We will discuss the latest San Jose real estate market trends & news and find out how they can affect the investors and homebuyers in the latter half of 2020. The shutdown due to coronavirus pandemic had an impact on California’s economy and the real estate sector as well. 2020 started with low inventory in San Jose, and a strong seller’s real estate market. The number of home sales in January and February were really strong. Then came the shelter-in-place order due to the COVID-19 pandemic. The impact of the pandemic on the San Jose housing market was felt in April when home sales started dropping massively.
Sales of single-family, re-sale homes dropped by 35.8% dropped in April and 51.6% in May compared to last year. Inventory of single-family, re-sale homes was down 39.6% compared to last year. The median sales price for single-family, re-sale homes in April was up 3.2% compared to last year. The average sales price was up 2.2% year-over-year. As the economy begins to open up, the San Jose real estate market is expected to bounce back in the coming months. The pending home sales in May have increased as compared to April.
The latest “SAN JOSE HOUSING MARKET REPORT” is given below.
Let’s talk a bit about San Jose and the surrounding metro area before we discuss what lies ahead for investors and homebuyers. 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 in any area in the U.S., and it is one of the most expensive housing markets in the country.
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 debate 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.
Let’s find some other factors that make San Jose a good place to invest for wealthy buyers. You will get a fair amount of knowledge of the fundamentals of this hot real estate market. Please note that real estate prices are deeply cyclical because its demand side is impacted by economic cycles. Much of it is dependent on factors you can’t control. The recent example is COVID-19 which has badly impacted our economy. Therefore, many variables can potentially impact the value of the real estate in San Jose in 2020 (or any other market) and some of these variables are impossible to predict with 100% accuracy.
San Jose Housing Market Trends & Statistics 2020
We shall now discuss some of the most recent San Jose real estate trends & news, and compare it with the past couple of years. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region. San Jose is also one of the hottest real estate markets in the nation. In the past ten years, the annual real estate appreciation rate has amounted to 6.96%, according to NeighborhoodScout.com. This puts it in the top 10% nationally for real estate appreciation.
San Jose is a moderately walkable city in Santa Clara County with a population of approximately 942,788 people. In May, the Median Sold Price of Existing Single-Family Homes in Santa Clara was $1,365,000, a year-over-year increase of 2.2%. As compared to April, the median sold price dropped by -1.7%. SFR Home sales dropped by -51.1% as compared to last year and -12.3% as compared to last month.
Below is the latest monthly report of the San Jose Housing Market. The source of this report is the CALIFORNIA ASSOCIATION OF REALTORS.
The report compares key housing metrics of the San Jose housing market from May 2020 with May 2019.
- Existing SFR Home Sales in San Jose dropped by 52.5% from last year.
- Existing SFR Median Price was $1.2M, up 3.9% from last year.
- Active Listings dropped by 35%.
- Median Days on Market was 10.
- Sales-to-ListPrice % was 100.2%.
- % of Active Listings with Reduced Prices was 19.6%.
On Movoto.com, San Jose’s current home resale inventory number is 704, which has decreased by 33 percent from a year ago. Compared to last month (May) the inventory has increased by 2%. The median list price in San Jose is $999,888. The median list price in San Jose went down 3% from May to June. The median list price per square foot in San Jose is $654. In May 2020 it was $666. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in June.
|San Jose Housing Market Statistics||Current||1 Month Ago||1 Year Ago|
|Median List Price||$999,888||$1,032,290-3%||$999,999|
|Median Days on Movoto||26||24+8%||23+13%|
|Median Home Size||1,581||1,582||1,600-1%|
Data Courtesy of Movoto.com
San Jose Real Estate Market Forecast 2020 – 2021
What are the San Jose real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Since 2012, the median home price in San Jose has appreciated by roughly 38% from $491,000 to $1,073,255. Looking at the data, it is evident that the prior 3 years have been fluctuating quite a bit and no recent peak as high as of May 2018. From the mid of 2018, the San Jose home values saw a sharp decline. In 2019 the market remained almost flat. The median price has increased by 2.6% over the 12 months.
The Zillow Buyer-Seller Index (BSI) shows that San Jose is currently a cool buyer’s real estate market. This is computed monthly. According to their index, there exists a general lack of demand in San Jose, and homes can linger on the market longer and ultimately sell for less, putting negotiating power in the hands of buyers. In other words, based on the last month’s key housing market indicators, current supply is exceeding the demand, giving buyers an advantage over sellers in price negotiations. There are more homes for sale than there are active buyers in the marketplace.
