San Jose, CA

Market Update

San Jose's population has shown a notable increase, reaching approximately 1.99 million in the fourth quarter of 2026, reflecting a year-over-year growth rate of about 2.6%. This growth follows a period of slight fluctuation, with the population at 1.94 million in 2023 and 1.95 million in 2021. Despite this upward trend, the region has experienced a net migration loss of 606 individuals, which may impact housing demand dynamics. The median household income stands at $164,801, while the unemployment rate is recorded at 5.3%. The employment figure of over 1.06 million, combined with a renter share of 45.5%, underscores the demand for housing in the area.

In the multifamily sector, the median gross rent remains at $2,827, with year-over-year rent growth recorded at 3.4%. The HUD Fair Market Rents for a two-bedroom unit are significantly lower than the asking rents, which are currently $3,450. This disparity indicates ongoing affordability challenges for renters in the market. The average weekly wage of $4,027 further emphasizes the pressure on housing costs, as wages have not kept pace with rent increases, potentially impacting tenant retention and demand for higher-end units.

Capital market activity over the trailing 24 months has seen 422 transactions with a total dollar volume of approximately $2.97 billion, yielding a median price per unit of $487,500. The multifamily cap rate is currently at 4.91%, which is roughly 213 basis points tighter than the national median of 7.04%. This reflects a strong investment appetite in the San Jose market, despite the challenges posed by net migration losses. As reported by CBRE Research, the multifamily sector remains resilient, suggesting continued interest from investors seeking stable returns in a competitive landscape.