The oil boom and skyrocketing housing prices west of the Altamont Pass are setting the stage for a 21st century Grapes of Wrath migration.
This time around the Joad family isn’t out of work and losing the farm. They’ve got good paying jobs but can’t afford to buy near where they work or in the suburbs. Renting is possible but they get a lot less space and sacrifice lifestyle to be able to have a roof over their head.
The Northern San Joaquin Valley is one of 70 exurb regions primarily in the South and West were economists are saying housing is once again defying national trends.
Squeezed by high housing prices and lured by reasonable gas prices and the ability to buy or rent a home without breaking the bank, Bay Area families are again turning to the Northern San Joaquin Valley for options.
Economists who had expected the exurbs to recover dead last because they fell the hardest and farthest during the housing collapse and Great Recession are now saying those regions are bouncing back stronger than many others on the back of the housing market.
And the biggest factor causing Bay Area workers to seriously consider the commute are rents.
Average rents have increased 10 percent in the last three years to $1,100 in the nation’s top 79 markets. That’s the highest since the research firm Reis Inc, started tracking rents in 1980.
The average apartment rent in San Francisco is $2,043 and the average apartment rent in San Jose is $1,685. The average apartment rent in Pleasanton/Livermore is $1,484.
A $350,000 loan — which is above the FHA maximum for Manteca-Lathrop but is within easy reach for most Bay Area workers — translates into a $1,720 a month payment at today’s rates.
It is why talk of new mortgage crisis in 2015 is likely to avoid the Northern San Joaquin Valley. That’s because the Silicon Valley is the most robust regional economy in the country and is providing salaries that allow people to comfortably handle conventional mortgages.