San Carlos Real Estate Agent, San Carlos Realtor Friday’s Off-Ramp: Three Bad Numbers… | The White Oaks Blog
San Carlos Real Estate August 7, 2009

Friday’s Off-Ramp: Three Bad Numbers…

by Chuck Gillooley

Chair in empty office

8.9%, 11.8%, and 20%

I read an interesting article this past week that had these three simple numbers in it.   If you’re wondering how the economic recovery is coming along in this area, these three numbers tell a brutal story. Here’s what they mean:

  • 8.9% = Unemployment rate in San Mateo County
  • 11.8% = Unemployment rate in Santa Clara County
  • 20% = Office vacancy rate in Silicon Valley.

Ouch.

What Recovery?

As much as I want to believe the real estate market it poised for a rebound, and that the “worst is over” with regards to the hemorrhaging economy, these number are troubling to me.  Why?  Because a significant number of residents in San Carlos and other nearby communities rely on technology companies in Silicon Valley or on the mid-Peninsula for their livelihood.    The technology boom of the 80’s and 90’s changed the demographics of the mid-Peninsula virtually overnight,  and our reliance on technology and Silicon Valley hasn’t waned since.

That’s why when I see numbers like these, I know it’s hitting home right here in San Carlos.    When the combined counties lose 50,000 jobs since November of ’08, you know someone here is affected.   When Cisco reports crummy earnings (by their standards), you know things aren’t quite right yet.   And I have to believe that Oracle’s acquisition of Sun Microsystems isn’t going to improve the aforementioned unemployment numbers.

The Mindset

These numbers are very black and white, but they only tell half the story.  They don’t reflect those folks who are still employed, but are still worried about losing their jobs.  The bottom line is that no full-fledged housing recovery is happen until the numbers above come way down, and the mindset of the existing workforce is more secure.  People without jobs, or in fear of losing their jobs, don’t buy homes.

So keep an eye on these numbers going forward.  They’ll tell you all you need to know…

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Comments 2
  • I agree, the economy of mid to southern San Mateo county is very much tied to the Silicon Valley. A lot of reorganization and changes are underway. Maybe I am an optimist but I am hoping this is the bottom? I found this line in the article you mention very interesting: “The recession hit very late and very swiftly” . Somehow this reminds me of this recent WSJ article: http://online.wsj.com/article/SB124924069909799645.html
    Perhaps my optimism is fueled by the fact that San Carlos is the best place in the world to live? .. just my humble opinion 🙂

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    • I believe that part of the reason that it appeared to hit “very late and very swiftly” is that many of the smaller companies don’t report their layoffs the way the established corporations do.

      Consequently there’s an unexpected spike in the unemployment rate (and the office vacancies) throughout the valley. I try to be as optimistic as I can too. But these numbers don’t give me the feeling that Silicon Valley has shaken things out yet.

      Thanks for your comment…

      CG

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