Tuesday, May 27, 2008

Apartment Insights Silicon Valley

Larry Losness spoke today at the 2nd inaugural meeting of the CCIM Silicon Valley group. Some interesting points from his presentation on apartment properties:

Only 30 duplexes closed escrow in 2008 so far - 495 had closed in 2005
Only 22 fourplexes closed escrow in 2008 so far - 316 in 2005
188 duplexes on the market in the county
102 fourplexes on the market in the county

Rents going up
Vacancy at 3.2% average across the valley
Housing affordability gap of rent vs. mortgage is the spread between average rent of $1,500 and average mortgage of $4,000. This causes many people in the valley to rent till they pair up (get married) or till they rise in the corporate ranks and make more income. Either way, it makes for longer term tenants not moving in to purchase housing till their mid-thirties or later. Good for landlords. The rest you can extrapolate!

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