The latest San Jose real estate market forecast is that the home prices may remain flat or decrease by 0.7% – in the next twelve months. This is due to the short term impact of the ongoing pandemic which has impeded the real estate sales activity in the entire nation.
Here is a short and crisp housing forecast of the San Jose Metropolitan Statistical Area for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for San Jose is 77% and it is predicting a positive trend. LittleBigHomes.com estimates that the probability of rising home prices in San Jose is 77% during this period. If this price forecast is correct, the San Jose-Sunnyvale-Santa Clara, CA home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
The change in home prices for San Jose-Sunnyvale-Santa Clara, CA is shown below for five time periods. San Jose appreciated 1.82% in the Last Quarter. At that rate, the San Jose Real Estate Market was ranked 160th out of 381 metropolitan Real Estate Markets. So San Jose, CA performed better in the Last Quarter than 58% of the 381 metropolitan areas covered in LittleBigHomes.com.
|Time Period||San Jose Real Estate Appreciation|
|Last 5 Years||60%|
|Last 10 Years||74%|
|Last 20 Years||238%|
Here is the visual representation of historical San Jose home prices and the latest forecast until March 2021.
The question now is what happens moving forward. These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? It is quite evident that the ongoing pandemic has had a major impact on home sales. San Jose home sales dropped sharply in April & May from both the previous month and year as the housing market began to feel the full impact of the coronavirus outbreak and the state’s stay-at-home order. In fact, for the entire state of California, the last two months saw the worst month-to-month sales decline in more than four decades.
At the same time, the industry is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges. While some economic activity will resume as the state gradually reopens, the housing market is expected to remain sluggish for the next couple of months until stay-in-place restrictions are enforced by the government.
According to Homeownerexperience.com, prices in Santa Clara County and the greater bay area have been fluctuating quite a bit over the last 2 years and more. February 2020 closed sales showed prices were back up. The entire South Bay Area was in a very low inventory and started as a seller’s real estate market in 2020. With strong buyer demand against low inventory, many properties for sale were receiving multiple offers. 2020 was shaping up to be a strong home sale year with similar characteristics to early 2018.
Most likely the San Jose housing market should remain neutral in the latter half of 2020. Affordability is a big issue in San Jose but it remains one of the most affordable areas of Silicon Valley. Usually, this region remains skewed to sellers due to low inventory. Now that many sellers have delayed their plans, inventory is near records lows. Therefore, home prices may remain flat to favor buyers. We can also expect prices to slightly appreciate due to the supply and demand imbalance.
As the economy starts opening all over the country the home sales in the San Jose housing market would rebound in the coming months. For June’s housing report, we expect to see a rebound in closed sales with more homebuyers entering the bidding war. The inventory peak will likely be later than usual and may not peak until September or October this year.
Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment.
For sellers, it is a great time to sell. Motivated buyers are looking for houses for sale, and you are not competing with as many property owners. Many sellers have chosen to back out amid this pandemic.
For buyers, the inventory is relatively increasing & mortgage rates are very low. So they should take advantage of scooping up their favorite deals which otherwise are taken away by seasoned investors in the bidding wars. It is a win-win scenario for both sellers and buyers.
San Jose Housing Market: Where Can You Find Homes For Sale?
San Jose has a mixture of owner-occupied and renter-occupied housing units. According to Neighborhoodscout.com, a real estate data provider, three and four-bedroom single-family detached homes are the most common housing units in San Jose. Other types of housing that are prevalent in San Jose include large apartment complexes, duplexes, rowhouses, and homes converted to apartments.
Single-family homes account for about 53.00% of San Jose’s housing units. About 43.60% of residents rent a home. At the national level, 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. With 2020 being, theoretically, in the middle of a boom, there are still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
Currently, there are 963 homes for sale in San Jose, CA on Zillow, an online real estate database company. Additionally, there are 1233 homes for rent. Under potential listings, there are about 1 Foreclosed and 164 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
- The median list price per square foot in San Jose is $610, which is lower than the San Jose-Sunnyvale-Santa Clara Metro average of $652.
- The median price of current listings is $925,000.
- The median price of homes that were sold in March was $983,400.
- The median rent price in San Jose is $3,400, which is lower than the San Jose-Sunnyvale-Santa Clara Metro median of $3,500.
There are currently 1731 homes for sale and 525 homes for rent in San Jose, CA on Realtor.com, a real estate listings website. These may include open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. According to their statistics, in May 2020, San Jose was a balanced real estate market, which means there was a healthy balance of buyers and sellers in the market. Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in San Jose have managed to hold good leverage in these negotiations in the past month.
