Headcount: Woe Be Gone

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whyiswhy 12/5/2012 | 12:11:46 AM

re: Headcount: Woe Be Gone Commercial real estate vacancy rates in Silicon Valley are over 60%, based on informal observation of "for lease" signs on roughly that percentage of buildings in several business districts. In one district, the rate is over 70%....mostly new tech buildings. Notably, the older "industrial" buildings are mostly occupied, though pay for jobs in those buildings is MAYBE minimum wage / hourly.

Commute is easy though...

-Why

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Fortunecookie 12/5/2012 | 12:11:45 AM

re: Headcount: Woe Be Gone The housing prices in SV hasn't dropped yet. Your data does not make much sense to me. If so many companies are out of business, then I have to assume the unemployment rate is high. If so, who can afford those half million houses? (Not the great houses though, but that's the bare minimum in SV).

I think before the real estate burble burst, SV will never boom again. The high real estate prices drive the cost of SV high, thus make it much less competitive. If the cost of SV is reduced, we might not see a severe derire of outsourcing to India or China.

Fortune
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Commercial real estate vacancy rates in Silicon Valley are over 60%, based on informal observation of "for lease" signs on roughly that percentage of buildings in several business districts. In one district, the rate is over 70%....mostly new tech buildings. Notably, the older "industrial" buildings are mostly occupied, though pay for jobs in those buildings is MAYBE minimum wage / hourly.

Commute is easy though...

-Why

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optiplayer 12/5/2012 | 12:11:40 AM

re: Headcount: Woe Be Gone In Mass:

On the 495 belt vacancy rates were just over 30% on average in the 4th quarter. In some towns (Acton, Boxboro and Chelmsford it is over 40%). Rents have dropped by 2/3rds.

The 128 belt vacancy rate is in the low 20% for the same period.

These are real #s not estimates based on driving around. The trend shows no sign of changing.

The residential RE bubble persists here too though the economy is more diverse with lots of biotech and financial/mutual fund firms in the area.

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ThouShaltNotJudge 12/5/2012 | 12:11:39 AM

re: Headcount: Woe Be Gone Fortunecookie wrote:

"The housing prices in SV hasn't dropped yet."

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Perhaps the cost of real estate ownership has not yet subsided in SV, but by all accounts the rental market has become very affordable. Try living on the East Coast where property values continue to rise above the ridiculous Bay Area market, yet Telecom salaries tend to be considerably lower.

TSNJ

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Fortunecookie 12/5/2012 | 12:11:39 AM

re: Headcount: Woe Be Gone But again, the residential real estate prices have gone up last year in Mass., specially along rt 128 and 495.

How do you explain this? I don't question your numbers. As a matter of fact, I have the same feeling about commercial real estate situation. How come the residential real estate holds strong?

Fortune

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In Mass:

On the 495 belt vacancy rates were just over 30% on average in the 4th quarter. In some towns (Acton, Boxboro and Chelmsford it is over 40%). Rents have dropped by 2/3rds.

The 128 belt vacancy rate is in the low 20% for the same period.

These are real #s not estimates based on driving around. The trend shows no sign of changing.

The residential RE bubble persists here too though the economy is more diverse with lots of biotech and financial/mutual fund firms in the area.

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FatherTime 12/5/2012 | 12:11:38 AM

re: Headcount: Woe Be Gone RE: 495/128

Boston is not as diverse as one might expect since Hio-tech, Bio-tech, and Finance are all getting slammed. This creates a local economy very suseptable to market swings. MA leads the nation in job losses and negative population growth due to cost of living. This data is in the paper every Sunday.

Real Estate is last bastion for investors these days. Therefore, keeping prices steady (or steadier).

-FT

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Fortunecookie 12/5/2012 | 12:11:38 AM

re: Headcount: Woe Be Gone Funny thing, my friends in different places all claim they are the worst in the nation.

Sure, Boston friends complain,

NJ friends complain as well. Just think about that Lucent/Agere/Avaya, and tons of communication start-ups going down hill.

DC friends complain too. They thought they were the worst. Just think about World Com, Global Grossing. Sure I can't argue with them.

Need I to say SV?

I have lived in Mass, NJ, and DC. IMHO, Boston is the healthiest among these 4 areas.

Funny thing is that the real estate prices all hold strong in these 4 areas.

Fortune
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RE: 495/128

Boston is not as diverse as one might expect since Hio-tech, Bio-tech, and Finance are all getting slammed. This creates a local economy very suseptable to market swings. MA leads the nation in job losses and negative population growth due to cost of living. This data is in the paper every Sunday.

Real Estate is last bastion for investors these days. Therefore, keeping prices steady (or steadier).

-FT

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DarkWriting 12/5/2012 | 12:11:35 AM

re: Headcount: Woe Be Gone WHAT DOES THE GRAPH OF A DOUBLE DIP RECESSION LOOK LIKE?

|W W
| W W
| W W W
| W W W W
| W W W W
| W W
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DW

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whyiswhy 12/5/2012 | 12:11:35 AM

re: Headcount: Woe Be Gone RE prices for high end housing in SV have dropped at least 25%, and the supply has grown to over 1.5 years of demand. OF course, this is for Atherton, Menlo Park, Loa Altos, Saratoga (the "hills"). Working class homes are not dropping at all, and the supply remains at less than three months. Apartment vacancy rates are very high, and rents are very low. I guess this enables tow income families to save enough for a down, especially at low ARM interest rates. We see "extended family" situations: multiple incomes in one house. Which leads to crowded neighborhood streets with all the cars...but that's a minor point. I expect the average house price will slowly begin to driop, as the interest rates are not going any lower (IMO), and something has to give. Maybe oil prices will drop low enough to stimulate the economy, but I doubt it. From the oil companies perspective, that would be leaving money on the table.

I like observation better than statistics, as the government has a heavy hand on the scale in that area. My eyes do not lie, but I can count on politicians to lie every time.

As far as unemployment is concerned, the commute traffic volume is half what is was in '98-'99. And the valley population has dropped 30K people. I think unemployment and underemployment is about 25% here.

If interest rates go up without a good economy, many people will lose their homes back to the banks. We all know that is the next game afoot from the politicians: deficit spending.

-Why

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lightbeer 12/5/2012 | 12:11:35 AM

re: Headcount: Woe Be Gone How do you explain this?

Three words "Low Interest Rates"!

When they finally go back up that will put the brakes on prices and in some areas might roll them back.

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