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June 15th, 2019 by Marco Santarelli
How is The San Jose Real Estate Market 2019?
If you’re keen to invest in your future in the San Jose real estate and buy before prices become out of reach, you must peruse till the end. California keeps hitting the news as a figuratively toxic market spiraling down. If it wasn’t for legal and illegal immigration, the population would decline because so many natives are leaving.
The business exodus is propping up Seattle’s real estate market. The state hits the news for bleeding edge political mandates while the public debates their cost. Why on Earth would anyone want to buy a home here? Quite a few, actually, despite housing prices in the state of California.
If you are a real estate investor, San Jose real estate has a track record of being one of the best long term investments in the country through the last ten years. Based on the last twelve months, real estate investors in San Jose, CA have found very good returns.
San Jose is part of Silicon Valley, a place where $100,000 a year or higher salaries from competing tech firms has driven up the cost of real estate. But what about the San Jose housing market itself? San Jose is the third largest city in California, home to roughly a million people. It has the highest cost of living of any area in the U.S., and it is one of the most expensive housing markets in the country. Let’s look at the state of the San Jose housing market 2019 before discussing why you’d want to invest in the San Jose real estate over growth markets.
San Jose Real Estate Market Forecasts 2019 & 2020
The median home value in San Jose is $1,039,700 on Zillow. San Jose home values have declined -1.1% over the past year and Zillow’s San Jose real estate market forecast is that the prices will fall -5.1% in 2020. The median list price per square foot in San Jose is $644, which is lower than the San Jose-Sunnyvale-Santa Clara Metro average of $690. The median price of homes currently listed in San Jose is $998,000 while the median price of homes that sold is $955,300. The median rent price in San Jose is $3,480, which is lower than the San Jose-Sunnyvale-Santa Clara Metro median of $3,600.
According to LittleBigHomes.com, the San Jose real estate market forecast for the 12 months ending with the 3rd Quarter of 2019 is positive. The Accuracy of the Trend Projection for San Jose is 79%. Accordingly, they estimate that the probability for rising house prices in San Jose is 79% during this period. If this Housing Market Forecast is correct, home prices will be higher in the 3rd Quarter of 2019 than they were in the 3rd Quarter of 2018.
San Jose Housing Market Forecast 2019 – 2021
The San Jose housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The Accuracy of the Trend Prediction for San Jose is 77%. Accordingly, LittleBigHomes.com estimates that the probability for rising house prices in San Jose is 77% during this period. If this Housing Market Forecast is correct,
Check this page each quarter for updates to the San Jose Real Estate Market Forecast.
San Jose Real Estate Market Trends
San Jose real estate market trends indicate a decrease of $105,000 (-10%) in median home sales and a 0% rise in median rent per month over the past year. The average price per square foot for this same period fell to $679, down from $737. Trulia has 1,891 resale and new homes for sale in San Jose, CA, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
The median sales price for homes in San Jose for Mar 1 to May 29 was $995,000 based on 1,707 home sales. Average price per square foot for San Jose was $679, a decrease of -8% compared to the same period last year. The median rent per month for apartments in San Jose for May 4 to Jun 4 was $3,500.
As per the real estate company named Redfin, the San Jose housing market is most competitive. Homes in San Jose receive 1 offers on average and sell in around 22 days. The average sale price of a home in San Jose was $1.04M last month, down 8.7% since last year. The average sale price per square foot in San Jose is $655, down 9.03% since last year. Homes typically receive 1 offer. Homes in the San Jose housing market sell for about 1% above list price and go pending in around 22 days. Hot homes in San Jose, CA can sell for about 5% above list price and go pending in around 10 days.
San Jose Housing Market Statistics
There are 2,094 homes for sale in San Jose, ranging from $80K to $14.5M on Realtor.com. 204 of which were newly listed within the last week. Additionally, there are 432 San Jose rental properties, with a range of $750 to $10.5K per month. In April 2019 the housing market in San Jose, CA was a seller’s market, which means there were roughly more buyers than there were active homes for sale.
