Silicon Valley Snapshot
In all my readings this past week, only two articles grabbed my attention enough to share. One was on job growth slowing; and the other was on the commercial property boom expected to persist. On the surface, these seemed a bit in conflict. So, my reason for sharing both articles (and focusing on them here) is that they sum up a lot of what is happening in the Silicon Valley market. I suggest you read both for yourself.
Yes, job growth here is slowing, but we are still growing. We do have folks leaving the area due to the high costs of living here. One of the articles mentions that we have had a net exodus from the region. However, even though housing inventories are up, we still do not have enough new homes being built.
As most of us know, there is only so much buildable land between San Francisco and San Jose. That makes it difficult to keep up with the demand for increased housing. Without the increase in housing, prices will continue to rise over the long-term. And, we have more than our fair share of issues. Commutes are bad and getting worse, roads need repair, low income housing does not seem to be plentiful, and the quality of education seems to be eroding.
If you did not know the region, then you would question why would anyone want to live or work here. However, it is a very unique area with innovation and houses some of the brightest minds in the world. Or course, it would be great to have the problems resolved too.
Looking over at the commercial sector, companies (especially our core companies here) continue to expand. They clearly see the opportunities here; and they feel it is important to have a major presence here. This will continue to push demand in office, mixed use, and industrial properties. Add to that demand the whole Opportunity Zones that exist, and I contend we will have lots of activity in new developments for the foreseeable future.
Is the market slowing a bit? Yes. Yet, if one steps back, it is difficult to see how this area will all of a sudden struggle mightily. Will we have some bumps along the way? Yes, to that too. Regardless, this is a unique area that flourishes; and one that eventually will find creative ways to solve some of the local frustrations.
Articles of Interest:
The SJ Mercury News shared “Job growth slowing in Silicon Valley.”
The SJ Mercury News also shared “Silicon Valley commercial property boom expected to persist: report.”
See the table below for approximate interest rates.
|4.175% – 4.760%
|3 to 10 year (30 yr amortization)
|4.475% – 5.060%
|3 to 10 year (25 yr amortization)
|Call for Options
|Call for Options