The title of my last column was "Convergence" which you can read here, and for those of you who attended our recent PCLC Spring 2010 Apartment Market Symposium you will remember I entitled my talk "Convergence", too.  Before introducing our distinguished panel of apartment experts I "set the stage" by letting everyone know the latest good news about the January 2010 jobs data in San Francisco and the East Bay.  That job growth graph, through January 2010, is indeed good news.  It clearly shows a v-shaped recovery in the job growth graph on both sides of the Bay and if you compare it to the historical graph you will see that the last time this happened, in 2003, the rental market was in a stage of recovery with rents going up in late 2004/early 2005.  That means that pretty clearly our rental market is recovering right now and many of us do not even realize it yet because we have vacancies and rents may still be drifting down.  If the job growth graph continues doing what its doing we will see rents going up.  That will not happen this year but maybe next year, and many investors will soon realize that rents will probably be going up in the relatively near future.

At the same time as this rental market is turning, the sale market is, too.  As cap rates rise prices are pushed down.  Investors are beginning to realize that these apartment buildings for sale are not looking too bad as far as returns.  When these same investors realize that the rents wil be going up maybe as soon as sometime next year, the light bulb will go off in their heads.  Bingo.  Convergence.  The two lines will cross, the rental market and the pricing of the sales market will converge and that will be the bottom of our market and the sign to buy.  I called the bottom of the rental market several months ago.  Am I calling the bottom of the sale market?  No, not quite yet but it is getting very close.  In fact, I predict that by the time of our 5th and final symposium of the series in September we will look back and say that sometime between now and then was the bottom.  And loan rates are still very favorable!  Get ready.