Start the conversation
When Chuck Post became a leasing agent out here in the Bay Area back in 2009, the post-financial-crisis rental market was so bad that he often resorted to "discounts," inducements like free parking, and even the first month free – just to get prospective tenants to sign on the dotted line.
That was then.
And this is now.
Thanks to a booming economic recovery, a record-breaking rebound in stocks, and the emergence of entirely new sectors in tech, Bay Area landlords are now calling the shots. Prospective tenants are lining up when a new listing appears, apartments get snapped up in a week or less, and rents are skyrocketing, Jed Kolko, chief economist for housing-services player Trulia, told The San Francisco Chronicle.
"Rents are rising faster in San Francisco than almost anywhere else in the country," Kolko said. "Rising rents are a bigger challenge than rising home prices, especially in a place like San Francisco where buying is out of reach for many middle-class and lower-middle-class people."
This isn't just a lot of jawboning.
In San Francisco in the third quarter, the average monthly asking rent in the bigger complexes punched up through the $3,000 barrier for the first time ever – hitting a record $3,096, says researcher RealFacts.com. That represents a year-over-year bump of 11.9%. And median asking rents for San Francisco rentals listed by apartment leasing service Lovely rocketed a massive 21% to hit a record $3,398 for that same time period, The Chronicle says.
And don't expect a reprieve: San Francisco experienced the single-biggest rent increase in America in January, a 12.3% surge that jumped the monthly rent of a two-bedroom flat to $3,350 a month. Nationwide, rents increased an average of 3% – an increase that was nearly double the U.S. inflation rate of 1.7%.
Though analysts I speak with tell me that Silicon Valley rents won't keep zooming at the current pace, the ongoing tech boom that I am forecasting essentially ensures that the rental-housing boom will continue until the decade's end.
In short, this "rent inflation" is a very big deal.
In the Bay Area, soaring rents are creating what one official referred to as a "crisis of affordability" that could short-circuit the tech boom.
And in the broader U.S. economy, zooming rent costs have joined with skyrocketing food prices (which we told you about last week) as the inflationary catalysts that are right now putting a big bite on household budgets.
As you and I both know, whenever a problem like this arises, the most ambitious and innovative companies will seek to solve it – while making a hefty profit in the process.
By finding those companies, you get de facto "protection" from the problem itself, because you're profiting from the solution.
We've uncovered one of the real winners – a Big Data firm that has a stranglehold on the U.S. rental market.
Here's why we believe the company's stock can double over the next three years…
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.