Friday, October 21, 2016

Scott Safadi on Dropping Rents in the Bay Area

Well, the time has finally come. Rental rates are finally dropping in the Bay Area, after over five years of continual, double digit growth. That type of growth was simply unsustainable. While many news outlets try to sensationalize this phenomenon as the bursting of a bubble, Scott Safadi, does not believe that this accurately represents what is taking place. Rents are finding their equilibrium. With job growth down to normal levels, we can expect the market to continue to adjust, most likely further down and then possibly a small rebound until things level off for a while. Our hyperbolic rental market is not good for anyone. It is Scott Safadi's hope that we will find that equilibrium in the coming 12-24 months and that sustained job growth will keep rates steady for some time to come.

Sunday, October 9, 2016

Scott Safadi on Renter Movement

There is an undoubtable trend in the bay area rental market, especially when it comes to millennial generation renters who work in the tech sphere. We are seeing these folks leave the Silicon Valley and instead gravitate to the Peninsula and San Francisco. While working at Google might be a cool thing, living in Mountain View is not for these young tech workers. At this point, I would consider Palo Alto the southernmost tip of "cool" places to live. Santa Clara County is almost completely on the outs, with San Mateo County surging ahead in popularity. These renters want to be on the Caltrain line. They want to be able to get places on foot and on their bikes, such as a downtown. Little towns along the Peninsula that have access to Caltrain as well as a nice downtown, such as Redwood City, San Carlos, and Burlingame, will continue to thrive for many decades to come.

Friday, November 20, 2015

Ready for El Nino

Many property owners have been preparing for El Nino, requesting extra attention to their gutters and so forth. While this is a standard fall time practice for property managers, the looming fear about the coming rains has pushed us to take some additional measures this year. The two early rains of this year, one week apart, and lasting one day only, were extremely helpful in identifying weak points in our various roofs. We are confident that coming into the main winter months, we will have minimal issues, thanks to the timing and duration of the early rains.

Friday, October 30, 2015

Rental Market Update by Scott Safadi

After 5 years of double digit annual growth, the rental market in the Bay Area appears to finally be flattening out. There is always a seasonal slowdown at the end of the summer; however, in 2015, this slowdown came in early August, when things are usually peaking. Rent to income ratios remain at 2.5-3.0X comfortably, but one has to bear in mind that the majority of new renters today, tech employees, are making six digit salaries. The current bay area rents depend on this sector and the salaries it provides. One must ask how the others survive - those not making six digit salaries in tech. The reality is that they are being forced into areas and neighborhoods that they would not have considered living in before, or they are moving out of state.

Friday, October 23, 2015

No Emails outside of work hours

One thing I've noticed is that I really can't stand how many emails always await me when I come into the office at 7:00 AM every morning. When I leave at 5:30, I have zero unread emails,but somehow I have 25-30 new emails waiting for me between the hours of 5:30 PM and 7:00 AM the next morning. One day, it would be nice to come into the office with a blank slate for the day, without having to spend my first two hours catching up on emails from my night owl associates. I suppose the only thing within my control is to not check emails outside of business hours and that's what I'm going to do. People can call or text in emergency cases, but after a 10.5 hour day, I'm done!

Friday, October 16, 2015

Scott Safadi on Rent Control

Scott Safadi believes that rent control is not the answer to the affordability problem when it comes to Bay Area rents. Scott Safadi acknowledges that the rising rents do, in fact, pose a challenge for many in the renter community. However, pragmatically speaking, rent control only helps a few, while it harms many others. Specifically, Scott Safadi believes that rent control creates an unreasonable burden on incoming renters, such as recent graduates or people just moving into the area, while creating an unreasonable benefit, on the shoulders of landlords to long time residents. Scott Safadi believes that the reality is that no renter is entitled to live wherever they want at the price point they want. This is dictated by the market. If an area becomes very popular (demand) and prices are driven up, renters who cannot afford those prices need to relocate to an area that is within their budget. Scott Safadi believes that, while the millennials are the ones who have been referred to as the entitled generation, there are previous generations that actually believe in an entitlement system within a free market. Scott Safadi believes that rent control is not the solution to our problems. San Francisco is a perfect example of how ineffective it really is.


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