In April 2019, the median list price of homes in San Jose, CA was $999K, flat year-over-year. The median listing price per square foot was $652. The median sale price was $1M. Homes in San Jose, CA sold for approximately the asking price on average in April 2019. On average, homes in San Jose, CA sell after 41 days on the market. The trend for median days on market in San Jose, CA is flat since last month, and flat since last year.
The median list price in San Jose is $999,950 on Movoto.com. The median list price in San Jose was less than 1% change from May to June. San Jose’s home resale inventories is 1,107, which increased 3 percent since May 2019. The median list price per square foot in San Jose is $642. May 2019 was $650. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in June.
San Jose, CA Single Family & Multi-Family Homes
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
As per the data from the real estate company called Neigborhoodscout.com, the median house price in San Jose, CA is $169,550, which indicates that home prices in San Jose are little above the national average for all the cities and towns in the U.S. Single family detached homes are the single most common housing type in San Jose, accounting for 53.38% of the city’s housing units.
Other types of housing that are prevalent in San Jose include large apartment complexes or high rise apartments ( 25.35%), row houses and other attached homes ( 11.06%), and a few duplexes, homes converted to apartments or other small apartment buildings ( 6.76%).
The most prevalent building size and type in San Jose are three and four bedroom dwellings, chiefly found in single-family detached homes. The city has a mixture of owners and renters, with 56.66% owning and 43.34% renting.
Currently, there are 745 single family homes for sale in San Jose, CA on Zillow. Additionally, there are 387 single family homes for rent in San Jose, CA. Under potential listings, there are about 6 Foreclosed and 204 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on multiple listing service (MLS).
San Jose Foreclosures And Bank Owned Homes 2019
Foreclosures will be a factor impacting home values in the next several years. In San Jose 0.1 homes are foreclosed (per 10,000), according to Zillow.com. This is the same as the San Jose-Sunnyvale-Santa Clara Metro value of 0.1 and also lower than the national value of 1.2.
The percent of delinquent mortgages in San Jose is 0.3%, which is lower than the national value of 1.1%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth.
The percent of San Jose homeowners underwater on their mortgage is 1.6%, which is higher than San Jose-Sunnyvale-Santa Clara Metro at 1.5%.
There are currently 289 properties in San Jose, CA that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 782. In May 2019, the number of properties that received a foreclosure filing in San Jose, CA was 18% lower than the previous month and 44% lower than the same time last year.
Home sales for April 2019 were up 0% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home in San Jose was $0. The median sales price of a foreclosure home in San Jose was $0, or 0% higher than non-distressed home sales.
San Jose Home Prices And Real Estate Appreciation 2019
San Jose real estate appreciated 77.36% over the last ten years, which is an average annual home appreciation rate of 5.90%, putting San Jose in the top 10% nationally for real estate appreciation.
Appreciation rates are so strong in San Jose that despite a nationwide downturn in the housing market, San Jose real estate has continued to appreciate in value faster than most communities. Looking at just the latest twelve months,
San Jose real estate appreciation rates continue to be some of the highest in the U.S., at 13.38%, which is higher than appreciation rates in 99.44% of the cities and towns in the nation. San Jose real estate appreciation rates in the latest quarter were at 1.48%, which equates to an annual appreciation rate of 6.04%.
The above statistics on real estate appreciation in San Jose were taken from NeighborhoodScout.com. You can visit their page for more information. Relative to California, our data show that San Jose’s latest annual appreciation rate is higher than 90% of the other cities and towns in California.
Where Should You Buy Real Estate In San Jose, CA?
There are 432 schools in San Jose, CA. There are 171 elementary schools, 92 middle schools, 65 high schools and 104 private & charter schools. There are 353 neighborhoods in San Jose. Some of the best neighborhoods in or around San Jose, California are Blossom Valley, Downtown San Jose and Willow Glen.
Almaden Country Club has a median listing price of $1.8M, making it the most expensive neighborhood. The Village is the most affordable neighborhood, with a median listing price of $700,000. Here are the ten best neighborhoods in San Jose, CA to invest in real estate because they have the highest appreciation rates (List by Neigborhoodscout.com).
