Rents Trend Downward, Development Up
San Jose’s multifamily fundamentals stalled at the beginning of the last quarter, as high interest rates continued to leave their mark across the nation, according tho the latest San Jose multifamily market report. Rent growth stood at -0.6% on a trailing three-month basis through October—50 basis points lower than the U.S. figure—to an overall average of $3,042. Demand for multifamily remained sturdy, however, as the occupancy rate in stabilized assets was up 10 basis points year-over-year, to 96.0% as of September, 100 basis points above the U.S. rate.
Continued tech layoffs and an overall slower economy contributed to San Jose’s 2.6% employment growth on a trailing 12-month basis through August, just above the 2.5% national rate. According to preliminary data from the Bureau of Labor Statistics, unemployment stood at 3.3% as of September, up 90 basis points year-over-year. A total of 18,400 jobs were added in the 12 months ending in August, with education and health services accounting for more than half of that (10,300 positions). Losses were recorded by professional and business services (down 4,000 jobs) and manufacturing (down 2,800 jobs).
Construction activity remained the only fundamental metric on a positive note. San Jose developers delivered 2,361 units year-to-date through October—slightly above the 2022 total. The metro had 10,333 more units under construction, while an additional 42,700 were in the planning and permitting stages.
Read the full Yardi Matrix San Jose Multifamily Market Report: December 2023