San Jose’s Housing Market 2018/2019
In 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. Prices in Santa Clara Valley are high yet San Jose seems to be where everyone wants to live in 2018 and 2019 according to predictions.
It’s estimated that 1/3 of venture capital in the US, comes to San Jose 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 takes a deep dive in the Silicon Valley area. Overall, this is the most expensive region in the US housing market. High prices and limited availability are slowing sales and increasing the frustration of buyers and renters. The median income for San Jose families is about $87,000.
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
High demand from a booming economy and a limited pool of house and multifamily dwellings will keep prices rising in San Jose and Santa Clara County overall. Zillow’s prediction of a 21% increase over the next 12 months means renters and home buyers will be less hopeful. Demand for rentable properties will be high and difficult to find.
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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