San Jose’s Housing Market
In what is the Valley of Heart’s Delight, is perhaps the heart of the new Silicon Valley. With exceptional growth, comes changes in the character, business focus, and location of residents.
San Jose seems to be where everyone wants to live in 2019 and beyond according to predictions. As local homebuyers ponder the Buy vs Rent question, some have a small window before the market resumes its upward march. For renters as you can see below in the stats, it is tough to find an apartment for rent.
Although house and condo prices have dropped, and the market has cooled, demand for rentals remains very high in Santa Clara Valley, where home prices have climbed above 1.2 million dollars. The key is a lack of affordable housing.
Silicon Valley never sleeps: It’s estimated that 1/3 of venture capital in the US, comes to San Jose California and the city has one of the highest GDPs of any city in the world. Whether you want to work, build a career, start a business, this is a great place to be.
San Jose itself has grown to a population of 1,035,317, third largest of all California cities. Population growth however has slowed to .4% in the last year.
Prices on a Steep Rising Curve in San Jose
These two charts show how rapidly home prices and the number of rented properties have increased dramatically. The number of rental units is skyrocketing. That tells investors and property management companies that there is a positive correlation between home prices and the number of rentals.
Affordability Took a Deep Dive in Silicon Valley
Despite the recent decline, overall, this is the most expensive US housing market. High prices and limited availability are slowing sales and increasing the frustration of buyers and renters. Although the US and California economies have flattened a little, economists predict the markets to recovery by mid summer.
The median income for San Jose families is about $87,000.
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76% of voters surveyed said it’s gotten “much” or “somewhat” harder to find housing according to a poll conducted online by Oakland-based EMC Research
As you read in the California housing market report, a good percentage of new investment, migrating workers, and tech related industries is in the area of Silicon Valley.
Big tech companies have their offices here including Apple, Google, Intel and Advanced Micro Devices. And with President Trump’s aim of reviving manufacturing in the US, American companies that make microchips here are poised to boom in the coming years.
Unemployment Rate Remains Ultra Low
Unemployment in Santa Clara County has dropped to 2.8% reflecting the ongoing strength of the tech sector in California. Labor shortages will actually prevent further upward pressure on home prices and apartment rental prices.
San Jose Home Sales and Prices
Zillow reports an median selling price of $1,066,800 in San Jose. They forecast home prices in San Jose to rise a further 11.4% by mid 2019. The market is very healthy with only .38 % of homes having negative equity and only .4% are delinquent on mortgages compared to the national average of 1.6%.
Rental Prices in San Jose
Although rental prices are on the incline, they are considerably less than Los Angeles rent prices and San Francisco rents. Given the expected rise in real estate prices here, the typical rent increases of 5% are a break for renters. Does that spell opportunity for landlords and property investors?
Screen Capture Courtesy of Rentcafe.com
Best Neighborhoods in San Jose?
According to homesnacks.com, these are the top ten neighborhoods in the city:
Here are the best neighborhoods in San Jose for 2019:
- West San Jose
- Almaden Valley
- Cambrian Park
- Blossom Valley
- Willow Glen
- Santa Teresa
- Rose Garden
- North Valley
These neighborhoods have the highest average rents reported by Rentcafe.
San Jose, CA, is a desirable location to work and live and that creates a healthy housing market for homebuyers and property investors. In this competitive region of silicon valley however, property managers will want to optimize every aspect of their operations.
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