On average, they could sell homes for 100.01% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher. The median list price of homes in San Jose, CA was $1.1M, trending up 6.4% year-over-year. The median listing price per square foot was $666. The median sale price was $1M.
San Jose Housing Market: Foreclosure Statistics In 2020
Here are some foreclosure statistics of the San Jose housing market. As per the San Jose foreclosure data provided by Zillow, in San Jose 0.1 homes are foreclosed (per 10,000). 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%. 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 208 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 436. In May, the number of properties that received a foreclosure filing in San Jose, CA was 36% lower than the previous month and 69% lower than the same time last year.
|No. of Foreclosures in San Jose||208 (RealtyTrac)|
|Homes for Sale in San Jose||436|
|Median List Price||$998,000 (1% rise vs Apr 2019)|
According to RealtyTrac, the zip code with the highest foreclosure rate is 95138, where 1 in every 3140 housing units is foreclosed. So, you’d find a lot of distressed sellers in this area and get some discounted off-market deals. 95123 zip code has the lowest foreclosure rate, where 1 in every 11567 housing units becomes delinquent.
San Jose Real Estate Market: Is It A Good Place For Investment
Is San Jose a Good Place Real Estate Investment? Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying rental property in San Jose is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the San Jose housing market’s historical and current trends for answers on why to put resources into this market.
Purchasing an investment property is a little different from shopping for your car or primary residence. While you still want to get the most for your money, if you are looking to make a profit, you don’t want to buy the most expensive property on the market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, a turnkey investment property in San Jose that you might move into or sell at retirement in the future! Either way, knowing your profit potential and purpose is the first thing to consider.
Keeping aside the short-term impact of the ongoing pandemic, let’s take a look at the number of positive things going on in the San Jose real estate market which can help investors who are keen to buy an investment property in this city.
1. Job Growth in San Jose
Wherever there are jobs, there will be people going there to seek work. San Jose has an unemployment rate of less than 2.7%, while the national average hovers around 3.9%. Future job growth over the next ten years is predicted to be 38.9%, which is higher than the US average of 33.5%. 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.
Note: Due to Covid-19 there has been a surge in unemployment claims all over the country. To give you an update – According to the State of California (EMPLOYMENT DEVELOPMENT DEPARTMENT), the unemployment rate in the San Jose-Sunnyvale-Santa Clara MSA was 11.2 percent in May 2020, down from a revised 12.0 percent in April 2020, and above the year-ago estimate of 2.2 percent. This compares with an unadjusted unemployment rate of 15.9 percent for California and 13.0 percent for the nation during the same period. The unemployment rate was 15.5 percent in San Benito County, and 11.0 percent in Santa Clara County.
2. San Jose’s Big Tech Market
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. Samsung opened a new campus here in 2015. Apple’s new San Jose campus is under construction. To underscore the strength of the entire Bay Area economy, over the one-year period that ended in July 2019, the nine-county region added slightly more than 100,000 jobs — one-third of the jobs that the entire state of California gained during the same 12 months.
Santa Clara County added 4,900 jobs in July while other metro centers in the Bay Area could not match the numbers. The robust tech sector is still expanding and fuelling the becoming of this region. Google, in particular, has prepared multiple springboards to catapult the search giant to dramatic expansions in Mountain View, Sunnyvale, North San Jose, and downtown San Jose. The result of all that could well equate to continued hiring at a brisk pace. 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. San Jose’s Growing Rental 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.
According to Sanjoseca.gov, only 21% of San Jose homes remain affordable to median-income households. In other words, only 1 in 5 families can afford to buy a median-priced home in San José. Renters must earn $53/hour ($109,520/year) to afford the average effective monthly rent for a 2-bedroom apartment of $2,738. Buyers must earn $95/hour ($197,314/year) to afford a median-priced single-family home. Annual income to afford the average rent for a one-bedroom apartment is ($89,440).
According to Rentcafe.com, 86,372 or 26% of the households in San Jose, CA are renter-occupied while 235,463 or 73% are owner-occupied. The rents are moderately rising year-over-year and renters spend a higher %age of income on rent. The average March rent in San Jose was $2,817 — a 3.2 percent increase from 2019. As of May 2020, the average rent for an apartment in San Jose, CA was $2985 which is a 1.81% increase from last year when the average rent was $2931, and a 0% increase from last month when the average rent was $2985. One-bedroom apartments in San Jose rent for $2619 a month on average (a 1.34% increase from last year) and two-bedroom apartment rents average $3241 (a 2.68% increase from last year).
