A lot of debate has been flying between economists, politicians, analysts and experts on whether the tech industry is in a bubble. Opinions have run hot about whether companies like Groupon or Facebook are truly worth what their share prices indicate.
Now a new group, that doesn’t have as much to gain (and perhaps much to lose if they’re correct) has weighed in on the question: San Francisco realtors.
An article in the San Francisco Examiner states, “The occupancy rate in The City rose 6 percent between 2010 and 2011 — meaning there are fewer apartments available on the market — and the average cost of all rentals went up from $2,214 to $2,422, according to RealFacts data.” RealFacts aggregated and analyzes real estate data.
Nick Bilton of the New York Times quoted Sally Kuchar, editor of the real estate blog Curbed San Francisco as saying, “I think a lot of new dot-com employees, specifically those who work for companies like Apple, Google and Twitter, are now moving into the city and can afford to pay much higher rents.”
It’s a curious mix of anecdotal and statistical evidence. As one who lives in San Francisco and has negotiated the rental market a couple times, I can attest that it is beyond chaotic. You must be ready to write a check on site. Any decent apartment will be swarming with young people during an open house, many in such a hurry to get a rental application in the agent’s hands that they’ll be writing against the walls or each other’s backs.
Whether or not it’s liable to pop, what is clear however, is that the tech industry has caused the prices and demand of San Francisco housing to inflate at an astonishing rate.