July 22, 2006

South Bay rents rising fast

MercuryNews.com | 07/20/2006 | South Bay rents rising fast
Rents at San Jose-area apartment complexes rose more this spring than at any time since the peak of the tech boom.

Landlords no longer need to woo customers with a free month’s rent or a DVD player. Rent for apartments in large complexes rose 9 percent compared with a year before, the biggest jump in any of 29 cities in California and elsewhere studied by RealFacts, a Novato company that does research for the apartment industry.

The average monthly rent in the area was $1,414. Palo Alto was the most expensive city at an average $1,929, and Campbell the least at an average $1,231.

A revitalized local job market and rising home prices are two factors driving the rental market, said Caroline Latham, owner of RealFacts. With higher prices and mortgage rates making homes less affordable, there’s increasing demand for rental housing.

“This has been a very weak market until maybe about a year ago,” Latham said. “We’re finally catching up in San Jose” to the rental rate growth that Southern California, for example, has experienced for the past few years.

I guess there wasn’t a housing bubble after all! At this rate, in just a few years, those $500k condos won’t be so laughable! Heck, maybe the $829k condo that used to rent at $2550 might make sense!

Indeed it looks like we’re in a soft landing.

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