Brighteyez,
In the many years I lived in the bay area rental prices had a strange life of their own. When interest rates were low and people ccould afford to buy, often they would rather own a condo than rent, so rental prices would drop during most real estate booms. When rates rose, people would default and sell the condos then go looking for apartments. Rents dropped.
We are in a real estate lull and defaults are up but generally outside the core peninsula. Also, every indication is that silicon valley is gearing up with significant infusions of venture capital. This should create jobs and increase rental demand in the process.
As you mention, it was very crazy during the first two internet waves. I left the valley, my lifelong home, in late '97 and moved north to start a business in Napa Valley. There was so much dot com money floating around the bay area that I couldn't find a place to live. No home, no apt, no nothin'. Literally, there was one rental listing here in the valley - a one bedrom cottage in a beautiful vinyard - price $4000 a month. So my wife, my daughter, the two dogs, and the pet rat lived in a dark storage room behind the business until we found quarters in a russian orthodox convent. After six months we found less temporary quarters but nothing suitable for over a year and a half.
Fortunately things have calmed a bit. Anyway, Goldserve, if you need to go south, you might consider something close to the train line. I lived near the san jose/santa clara border for 10 years and commuted to palo alto daily using the train. Was a wonderful relaxing alternative to the commute down 280.
He should be able to find housing, it's just that it might cost a little more than the $1000/month that he was budgeting for.
