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Disillusioned dot-commers not the only ones high-tailing out of town as the economy turns sour

Posted at 10:45 p.m. PDT Sunday, June 3, 2001

BY DEBORAH LOHSE

Mercury News

First it was the dot-commers fleeing the area with their failed dreams. But now it looks like the trickle out of Silicon Valley has widened to include refugees ranging from middle-class families to foreign workers, all looking to escape the economic bust.

While there is no recent hard data, anecdotes from movers, real estate agents and school officials suggest this moving season will bring more than the usual game of musical chairs. They list several reasons: Middle-class families and retirees are cashing in on their houses and taking their bounty where it will buy more. Employees are snatching up offers from companies to move to cheaper branch offices. And laid-off workers -- including some foreign ones -- feel too much competition and not enough payoff to stay.

It's not just newcomers leaving, but also those with deep roots in the valley, like Suzanne Ferrol, who has lived in the Bay Area all her life. She now figures she's getting out while the getting's good. She sold her 632-square-foot San Jose condo for $229,000. She's using her $100,000 profit for a down payment on a $153,000 three-bedroom home in Nevada.

``Everything is more expensive here,'' said Ferrol, a senior administrative assistant and single mother with a teenage daughter. Silicon Valley types ``just think everybody makes the big bucks, and I don't make that kind of money.''

Signs of change

Other signs of change afoot:

Companies pressed for money have cut back on importing workers and paying for relocations. Relocation companies say business has fallen off 30 percent or more, in Silicon Valley and many other areas. Cisco Systems aid relocations are down in the past two months to about 100 from roughly 600 a quarter, but would not specify if moves were in or out of Silicon Valley.

``Companies that may have moved a large number of people between regions, encouraging telecommuting, are now pulling those moves,'' said Mike Brannon, senior vice president for operations at Cendant Mobility.

Student enrollment is slowing in many areas. The San Jose Unified School District saw a rare 1.5 percent drop in elementary student enrollment last year, especially in areas with steep rent increases, and projects a 0.5 percent drop for the coming school year. Many schools in Palo Alto, Los Gatos, Los Altos and Saratoga saw significant drops in enrollment growth last year. The drop-off could worsen, some school officials fear.

``If the economy was to not pick up, and the next wave of layoffs goes into the service industry, then we'd have some issues with enrollment,'' said Bob Gonzales, administrator for demographic planning.

More home sellers are leaving town. About three to eight homes are for sale in the valley for every home sold -- compared with just one or two to one last year. This suggests that sellers smell a market peak, and buyers are waiting for prices to fall. Several agents estimated that 10 percent to 20 percent of homes they sell are for people moving out of the area, compared with a tiny fraction in recent years.

Moving companies see changes. In recent months, moves out of the Bay Area using U-Haul outnumbered moves in by anywhere from 12.7 percent to 43 percent in various cities. `We've got a lot of people moving,'' said Kermit Scarborough, a worker at a San Francisco office for the do-it-yourself trucking company. ``Looks like the gold rush is over.''

By contrast, United Van Lines says it is still moving more people into the area than out. But there are now different faces in the leaving crowd, and they're going different places, no longer just scaling up within the Bay Area.

``Traditionally, our clientele was on a merry-go-round, moving to the more affluent communities'' within Silicon Valley, said Ralph Cramer, a director of moving services for Rossiter Relocation, a Menlo Park agent for United Van Lines. ``Now they are moving out.''

Several used-car dealers report an increase in inquiries from people wanting to sell their cars before heading to another state or country. Sunnyvale Toyota, for instance, gets five to 10 such inquiries a week now, up from one a week in the recent past. Others say they've shipped more cars out of state recently.

Car sellers say they see a pickup of Asian and European workers turning back, too.``Last year, we had people coming in wanting to buy a car, they just flew into town from India or the Far East, letter of employment and all that,'' said Arman Safipour, sales manager at Used Car Factory in San Jose. ``Now it's reversed; those people are coming in trying to unload their cars, because they lost their jobs.''

Hardly a ghost town

Certainly, there's no ghost town in the offing. In fact, data for the year ending Jan. 1 shows that Santa Clara County's population actually grew by 1.5 percent to 1.7 million. However, it's not clear if that growth is due to robust birth rates rather than people continuing to move in. There's also little data on what's happened so far this year.

For sure, traffic is still bad, unemployment is still low, and real estate professionals suspect home buyers turned off by heated demand last year may be ready to come back. But there's still leakage in the once-bulging region. Some real estate pros say the flow of retirees cashing out and heading to Sacramento, Nevada or Arizona seems to be accelerating.

Years ago, Ralph Courtnay figured he'd retire in California, where he and his wife love the skiing and hiking. But then the technology boom sent the value of his Cupertino home from the $46,000 he paid decades ago to $1.12 million. In mid-May, he retired from Compaq Computer. Now he and his wife are off to Reno with his home bounty and some stock-market gains. ``We're looking forward to a real outdoor life,'' said Courtnay, 62.

Lament for old times

Other old-timers lament the vast changes in the Bay Area. Jennifer Vazquez grew up in Almaden Valley but recently moved to Phoenix with her firefighter husband, J.C., and her three children after she was laid off twice in a few months from customer-service management jobs. ``You don't even know your neighbors here,'' said Vazquez, who added she's ``heartbroken'' to leave her mother and home.

Another longtime resident, Dan Matthews, worked for 20 years at Zircon, an electronic-manufacturing company in Campbell, and rented a home nearby. He also boarded two horses in Morgan Hill. But when his landlady wanted her house back, he and his wife realized they could only buy a home if he commuted for more than an hour. Zircon made him an offer to work out of San Diego. He took it.

Now a proud homeowner with more than an acre of land, he lives six miles from his office down a dusty road. The horses live on his land. ``We could ride our horses to work if they had a hitching station,'' he said. He still misses the Bay Area.``Our kids are there; that's the hardest part of the decision,'' he said. But ``in the long run, we're going to be able to help our kids more this way.''

Contact Deborah Lohse at dlohse@sjmercury.com or (408) 271-3672.

-- Swissrose (cellier3@mindspring.com), June 04, 2001

Answers

The whole Bay Area has been so expensive and overcrowded for so long, maybe this is just a time out for sanity. This says it for me:

"he and his wife realized they could only buy a home if he commuted for more than an hour"

That applies to D.C., New York, L.A., anywhere big, where up to 2- hour commutes are common. I already resent the 1/2 hour commute I've got. The idea of living as far away as Stockton and commuting to San Francisco or anywhere around the Bay makes me shudder.

-- Margaret J (mjans01@yahoo.com), June 04, 2001.