San Jose Multifamily Report – March 2023
After a strong run, Silicon Valley rates are back to historic averages.
After a year of strong gains, San Jose rents followed the nationwide deceleration trend, with overall rates decreasing by 0.6 percent on a trailing three-month basis through January, to an average of $3,067. Rents in the market contracted 30 basis points faster than the national average during the period, with the U.S. figure now at $1,701. On a year-over-year basis, San Jose had one of the highest rent expansion rates in the nation, at 8.1 percent.
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Despite a growing wave of tech layoffs, San Jose maintained strong employment growth, with the labor pool expanding by 5.1 percent during the 12-month period through November—120 basis points higher than the U.S. rate. According to preliminary data from the Bureau of Labor Statistics, the unemployment rate was a tight 2.1 percent as of December, lower than both the U.S. (3.5 percent) and California (4.1 percent) figures. The Silicon Valley BART extension project entered its second phase, which will add an additional four stations from Berryessa through downtown San Jose and to Santa Clara. The expansion is estimated to cost $9.3 billion, with the testing phase scheduled for 2028-30.
San Jose recorded a 1.1 percent expansion of stock in 2022, equivalent to 1,470 units. The metro had 9,697 units under construction, with Yardi Matrix expecting roughly 4,000 units to be completed this year. The metro’s investment volume in 2022 increased five times more than the previous year, with $1.1 billion in sales recorded.