time in cities (of their choice) on vacation, working remotely, etc. That's the conclusion I came to.
My theory for Tokyo is that its relatively low housing costs come from lax enforcement of zoning and building regulations, and lax enforcement comes from a culture of trust that doesn't exist in other comparably big cities.
Yep, after 15 years of the market beating records after records, and an incredible amount of money printed and ongoing bubbles not popping by QE, people forget that the market can go down, so the value of their overpriced property.
When they paid $2M for a house in SF 2021, and their whole family is laid-off and nobody is hiring as the economy is going down the drain... good luck on believing that your house that costed maximum 300K to build will still be worth 50% than what it was...
When you buy real estate you're mostly paying for the value of the land. Sometimes I'd even say the land might be worth more if there wasn't already a house on it lol.
Nope, in most of the US (so, not NY/SF and big centers), which has the most land, land is really cheap and the costs to build the house is the highest.
Also in a lot of places in the world is like this.
I'll suggest neither of us are actually right anyway. A raw piece of land that was never setup for building a house on would definitely be worth less than a piece of land that was ready for a house. Especially if it had city water/sewage, power lines, fiber for internet, etc. Add in school districts and whatever else, and again the land becomes more valuable. So having a piece of land with a house on it might be worth more than an empty piece of land - but that comes back to location! A piece of land in the middle of a developed city would be worth more than a random piece of land in rural Ohio.
Anyway, I still think it tracks. In my town an empty house-sized plot of land with utilities would probably cost similar to a house (maybe minus that $300k cost to build a house).
When I bought my house in 2009 people thought I was NUTS. In the thick of the GFC, house prices stagnant. Why would you ever buy a house now?! It has tripled in value, and buying a house was by far the best decision I ever made in my life.
I see houses bought in 2006 and sold in 2015 with a loss (in capital cities).
The thing is, if you entered the housing market in 2006 you would be set significantly back. If you entered in 2009 you would be at advantage.
People are betting on which of these cases we are in now.
Anyhow, when people think you are nut for buying, it is probably the right time. Currently the FOMO is real and everybody are recommending me to buy. I take that as an indication of over optimism, which is factored into the price.
> People are betting on which of these cases we are in now.
Very, very few US homeowners are betting on profiting from home price changes within 10 years.
They are betting on reducing monthly shelter cost volatility, and the freedom to modify their home, by purchasing a home with a very long fixed rate mortgage and maybe selling after a couple decades.
Note that this is not the same worldwide - for example, in the UK mortgages are typically not fixed rate for a long time, and so interest rates are a much more useful tool for the Bank of England to cause economic pain.
People will tell different stories about them entering into the housing market based on them entering in 2006 and 2009.
Someone loosing 15% equity on a geared investment over 10 years are probably not going to say "buying a house was by far the best decision I ever made in my life".
I know it's trendy to be a doomer these days but sub-4% unemployment rates for over 3 years with high earnings is a pretty good place to be, even if inflation was too high for some of that stretch.
This is also before the Fed lowers rates, which while not assured in the near term, will happen eventually. Can't fight structural demographics with an imaginary number.
A complete aside: I am wondering what the end game here is. If money are totally reducible to labor, but we just don't need labor anymore? Will we merely go one with negative interest and qe?
> Bond traders are tilting dovish again, piling into wagers that would benefit from a faster pace of Federal Reserve interest rate cuts as Treasuries rally.
> “The next move that the Fed is going to make is ultimately going to be one that protects the strength of the labor market, rather than one that in which they need to be fighting inflation,” Kelsey Berro, fixed-income portfolio manager at JPMorgan Asset Management, told Bloomberg Television Tuesday. “We do think that inflation generally is under control.
Collapsed is a bit dramatic - not sure where your job posting stats are coming from but this is another area the BLS tracks - down from 2021 but still very healthy considering the extremely low unemployment rate:
All ‘information’ jobs which is a superset for most tech roles. One more data point against the collapse narrative is that we’ve never had so many software developers working in the US: https://fred.stlouisfed.org/series/IPUJN5112W200000000
n = 1 but I'm personally seeing an uptick in recruiter outreach and relevant job postings (producty software eng roles.) I've also been hearing about fewer layoffs or prolonged job searches in my network (my network is mostly experienced devs living in tier 1 tech hub.)
Do these BLS statistics reflect “real” jobs, in the sense of what an average older American thinks a job provides, or are these mostly new economy “jobs”, with poverty wages, no healthcare, retirement funding, etc?
