San Jose Multifamily Report – Winter 2020
Long boosted by one of the country's strongest economies, San Jose's rent hikes have hit a ceiling, at least for now.
San Jose’s multifamily market is sustained by one of the country’s strongest economies. Rent growth stagnated in the second part of 2019, advancing 0.1 percent year-over-year through November to $2,876. Despite the elevated rents in the metro, the occupancy rate in stabilized properties inched up another 10 basis points year-over-year to 95.7 percent in October.
After hovering below the 2.0 percent mark for most of 2018, job growth picked up in 2019, rising 2.6 percent year-over-year through September—80 basis points above the national rate. San Jose gained 33,600 jobs in the 12 months ending in September, with the professional and business services sector leading job growth (9,500 jobs), followed by the information sector (7,800 positions). Manufacturing—San Jose’s second-largest employment sector—rounded out the top three, expanding by 6,300 jobs. This growth is poised to continue with support from top companies including Tesla, Apple and Splunk, among others.
Apartment deliveries picked up again in 2019 with 2,393 units, or 2.0 percent of total stock, coming online year-to-date through November. The transaction volume crossed the $1 billion mark in the first 10 months of the year, for an average price per unit of $497,574, more than three times the $162,751 national average per-unit price.