Rental Market Remains High and Strong

The research company RealFacts has released a report for 2008 affirming the strength of the rental market in the Silicon Valley. This rental research company reveals quarterly statistics on rental market prices and occupancy rates (The percentage of available rental space that is actually rented and in use in a given building or community). Although the rate of increase in occupancy rates have lowered somewhat, the yearly increase raced in at second largest in the state, led by the San Francisco-Oakland-Fremont region.

According to RealFacts director of sales and marketing Gerald Cox, the fact that Santa Clara County and San Francisco have high occupancy rates despite a recessionary downturn in the economy is a sure fire “sign of local markets remaining strong.” The leaders in highest rental markets of California were San Jose-Sunnyvale-Santa Clara, at $1,660; Los Angeles-Long Beach-Santa Ana, at $1,651; Santa Cruz-Watsonville, at $1,606; San Francisco-Oakland-Fremont, at $1,596; and Oxnard-Thousand Oaks-Ventura, at $1,552.

Other economists agree that such a high occupancy rate such as San Jose’s 96.5 percent signifies a robust economy. However, “The drop in housing prices and low interest rates don’t appear to be enticing people to leave rentals in favor of buying a home,” says Chris O’Brien of MercuryNews.

The Silicon Valley remains pricey for both homebuyers and renters. According to Sue McCallister, who monitors the Silicon Valley Economy, a worker in Santa Clara County needs to make nearly $24.87 an hour in order to afford a basic two-bedroom rental in the area. Says Cox of RealFacts, “many who are entering the rental market are being affected by foreclosure and vacant houses will become rental properties.”