San Jose Multifamily Report – March 2024
After multiple woes, the market's prime leasing season is here.
While national multifamily rents started 2024 on a downswing as economic growth slowed, San Jose was one of the few metros that recorded positive movement. The metro’s rents were up 0.1 percent on a trailing three-month basis through January, while the nation recorded a 0.2 percent decline. Demand in San Jose remained steady, as occupancy improved 20 basis points year-over-year, to 95.9 percent as of January, 130 basis points above the U.S. rate.
Unemployment climbed to 4.0 percent in December, the highest rate since October 2021, according to preliminary data from the Bureau of Labor Statistics. As the job market slowed, a total of 11,800 jobs were added over the 12-month period ending in November. That accounts for a growth rate of 1.7 percent —50 basis points behind the 2.2 percent U.S. figure. The rate exceeded the national figure for the first eight months of the year. Education and health services led growth with 11,100 jobs. A few sectors recorded losses, with manufacturing taking a big hit, down 4,100 jobs for a 2.2 percent slide.
Development activity reflected a clear downward trend. San Jose had 10,488 units under construction as of January. In 2023, a total of 2,738 units came online, up 10.1 percent year-over-year. However, construction starts declined by a hefty 69.6 percent when compared to 2022, signaling an upcoming decline in new supply.
