Let’s have another buy vs rent thread with this latest News of the Obvious from what’s little is left of our local newspaper.
By Pete Carey, San Jose Mercury News
Posted: 07/21/2011 12:01:00 AM PDT, Updated: 07/21/2011 10:07:26 AM PDT
Bay Area apartment rents are on the rise, fed by the contrasting economic forces of a booming tech recovery and the steady flow of foreclosures that is turning former homeowners into renters.
The San Jose metro area, which includes Silicon Valley, weighed in with the highest average rent — $1,759 a month — among 43 metro regions monitored by RealFacts, a Novato apartment rental research company that released a report on second-quarter rental prices Thursday. The region also saw the biggest year-over-year increase, up 12.6 percent.
The San Francisco metro area — encompassing the Peninsula, East Bay and Marin County — had the second-highest rents in the survey, at $1,644, and the third-highest year-over-year increase, at 7.6 percent.
Rents are a barometer of the region’s economic vitality and job market, and after several years of stagnation, this year they’re pointing to recent job market gains. But they also signal the continued weakness of the housing market, with stiff competition for rentals throughout the region.
That opening paragraph observes that rent going up isn’t only driven by new jobs being created by tech firms: it’s also due to new renters being transformed from former homeloaners. So what are you seeing where you live? Are your new neighbors former owners who now rent, or former renters who can now own? Is your firm hiring or cutting back? Is rent going up where you live? Are house rents going up as quickly as apartment lease rates?
If you want to get into the apartment rental business, you could look to East Palo Alto, where up to 1,800 rental units are about to change hands. The current owner, Page Mill Properties, defaulted on a balloon payment, and Wells Fargo is looking to sell the entire portfolio. East Palo Alto: Close to the new Facebook campus, plus rent control!
And while former homeowners may be looking to rent now, foreigners with suitcases full of cash are still buying up RBA property, supposedly.
Trulia, the online real estate information service, reports a big jump in searches for Silicon Valley real estate from other countries. Searches for property in Cupertino were up 90 percent in the first quarter of this year from a year earlier, Trulia reported. Palo Alto was up 121 percent; Los Altos Hills up 182 percent; Atherton up 68 percent and San Jose up 86 percent.
This is an Open Thread.