Will the Bay Area see higher rents in the near future?
Some economists and venture capitalists said things are heating up tech-wise again in the region, which could fuel a spike in rent prices. A move would be a change from what the Bay Area has seen in the last couple of months with prices dipping and job cuts rising.
Danielle Hale, a chief economist for Realtor.com, said the latest numbers show a cooling off in Bay Area rents.
Local rents have dropped by about 1.5% since this time last year, according to Realtor.com. The drop is largely due to recent tech layoffs.
New jobless numbers show the Bay Area is still lower than California as a whole, but the figures have ticked up in the last month.
“We’re not seeing the growth that we saw before, and when we don’t see that growth in jobs, we tend to see that reflected in the for rent and for sale housing markets,” Hale said.
But layoffs tend to be a lagging indicator since the cuts discussed were announced months ago. Now, the region is starting to see growth again.
“We seem to have turned the corner on layoffs,” Joint Venture Silicon Valley CEO Russell Hancock said.
Hancock said consumer confidence is up, shoppers are setting their sites on new gadgets again, and venture capitalists are funding startups, which in turn are looking to hire.
“Now we’re moving ahead, in fact charging ahead, with exciting, lucrative areas like artificial intelligence,” Hancock said.
Meanwhile, Google and Microsoft recently each reported strong profits and growth with no layoff announcements.