My sense here in NYC is that there is a surplus of minimum wage warehouse, retail, and food delivery level job openings concurrent with a de facto white collar and career-track blue collar hiring freeze.
Also in the NYC area. There seems to be a major shortage of blue collar labor: contractors, carpenters, plumbers, electricians, etc. the cost of home renovations is truly staggering due to this lack of supply.
So I work in tech but am pretty well-connected to the trades within my family and friends group. The major shortage in every trade is in helpers and laborers. It’s not the case that they need people with journeyman-level technical skills, are willing to offer lucrative TC, and simply can’t hire for the skill set.
They can’t find unskilled/semiskilled labor willing show up to a job site every day for $25/hr cash. Even 10 years ago this wasn’t a problem. The issue is that nobody wants to offer market-clearing wages and benefits because it cuts into the owners’ distribution.
We're asking businesses to make additional payments to their employees' landlords. If rents were lower $25 would be a good wage to live on, but given the cost of housing, we're all paying out to landlords, even homeowners.
57 comments
[ 3.5 ms ] story [ 110 ms ] threadOnly offer I got was a lowball. Received a surprising number of rejections on technical interviews. 3-4 rounds is common. The bar today is set significantly higher than it was in past job searches.
Most teams where I work are only hiring for staff and occasionally senior. Overall - not a candidates' market.
Maybe expectations are unreasonable?
I a high interest environment we will see more compression. Ie. Fewer multiples between the lowest paid people and the highest paid people (median for a role).
This will of course cause their good devs to leave, but I guess these days companies are trying to innovate in AI rather than software dev.
Once the AI bubble bursts I doubt we'll see a reset back to pure software dev being prestigious/highly paid. Thinking about a career change honestly.
Salary for the highest paid people is a comparative good. If I pay you 10x you current salary I don't get 10x the innovation.
Also, compression also means that the slowest paid people can get salary increases (to cover the increased mortgage costs) - it will be a mix.
(not entirely knowing your own situation, not taking a "low ball" offer can leave you worse of, if the alternative is no income.)
See this for discussion: https://danluu.com/bimodal-compensation/
The transition is awkward as you'd expect, and jobs are stratifying.
For me, I feel like things really heated up in the the 2010s. But there are others who I think would walk away from this industry if they got paid, adjusted for inflation, like it was 2015. As someone who cut their teeth in the wake of the dotcom crash, I look at the early 2010s as the halcyon days even tho pay got A LOT better - but I feel like that period struck a really good balance. If all you know is the white-hot market of 2019-2021 I suppose everything else looks like a massive downgrade.
(Not implying any of this relates to your experience, just giving my 2 cents)
Taking 3-6 months to get a 6-figure job is the norm in many other professions.
Some companies were throwing money at anyone who knew what a text editor was during Covid. And now they're happy to pretend like they only accept the very best, and use that as an excuse to low-ball/down-level. When it flips to an employee market, don't crow about retention difficulties.
Personally, I believe these strong sentiments and beliefs that the market can only go up needs to be reversed before we will see any material change.
This ignores massive push for people moving due to work, so in better places there is exponentially more interested people than space available. Just look at SF or NY is we talk about US.
Plus add strong emotions, most world population simply wants to live in their own, renting is frowned upon, despite ie Switzerland having very low home ownership, population is one of happiest globally and nobody here bats an eye, there are more important matters in our short lives to focus on than gathering as many available resources in some rat races.
(also, I personally am speaking from an EU perspective, where my expressed opinion is the same).
But tell me: are you arguing that we see a general willingness to spend a larger roprtion of disposable income on housing, and that this is a permanent trend (due to the dynamics you emphasize).
What a am considering is whether people are ready to move that to half? Two thirds?
My own assumption is that people are willing to do this as long as they believe that the house will be a good investment. But houses can never be a long term good investment. It will always converge to inflation.
Not to mention how many people now only want to work from home, making it pointless to live in a big city with HCOL.
People have trouble to understand that shit can't go up forever...
I don't think most people choose a place to live strictly based on the location of their employer. They enjoy being in a city for its food, entertainment, and accessibility.
Good cities have limited space so I expect the demand will only increase over time, until the population tanks.
Tokyo would like to say hello. IIRC, it’s the only place in Japan with a net population growth, largely due to people moving in for work.
The situation is dire elsewhere because many people are taking completely absurd and/or selfish stances on development in their locale.
