San Jose-5th Strongest Real Estate Market

Mortgage concept

According to a study by Veros Real Estate Solutions, San Jose is projected as one of the top markets in the US. The third largest city in California, located within the fastest growing county (1.8% population growth Y-O-Y 2013), San Jose continues to top the charts in real estate. With a projected 9.7% home appreciation in 2014, 97% occupancy rate, 10% projected increase in average home rents, and a 1.5% increase in employment rate, San Jose home owners will continue to reap the rewards of steady growth out of the great recession.

Is this trend sustainable? Only if city planners, lenders, and employers understand and plan for housing and housing incentives that are needed. Owner occupied percentages continue to drop and are hovering around 57%. Compared to cities like Paris, France with only 47% owner occupied properties, San Jose faces a challenge of balancing affordability with limited land to build.

Younger generations wanting to buy, but fearing another devastating real estate “bust” need to be educated on market cycles, and the stability brought to the market via Dodd-Frank legislation on lending guidelines. Qualified mortgages reduce the risk to our communities and our economy. If investors are willing to place all cash offers on U.S. real estate with 100% risk at a rate of 30% of all real estate purchase in 2013 for Santa Clara County, then leveraging a risk of 20% should be appropriate for the remaining home buying group. These cash investors have not only helped to stabilize the housing market, but have also increased the buffer zone of equity needed to insure typical market dips do not devastate the investments we have all made in our homes.

The continued appreciation is dependent on smart investing, saving, and maintaining our homes and our communities.


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