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Profits of Doom

From greedy to needy, the valley's landlords have shapeshifted in the face of changing market values

By Genevieve Roja

WHO COULD BELIEVE the nerve of some of the valley's stingiest landlords? Threats of eviction, tenant groveling, obscene rent increases and general backstabbing. And in the end, ants still marched behind wastebaskets, cockroaches made appearances and that air conditioner never did get fixed.

At its peak, the housing crisis in Silicon Valley became a journey into the heart of darkness. The bidding wars. The relocations. The price gouging. So, depending on where everyone was in the Silicon Valley caste system, the stock market dive was either welcome news or the kiss of death. Everyone hoped that the red-hot real estate market would cool off, and it couldn't happen fast enough.

According to Alan Pontius, regional manager of Marcus and Millichap Real Estate Investment Brokerage in Palo Alto, rates for apartment complexes are shrinking from their peak periods in September and October 2000. In a company survey, the average monthly rent for a two-bedroom, two-bath rental at 20 separate complexes between Palo Alto and San Jose dropped an average of almost $300 since the first of the year. However, it might be a bit soon to expect the next Dust Bowl migration to our fair valley. The rental rate in Santa Clara County is the third highest in the country, closely trailing San Francisco and New York, according to Reis Inc., which tracks real estate trends. The good news is that in order to court tenants to fill the countless vacancies, landlords are now offering incentives.

"There's two basic strategies in play," Pontius says. "One is to simply bring the market to what it will allow the unit to move, and the other is to try and maintain a higher rate but offer an inducement ... some sort of reduction."

Inducing, reducing--let's not call the whole thing off just yet.

The Morning After: Farewell Dotcom, We Hardly Knew Ye.

Thank God It's Over: 100 reasons to celebrate the end of dotcom insanity.

Car Jam: Freeways speed up from a slow crawl to a fast crawl .

Whistle-Blowers: Patience, tolerance and attitude separate the wise Caltrain commuter from the fool.

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From the July 19-25, 2001 issue of Metro, Silicon Valley's Weekly Newspaper.

Copyright © 2001 Metro Publishing Inc. Metroactive is affiliated with the Boulevards Network.

For more information about the San Jose/Silicon Valley area, visit sanjose.com.

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