When they paid $2M for a house in SF 2021, and their whole family is laid-off and nobody is hiring as the economy is going down the drain... good luck on believing that your house that costed maximum 300K to build will still be worth 50% than what it was...
When you buy real estate you're mostly paying for the value of the land. Sometimes I'd even say the land might be worth more if there wasn't already a house on it lol.
But the value of the land is also not given.
Also in a lot of places in the world is like this.
I'll suggest neither of us are actually right anyway. A raw piece of land that was never setup for building a house on would definitely be worth less than a piece of land that was ready for a house. Especially if it had city water/sewage, power lines, fiber for internet, etc. Add in school districts and whatever else, and again the land becomes more valuable. So having a piece of land with a house on it might be worth more than an empty piece of land - but that comes back to location! A piece of land in the middle of a developed city would be worth more than a random piece of land in rural Ohio.
Anyway, I still think it tracks. In my town an empty house-sized plot of land with utilities would probably cost similar to a house (maybe minus that $300k cost to build a house).
I see houses bought in 2006 and sold in 2015 with a loss (in capital cities).
The thing is, if you entered the housing market in 2006 you would be set significantly back. If you entered in 2009 you would be at advantage.
People are betting on which of these cases we are in now.
Anyhow, when people think you are nut for buying, it is probably the right time. Currently the FOMO is real and everybody are recommending me to buy. I take that as an indication of over optimism, which is factored into the price.
Very, very few US homeowners are betting on profiting from home price changes within 10 years.
They are betting on reducing monthly shelter cost volatility, and the freedom to modify their home, by purchasing a home with a very long fixed rate mortgage and maybe selling after a couple decades.
That is certainly one of the cool things about entering the housing market: Now you are a monetary instrument.
People will tell different stories about them entering into the housing market based on them entering in 2006 and 2009.
Someone loosing 15% equity on a geared investment over 10 years are probably not going to say "buying a house was by far the best decision I ever made in my life".
That's plainly not true where I'm from.
https://fred.stlouisfed.org/graph/?g=1otVt
and we're still near historically low unemployment rates;
https://fred.stlouisfed.org/graph/?g=1otVI
I know it's trendy to be a doomer these days but sub-4% unemployment rates for over 3 years with high earnings is a pretty good place to be, even if inflation was too high for some of that stretch.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch...
https://www.bloomberg.com/news/articles/2024-03-24/fed-s-pow... | https://archive.today/YZXrL
https://www.federalreserve.gov/mediacenter/files/FOMCprescon...
> Bond traders are tilting dovish again, piling into wagers that would benefit from a faster pace of Federal Reserve interest rate cuts as Treasuries rally.
> “The next move that the Fed is going to make is ultimately going to be one that protects the strength of the labor market, rather than one that in which they need to be fighting inflation,” Kelsey Berro, fixed-income portfolio manager at JPMorgan Asset Management, told Bloomberg Television Tuesday. “We do think that inflation generally is under control.
https://www.bls.gov/charts/job-openings-and-labor-turnover/o...
- software engineer job postings are down 70% year/year
- product manager job postings are down 90% over the past 2 years on LinkedIn
Jobs: https://fred.stlouisfed.org/graph/?g=1oue8
Job openings: https://fred.stlouisfed.org/graph/?g=1oudP
https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE
I should have been clearer. They made claims about specific jobs. You replied with data about all jobs in a collection of industries.
And the collection of industries isn't even limited to what people would call tech companies in fact.
> One more data point against the collapse narrative is that we’ve never had so many software developers working in the US: https://fred.stlouisfed.org/series/IPUJN5112W200000000
This showed companies classified software publishers employed more people than ever. Your claim could be true. But the chart showed something else.
May 2024: 742 / 422 (1.76)
May 2023: 502 / 366 (1.37)
May 2022: 835 / 274 (3.05)
May 2021: 919 / 235 (3.91)
May 2020: 685 / 324 (2.11)
Note May 2024 was a 12-month high for job postings. But also note Jan 2024 was a 9 year low.
My sense here in NYC is that there is a surplus of minimum wage warehouse, retail, and food delivery level job openings concurrent with a de facto white collar and career-track blue collar hiring freeze.
They can’t find unskilled/semiskilled labor willing show up to a job site every day for $25/hr cash. Even 10 years ago this wasn’t a problem. The issue is that nobody wants to offer market-clearing wages and benefits because it cuts into the owners’ distribution.