Los Altos Real Estate Blog

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Are Silicon Valley rents soaring?

Soaring rentsAsk anyone looking for an apartment, condo, townhouse, or single-family home rental and they'll all tell you horror stories of how difficult it is.  A recent article in the San Jose Mercury news points to soaring apartment rents but what about everything else?  Rents are increasing in non-apartment properties as well because of stiff competition and an influx of relocation tenants. 

Anecdoctal evidence of increasing rents can be found in reports from prospective tenants.  Those that I've spoken to find premiums of 5-10% in strongly competitive situations (multiple concurrent applicants). Those that don't run into extreme competition are stuck taking whatever rate is demanded by the landlord.  Single family homes in prime markets (Los Altos, Palo Alto, Cupertino, etc) with good schools are running $4000+ for a 3 bedroom home.  This is up from $3500-3800 just a few months ago.

At these rates, renters should consider buying if at all possible.  With interest rates at record lows and prices rising, the opportunity to become a homeowner is ideal.  My suggestion is to look at what you qualify for and you're likely to be able to buy in the same neighborhood you're living in now.

How far up will rents go for the rest of 2012 and into 2013?  I think we'll see them level off a bit toward the end of the year as tenants realize they can buy for the same or less as renting.  Many renters in the market are relocating from other parts of the country and they're usually doing a short term rental.  As those folks shift into buying, we should see more rental inventory come back.

Hot Tips for Renters

  • Use Rentscoper or Padmapper websites to find rentals
  • Have applications ready
  • Have a deposit check ready
  • Have a credit report ready
  • Be ready to make an offer to rent the minute a property comes on the market

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 Bryan Robertson, CEO | T: 650.799.9951 | Email: bryan@catarra-re.com | Website: http://www.BryanRobertsonHomes.com |CA BRE# 01191946 | Catarra Real Estate, Inc  | 171 Main St #220 | Los Altos, CA 94022

 

 

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Comment balloon 7 commentsBryan Robertson • July 18 2012 07:41PM

Comments

This is a real problem in many places.  Many who are renting had to do so because of credit issues which may take some time to repair before they can purchase.  Today we learned from a credit expert this can take from1-2 years.. even if there is only 1 late payment.. and depending on the type of credit card...

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 6 years ago

Rents are soaring all over the bay area.  Very good reason to buy.  Either to live in or rent out.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) over 6 years ago

This is a great time to buy...Have a great week.

 

Posted by C. Lloyd McKenzie, Living Albuquerque over 6 years ago

I had a call yesterday from a couple from TX who came to our area expecting to find a home for them and their dog in 2 days and after running around 3 counties they missed 2 homes to BETTER ORGANIZED applicants and were begging me to show them a home before their plane back to TX....I suspect they will be living in a local apt complex for the first 6 months of their move to the area and they will find it even HARDER to find a single family home in the dead-of-winter

Posted by Wallace S. Gibson, CPM, LandlordWhisperer (Gibson Management Group, Ltd.) over 6 years ago

Bryan, great post. I received a call from a potential client yesterday cancelling our appointment. They just are not ready to move forward on a home purchase. It is amazing to me that folks do not understand the great opportunity buying is right now. Have a great day.

Cal

Posted by Cal Yoder, Homes For Sale in Lancaster PA - 717.413.0744 (Keller Williams Elite) over 6 years ago

Bryan I closed a home last week and my buyers were going to save over $200 a month on what they had been paying in rent!  Great incentive to get off the fence and become home owners.

Thanks for dropping by my post today.  You are always appreciated my friend.

Posted by John McCormack, AlbuquerqueHomes.com, Albuquerque Homes Realty (Albuquerque Homes Realty * www.AlbuquerqueHomes.com) over 6 years ago

Bryan, great advice for renters (including those who lost their homes). I just placed a rental on the market and the response was overwhelming.  The homeowner is relocating and wants to hold on to his home until he has job security and ther reason for not selling. We argued about the rent. He finally listened to my argument and will now be renting for more than he though he could get.  I recommended they hold an open house and take applications then instead of the interuptions of showing the home with both of them working full time.

Posted by Anja Kerstens, GRI, CDPE, CHS, ASP, Selling Silicon Valley Real (Coldwell Banker Residential Brokerage) over 6 years ago

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