The San Jose real estate market continues to develop into a goldmine for investors and homeowners in 2016. Home prices, appreciation rates and total equity have all surpassed the national average, as the second quarter saw improvements in nearly every fundamental indicator. Even better, the median home price in San Jose topped the million dollar market for the first time ever. Along with sky-high housing figures, new housing construction and the local economy continue to grow relative to last year, which should benefit San Jose real estate investors and homeowners. The San Jose real estate market remains one of the hottest in the country, and the trend should continue for the foreseeable future.
San Jose, CA Real Estate Market Statistics:
While home prices for the San Jose real estate market continue to reach astronomical heights, appreciation rates have followed suit. The second quarter saw one-year and three-year appreciation rates of 10.7 percent and 34.2 percent respectively, compared to the national average of 4.9 percent and 17.8 percent. Price appreciation and principle payments in the last three years have boosted total equity growth since the recession. This highlights the vast opportunity and potential for San Jose real estate investing. For those considering San Jose real estate investments, the following outlines appreciation rates in previous years:
- Homes purchased in the San Jose, CA housing market one year ago have appreciated, on average, by $121,178. The national average was $14,963 over the same period.
- Homes purchased in the San Jose, CA housing market three years ago have appreciated, on average, by $318,034. The national average was $46,878 over the same period.
- Homes purchased in the San Jose, CA housing market five years ago have appreciated, on average, by $532,253. The national average was $82,353 over the same period.
- Homes purchased in the San Jose, CA housing market seven years ago have appreciated, on average, by $639,914. The national average was $77,054 over the same period.
- Homes purchased in the San Jose, CA housing market nine years ago have appreciated, on average, by $327,679. The national average was $31,126 over the same period.
The San Jose real estate market continues to achieve some of the largest equity gains in the country. The last nine years have witnessed total equity for San Jose real estate outperform the national average in record-pace. San Jose real estate investors and homeowners saw their largest gain in year nine, when total equity for homes reached $639,914.
Another factor benefiting the San Jose real estate market are foreclosures. According to RealtyTrac, the number of San Jose properties in some stage of foreclosure was 887 during August 2016. The number the San Jose properties in foreclosure last month was 13 percent lower than the previous month, and 20 percent lower than the same time last year. However, while the number of San Jose foreclosures went down, the number of REO properties went up. The number of bank owned properties in San Jose increased 11.8 percent from the previous month, and 35.7 percent from the same time last year.
San Jose, CA: Real Estate Market Summary:
- Current Median Home Price: $1,085,00
- 1-Year Appreciation Rate: 10.7%
- 3-Year Appreciation Rate: 34.2%
- Unemployment Rate: 4.1%
- 1-Year Job Growth Rate: 3.9%
- Population: 998,537
- Median Household Income: $77,000
San Jose, CA: Real Estate Market (2016) — Q2 Updates:
The median home price for the San Jose real estate market was $1,085,000 during the second quarter, compared to the national average of $239,167. While prices continued to grow relative to last year, gains in the last three years have extended the trend of positive price growth after the recession.
Along with scorching home prices and appreciation rates, San Jose is home to a thriving local economy. Employment has held up and is on an upward trend, as unemployment in San Jose is better than the national average and improving. The second quarter saw an unemployment rate of 4.1 percent, compared to the rest of the country at 4.9 percent. Additional, job growth continued to outpace the national average, as the one-year rate reached 3.9 percent in Q2, compared to 1.9 percent achieved by the rest of the country.
The drawback of the San Jose real estate market has been home affordability. Although home prices and appreciation rates far and away outpace the national average, so does the cost of living there. Homeowners paid 28.9 percent of their income to mortgage payments in the second quarter, as opposed to the national average which paid 15.8 percent. Although the home affordability for the San Jose real estate market has historically been strong, it’s become one of the weaker markets as of late. However, an eruption of new housing construction could help to curb that later in the year. The second quarter saw new housing construction for San Jose rest 52.3 percent above the long-term average, while single-family housing permits settled at 5.1 percent. Although below the national average, new housing should help to assist affordability in the San Jose housing market.
The San Jose real estate market is expected to exhibit higher price growth in the next 12 months. The National Association of Realtors predicts San Jose real estate will grow at a rate of 4.0 percent during the second-half of the year, compared to the national average of 3.6 percent. That said, the San Jose real estate market should continue its reign as the hottest real estate market in the country.