Should You Invest In San Jose Real Estate In 2019?
Investing in real estate is touted as a great way to become wealthy. Is San Jose rental property good for investment? Planning to invest in the San Jose real estate? Many real estate investors have asked themselves if buying a property in San Jose is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
Let’s take a look at the number of positive reasons that can help those investors who are keen to buy real estate in the city of San Jose, CA.
1. The Job Market
Wherever there are jobs, there will be people going there to seek work. As of this writing, San Jose has an unemployment rate of less than 2.5%, while California’s hovers around 4%. The very high average pay rate for any job in San Jose is simply another reason for people to move here.
Note that the average salary is $84,000 a year. You can make twice that or more if you have the right technical expertise. This is the biggest factor driving the San Jose real estate market.
2. Big Tech Isn’t Going Anywhere
San Jose may have seen housing prices soften somewhat in 2018, but the high paying jobs that led to the incredible San Jose real estate market valuations haven’t gone anywhere. Businesses like Samsung, Qualcomm, Netgear, Cisco, Paypal and others are still located here.
In fact, Samsung opened a new campus here in 2015. Apple’s new San Jose campus is under construction. People who want to work for these firms will either move to San Jose or try to find a cheaper market and commute in.
3. The Student Market
Any housing market will see a large and generally well-funded population of renters if there is a university in town. San Jose has several that attract students from around the world. Investors in the San Jose real estate market could buy up properties to rent out to the thousands of engineering and computer graduate majors attending the University of California Berkley campus, UC Santa Cruz, Stanford University, Santa Clara University and California State University.
The students are coming to these schools in the hope of working for Big Tech, so they’re not going to leave if they have a choice.
4. Prices Have Softened but Demand Really Hasn’t
In January, 2018, Redfin ranked the ten hottest neighborhoods in the United States. Nine of the ten were in San Jose. When single home prices fall from 1.2 million to 1 million, homes now sit on the market for several days instead of being snapped up immediately.
The median price for a new home or condo was $750,000 in 2018, down from a record of nearly $800,000 a few months prior. If you want to invest in the San Jose housing market, you should do it now while things are – relatively speaking – affordable.
5. San Francisco Is Still Relatively Expensive
We mentioned San Francisco tech firms moving jobs to Seattle to reduce labor costs or pay the same rate while giving workers a higher standard of living. However, the less often mentioned trend is San Francisco and Palo Alto firms moving to the South Bay because it isn’t as much of an inconvenience.
After all, many of their own workers are moving to the South Bay to be able to afford a home. Smaller firms are starting up in San Jose instead of Mountain View because it is what they can afford.
6. Group Living/Working Arrangements Are the New Hot Housing Option
Co-working space allow small businesses and individuals to share work space at a lower overall cost per head. Co-living spaces bring the same economies of scale to individuals. You may have a bedroom to yourself or share it, but amenities like the laundry room, kitchen and entertainment are shared.
It is hard to think of a more profitable opportunity for investing in the San Jose real estate market. Buy a building and convert it into a co-living space, charging several hundred dollars a month per bed for students starting up their own company or working for a Big Tech firm.
If the dorm-like residence is next to co-working spaces, it is a marriage made in heaven.
7. Micro-housing Is Making a Comeback
Co-living spaces maximize personal space and quality of life by minimizing the size of bedrooms while having people share living rooms, bathrooms and gyms. However, not everyone wants to live in one of these “dorms for grownups”, but they can’t afford the $2500-3500 a month rent for a conventional apartment.
San Jose is meeting demand by authorizing construction of new micro-apartments and renovation of existing structures to create micro-apartments. San Francisco is considering amending their building code to reduce apartments from a minimum of 290 square feet of livable space to 150.
San Jose is ahead of the curve with the 150 square foot minimum. If you want to buy and renovate single family homes or apartment buildings to carve up into many smaller and profitable units, now is the best time to invest in the San Jose real estate market.
In fact, hotels are being converted to micro-apartments already to meet this newly affordable option in the San Jose housing market.