When evaluating a rental investment, working out the vacancy rate is very important. It is helpful to know the market’s average vacancy rate so you can compare your property’s current performance. According to data compiled by the online lending site Lending Tree, San Jose had the lowest vacancy rate in the entire U.S. in the summer of 2019. Of the 50 major cities listed, San Jose’s vacancy rate of 4.26 percent citywide was the lowest. The figures for San Jose are not only for the city of San Jose but also include the larger Santa Clara County metro region. Generally speaking, 2% to 4% is considered a decent rate for metropolitan areas like San Jose.
According to Sanjoseca.gov, in Q4 2019, the average vacancy rate in San Jose was 4.9%, close to the “Healthy” Rate. The national average was 6.4%. The studio apartments had the highest vacancy rate of 5.7% whereas 3-bedroom apartments had the lowest vacancy rate of 4%. The average rent price was down 0.8% quarter-over-quarter and up 2.6% year-over-year.
The most expensive San Jose neighborhoods to rent apartments in are Downtown, North San Jose, and Buena Vista. The cheapest San Jose neighborhoods to rent apartments in are East San Jose, Cambrian Park, and Evergreen.
4. San Jose is Relatively Cheaper Than Silicon Valley
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 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.
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.
San Jose ends up serving as a place for middle-class people working in these areas to find more affordable housing. Similarly, due to office space costs, more middle-class jobs locate themselves in San Jose and vicinity rather than further north in Palo Alto or Mt. View. San Francisco on the other hand is the job center for that area, and people with high paying jobs end up having to pay a premium to live close to said jobs, leaving only the richer people able to afford to live in SF.
Co-working space allows small businesses and individuals to share workspace 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. 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 a co-working space.
5. San Jose’s 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 the construction of new micro-apartments and renovation of existing structures to create micro-apartments.
San Francisco is considering amending its 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. Hotels are being converted to micro-apartments all ready to meet this new affordable option in the San Jose housing market.
The New Hotel Balmoral offers a new rental option in downtown San Jose. 10 micro-apartments, ranging from 344 to 926 Square Foot and equipped with internet, cable TV, refrigerator, and microwave, can be rented for 2,200 dollars a month. The price includes two cleanings per week and access to the gym. Just recently, a San Jose housing development with 400-square-feet micro-apartments has been approved near Google transit village.
6. San Jose’s House Prices Are Now Rising Slowly
San Jose has a large population of highly educated professionals. Due to the strong economy, there is a great deal of new construction, with commercial and residential buildings being erected everywhere. The retail infrastructure has undergone massive improvement since the 1990s. It recently became the tenth-largest city in the United States, with over a million people, but only about 40% of its land area is developed. San Jose’s downtown is small relative to its population size. The majority of San Jose is suburban.
Although the inventory is up due to the pandemic it hasn’t made a dent in the problem of the housing shortage. San Jose’s total housing stock is growing year-over-year but it doesn’t translate into measurable relief on housing demand. However, over the past couple of years, the growth of inventory has significantly contributed to a slowdown in price appreciation. Three years ago, home prices in San Jose were rising by double-digits year over year. Then they leveled off followed by a declining phase. Inventory growth has played key a role in this reversal. Zillow’s latest forecast until March 2021 is that San Jose’s home values will decline by -0.7%.
San Jose Investment Properties: Where To Buy In 2020?
Maybe you have done a bit of real estate investing in San Jose 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. In any property investment, cash flow is gold. Should you consider investing in the San Jose real estate? If you are a home buyer or real estate investor, San Jose real estate investment has been generating one of the best long term returns in the U.S. through the last ten years. Big Tech makes San Jose one of the hottest real estate markets in the country. Among all the cities of Silicon Valley Bay Area, San Jose city probably has the perfect balance of residential and commercial areas.
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. If you want to invest in the San Jose housing market, you should do it now while things are – relatively speaking – affordable. The best part is low competition among buyers due to pandemic, and historically low mortgage rates. Zillow’s forecast until March 2021 is that the San Jose housing market will remain flat. You can still find affordable housing in this big city which has fantastic neighborhoods. The economy is currently strong, fueled by the vibrant high-tech sector.
Good cash flow from San Jose investment property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in San Jose in a growing neighborhood would be key to your success. If you invest wisely in San Jose real estate, you could secure your future. The best investment is now looking for a rental property that will generate good cash flow. Your best tenants would be the retirees who intend to relocate to San Jose and want to purchase property to rent out.
The running costs for owning and managing a San Jose rental property should not be high. While hiring a property management company you should expect to give up roughly ten percent of the rent for each property they manage. Remember to factor this loss into your calculations when budgeting for a new rental property. The three most important factors when buying a real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties.
