For San Francisco Bay Area, the heart of booming high tech industry, it seems that the sky has (again) no limit. The huge influx of venture capital has started a trend where for the past 3 years young professionals are flocking to get a coveted Software Engineer job with a promising and well funded startup.
That is great news except for the housing market.
Bay Area rents have seen a whooping 25-30% increase in December 2014 vs same month of previous year. That adds to an overall upwards market sentiment that pushed rents higher each month over the previous one for whole 2014.
Surprisingly, or not due to rent control, the city of San Francisco where most of the high tech boom seems to cluster, the rent increases appear to be somewhat flat, with increases in the mid single digits.
That can tell one thing, that a lot of people working in the city, actually commute in and rent in the surrounding areas. This can be noticed by the fact the highest rent surges are in nearby cities such as Oakland, Concord and San Mateo, where the 2 and 3 bedrooms have hiked by 30-40% in 1 year.
The trend might be explained by the fact that having roommates is a very popular option in the tech crowded job marketplace, which pushes the 3,4 and 5 bedroom rents sky high. In the end, each roommate ends up paying a smaller rent than securing their own 1 bedroom.
Everybody screams "tech bubble" What's your take on it?
I can vouch 1st hand for this article. I just moved to South Bay in April with a young family. For the first 3-4 months I rented a room for myself while I established my bearings. Lived the college lifestyle in my mid 30's was a humbling experience with 2-4 roommates. Finding and competing for housing for my entire family was another challenging experience. The costs are extremely high and market is very competitive for all housing buy and rent. Its very much a favorable market for landlords and home owners at the moment.
I don't think rent control factors into techies living in the city. What drives techies to the city is the lack of housing near job centers on the peninsula, and how much nicer SF is compared to Mountain View, and San Jose.
There's the social vibe and after hour meet-ups in the city that makes your pros don't wanna commute. I'm part of that vibe, it's amazing and makes the crowd "irrational" vs renting.
But, the up-trend is not in SF city. in fact the city has remain mostly flat through all 2014 every month. It's the 30 min via Caltrain of BART "burbs" that exploded in rent amounts. :)
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