San Jose Multifamily Report – Spring 2019
The market's strong economy and highly skilled renter cohort continue to support substantial rent growth. The average rent stood at $2,872 as of March, roughly double the national figure.
San Jose rent evolution, click to enlarge
Fueled by a strong economy led by its technology industry, San Jose’s multifamily sector remains healthy. Although it ranks among the most rent-burdened metros in the country, the market benefits from a strong, highly skilled renter cohort that can largely accommodate the market’s high rents.
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San Jose’s economy has continued to be strong, adding 25,600 jobs in the 12 months ending in February, a 2.0 percent growth in rate of employment year-over-year. The information sector led growth in the metro with the addition of 8,500 jobs. The industry also saw the largest year-over-year change (9.7 percent as of March) and is expected to continue to increase as tech companies like Facebook, Google, Amazon and Apple expand local operations. Contributing to the bulk of office projects coming to the metro, Google’s mixed-use campus is set to include roughly 3 million square feet of office space, 400,000 square feet of retail and 8,000 residential units.
San Jose sales volume and number of properties sold, click to enlarge
Transaction activity slowed during the first quarter, following a $1 billion year in 2018, with two assets trading for a total of $101 million. Core submarkets close to corporate campuses remained in high demand. Despite a sluggish start to the year for deliveries, nearly 11,958 units were underway as of March. With strong fundamentals driving the housing market, we expect rents to continue to grow—by 2.4 percent in 2019.