Demand would raise the price of your San Jose investment property and you should be able to get a good return on your investment over the long term. The neighborhoods in San Jose must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in San Jose might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio.
It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods. The inventory is low, but opportunities are there. Nine of Redfin’s 10 Hottest Neighborhoods of 2018 were in the San Jose metro area. While the San Francisco peninsula has traditionally been the hottest of the hot places, we’re seeing it become unaffordable for even the tech giants that helped create its demand in the first place,” said Redfin Silicon Valley agent Kalena Masching. “The result has been a tech-worker migration to the South Bay charged by people looking for relative affordability, highly rated schools, short commutes, and access to jobs.”
Bucknall topped the list. This neighborhood is dominated by single-family homes, which sets it apart from many neighborhoods in the area that have more mixed-use or multi-family homes.
White Oak is a neighborhood that many first-time homebuyers choose because it has a lower price point and is close to vibrant Downtown Campbell and Downtown Los Gatos.
Ortega is becoming famous among homebuyers because of its proximity to the Cupertino and Santa Clara Apple campus, its highly rated schools, and its access to highways 101 and 280.
Lakewood is a good commuter neighborhood and one of the few remaining places in the San Jose metro area where people can get a home for less than $1 million without getting deep into San Jose or going to the East Bay. It’s close to Mission College and a fairly new shopping plaza with a beautiful movie theater, small grocery store, and plenty of restaurants and pubs to keep up with demand. More information regarding all the 10 hottest neighborhoods in San Jose can be found here.
Niche.com also comes up with the best neighborhoods for buying a house in San Jose in 2020. Here are a few of them.
San Jose | California Real Estate Investment Opportunities
California housing market is the focus of many U.S. and foreign real estate investors. Apart from the San Jose real estate market, you can also invest in multiple cities in California. Here are the other two big cities in California where a real estate investor should look into buying investment properties.
California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. The Los Angeles real estate market has many points in its favor beyond its sheer size. The strong market fundamentals make the Los Angeles housing market a good place to invest if you’re looking at buying real estate in California. Homeownership rates in California have been declining for years. The sea change has been the growth of renting among the middle and upper classes.
For example, a third of Los Angeles residents with incomes over $100,000 rent instead of own. Baby Boomers downsizing their homes choose to rent condos and homes that others maintain. Millennials who have a good income often say their parents lose their homes in the Great Recession and choose to rent instead. This is driving demand for luxury Los Angeles real estate market, whether condos, apartments with concierges, or luxury homes rented instead of purchased so that the resident can easily move if they lose their jobs.
The San Diego real estate market offers an ideal mix of limited supply, high demand, and excellent income potential. If you’re going to invest in California, it needs to be in San Diego. The San Diego real estate market has been ranked among the ten most expensive real estate markets in the country, though it ranks below several other West Coast cities. This creates massive demand for San Diego rental properties by those who simply cannot afford to buy homes. The rental market will continue to grow as the city grows an estimated 500,000 by 2050, adding tens of thousands each year.
San Diego also has many tourist attractions. Balboa Park is home to the San Diego Zoo, the Air and Space Museum, the Natural History Museum, the Desert Garden, the local youth Symphony, a Japanese garden, and a golf complex. There’s a SeaWorld in San Diego, an MLB stadium, the USS Midway Museum, and the San Diego zoo safari park. On top of this is the mild weather and proximity to the beach. Any San Diego rental properties in easy reach of these attractions command a premium on rental sites like Airbnb. Demand for rentals in the San Diego real estate market soars during Comic-Con, one of the biggest comic conventions in the country.
Fresno is the epitome of “the Valley” and it was also among the nation’s top housing markets in 2019. Fresno continues to be ignored in favor of hot coastal markets like San Francisco and Los Angeles. We can say that the Fresno real estate market is more friendly to landlords than somewhere like San Francisco. For example, your Fresno real estate investment property isn’t subject to rent control unless you’re running a trailer park. Nor does Fresno follow in San Fran’s habit of nearly banning new construction. It is also much easier to evict someone in Fresno who doesn’t follow the terms of the lease. Furthermore, Fresno allows you to remove tenants through no fault of their own.
Let us know which real estate markets you consider best for real estate investing in California!
Remember, caveat emptor still applies when buying a property anywhere. Some of 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.
Latest Market Data, Trends, and Statistics
San Jose demographics and universities
Big Tech isn’t going anywhere
San Francisco firms moving to San Jose
Overall job market
Company provided housing