Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: David Jones who wrote (5690)	9/29/2002 8:23:11 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 306849

...rents collapsing in silicon valley, down 40-50% from peak.... And you know this number is correct because? Well... since statistics are difficult to come by, let me try to piece the puzzle together. As a hiring manager who had to find apts for my incoming staff in 99, I KNOW that rents have declined by 50% for the plum areas of SV. Back then luxury 1br "apartment homes" were going for $2600/mo... if you could get one. Today I can get the same for $1500. (but of course, with no hiring and no H1Bs I have no use for these). You aren't actually questioning the collapse in SV rents are you? There are numerous sources that outline the decline for any number of specific regions/time periods... I just can't find anything specific for Santa Clara/San Mateo from mid-2000 to present. Imo we have had back to back 20% declines in rents for 2001 and 2002 in the high end "tech ready" apts, san jose/santa clara/san mateo. Thats what it seems like anyway... here are some statistics from varying periods- Starting from 2000(somewhat close to the peak) Apartment rents decline in Silicon Valley Sharon Simonson The rapid rise in Santa Clara County apartment rents enjoyed by landlords in the second half of 2000 have become distant memories, according to the newest market information from Novato-based RealFacts. The county's apartment rents have now fallen for three consecutive quarters by an aggregate of more than 14 percent. The average rent in Santa Clara County fell from a high of nearly $2,000 a month at the beginning of the year to less than $1,700 in the third quarter. sanjose.bizjournals.com The largest rent declines were in Milpitas, where the average rent fell $226 during the July to September quarter, RealFacts found. The smallest declines were in Gilroy, where they fell $26. The above article includes outlying areas like Gilroy which skew the results upward, its actually worse in the center of SV. But anyway just to be conservative rents down 14% in 2000. Now onto 2001- present- S.J. leads in rental building siliconvalley.com San Jose is expected to add far more new apartments over the next four years than any other city in California, Assuming these new apartments all get built, it could have an impact on rents, which have plunged nearly $400 a month over the past year to their current average of $1,355. Thats an additional 23% off the initial 14% decline from the article above. Here's another, different source, for 2001 only. (imo, 2002 has been worse than 2001, but anyway this one says down 22% in 2001) SAN JOSE LEADS THE WAY....UNFORTUNATELY....DOWN Rents are still tumbling in Silicon Valley. Our December 2001 survey of 412 apartment complexes in Santa Clara County indicated that rents fell by 10.6% between September and December. This is the largest single drop since RealFacts started collecting data on the area in 1989, and it follows two previous quarters of decline. For 2001, rents in Silicon Valley fell a total of 22.1%. realfacts.com SILICON VALLEY RENTS CONTINUE TO DECLINE. Rents in the San Jose MSA declined again in the third quarter of this year, by nearly 7%. This decline comes on the heels of a similar drop in the previous quarter. What will happen next? Occupancy rates often give us a clue. For example, the highest occupancy rate in this MSA came in June 2000, at 99.4%, and that was followed by two quarters of extraordinary rent growth. The occupancy rate has just fallen to its lowest point in the past decade: 93.3%. That drop suggests that the San Jose MSA is likely to show further rent declines. realfacts.com