8. The Incredible ROI of RV Parks
RV parks have always been a potentially profitable venture for real estate investors. The tenant owns the home. The main requirements are land, zoning permission, and utility hookups for each trailer or RV parking spot. Laundry facilities and a small “store” can become profit centers.
This is true of RV parks in moderately busy areas, but the return on the investment is incredible in San Jose. A “cheap” RV spot in the city costs $1500 a month, a price you pay elsewhere for a three bedroom single family home. If you buy one, you’ll receive significant cash flow.
If you can create legal RV parking spots, you’ll cater to the hundreds of people living in illegally parked RVs throughout town and be helping provide safe, affordable housing.
9. Demographic Momentum
Silicon Valley is dominated by young professionals, many of whom want to start families. If you can invest in housing that caters to their needs and fits their budget, they’ll pay a premium for it. And as long as Silicon Valley continues to generate so many high paying jobs, it will continue to attract people who will eventually start families.
If families continue to be priced out of the San Jose housing market, you can still rent the property out to young tech workers willing to pay $2000 a month to rent a bedroom in a single family dwelling.
10. Company Provided Housing Is on the Rise
If you want to invest in the San Jose real estate, you may not need to buy and renovate. Instead, if you know of industrial or commercial properties near major employers they may need to convert to employee housing, you could buy now and hold until it sells. If that doesn’t happen, you could still turn it into co-working space.
San Jose Real Estate Investment
Maybe you have done a bit of real estate investing in San Jose, CA but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. If you are a home buyer or real estate investor, San Jose real estate investment definitely has a track record of generating one of the best long term returns in the U.S. through the last ten years. If you invest wisely in San Jose real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments, you should focus on markets with relatively high population and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like San Jose, CA. Big Tech makes San Jose one of the hottest real estate markets in the country. While the intense pressure is driving some companies and people out, the strong financial numbers continue to make the San Jose housing market a good place to invest. The unique redevelopment opportunities should not be overlooked.
Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in San Jose is your ability to find great real estate investments in that area.
According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.
We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in San Jose real estate in 2019. However, we always recommend to do your own research and take help of a local real estate investment counselor.
Other Best Places To Invest in Real Estate in 2019
Another hot market for investors in 2019 is going to be the Seattle real estate market. The latest Seattle real estate market trends shows that the average Seattle home sold for 6.3% above its listing price. These days, it’s averaging 6.6% below that price. And that comes as listing prices themselves are falling, dropping 7% since the spring.
The Seattle’s real estate market has long been second to Silicon Valley, but its strong economy, diverse population, and better regulatory climate are bringing refugees from California and migrants from around the country and world to live here.
Regardless of the area’s weather, the Seattle housing market’s outlook can only be described as sunny. Seattle has repeatedly hit lists as being among the top cities for real estate sellers to get the highest return on their investment. Property values have gone up consistently for years.
Rental rates are high and continue to rise, guaranteeing ROI for those who buy and hold properties. We’ve already addressed the fact that you can raise rents as necessary to match the market. This means you will certainly be able to profit from the large rental market in Seattle whether you buy and hold or buy and flip.
Similarly, the Phoenix real estate market trends show that it is going to be a hot investment destination for new real estate investors. Phoenix real estate market trends indicate an increase of $16,000 (7%) in median home sales and a -3% drop in median rent per month over the past year.
As per Trulia, the average price per square foot for this same period rose to $162, up from $148. Phoenix deals with a large retiree population, both permanent and seasonal. To accommodate aging in place, they’ve loosened the rules on building “accessory dwelling units”, commonly known as mother-in-law suites.
The city also recognizes the need for affordable housing, and they allow people to build and rent out ADUs as affordable housing, especially if the property is within walking distance of public transit. Buy a house, rehab it and build a granny flat, and you have two rental properties for not much more than the price of one. And the city is almost certain to approve it, because they want denser development.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
San Jose demographics and universities
Big Tech isn’t going anywhere
San Francisco firms moving to San Jose
Coliving / coworking
Overall job market
Company provided housing
Housing Market Data, Trends and Statistics
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