The hottest housing market in 2019? Think San Jose

According to a report by Zillow, San Jose with its low unemployment rate and double digit home value growth, projects to be the hottest housing market in the United States in 2019. Just as it was in 2018, as a matter of fact.

Income growth remains strong in San Jose with the average household income rising by 6.8 percent in 2018. The good news for potential home buyers is that inventory of available homes in San Jose has nearly doubled in recent months.

However, change could be coming in the real estate market as analysts see a move towards the South where homes in Jacksonville and Orlando, for example are selling for six times cheaper than San Jose and rents are three times cheaper on average.

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Bay Area Economic Boom to Continue; Housing Crisis to Worsen

It is the best of times, it is the worst of times… At a recent San Jose State University economic summit the general consensus as jobs – and pay – continue to increase across the Bay Area, which is only exacerbating the housing crisis.

It is estimated that California needs construction of roughly 210,000 to 250,000 residential units a year but is building only 110,000 annually.

As more and more tech companies are moving or expanding to San Jose, the city is responding by pledging to build 25,000 residential units in San Jose through the end of 2022. 12,000 have either been approved or being reviewed for potential approval, although only 3,000 are actually currently under construction.

A ways to go.

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California Home Prices Have Risen 62.1 Percent Since 2012

According to a new report from Black Knight Financial Services, California’s home price index (HPI) rose in 2016 to 481,000, a 6.7 percent increase over 2015 but still 8.1 percent below the May 2006 peak.

As of November, 2016, San Jose was the nation’s most expensive major housing market, with an HPI of $904,000 which is actually 1.5 percent below its May 2016 mark.

Since the low point, San Jose home prices have increased 78.9 percent, the second highest rate of appreciation in the country. San Francisco’s HPI in November was $771,000, making it the second priciest U.S. real estate market behind San Jose.

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San Jose Real Estate Is Booming

Given the real estate markets in San Francisco and areas such as Palo Alto to the south it shouldn’t come as a great surprise that homes are selling in San Jose at a rapid rate – and a higher price. In fact, San Jose has been one of the fastest growing real estate markets in the United States over the last 10 years with the median price of a home at $860,000 during the third quarter of 2015 which represents an increase of nearly 48% compared the the same period in 2010.

Besides the proximity to San Francisco, the rapidly expanding technology sector in the city is drawing thousands of young professionals to San Jose. Both Adobe and Cisco Systems are based in San Jose while Apple is planning to expand to North San Jose on a 40 acre site and Samsung recently moved into a 1 million plus square foot facility with plans of employing up to 2000 workers.

This influx of wealth is reflected in a cultural boom with new art spaces and the requisite bars and restaurants that go along with it.

Analysts are now worrying about a lack of supply and affordability in the area.

Do you know the way to San Jose, indeed?

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Under 35? Do You Know the Way to San Jose?

Despite high rents and poor public transportation, San Jose has been named one of the best American cities for residents under the age of 35 by Vocative in their “livability index,” checking in at number 26.

In addition to taking in to account the usual factors such as housing costs and public transportation, the index also measures such features as walkability, the number of sunny days, and the percentage of violent crimes per 100,000.

While admitting that San Jose isn’t nearly as “cool” as San Francisco – which was rated number 3 – the report stated, “San Jose ain’t the coolest place around, but the Willow Glen and Santana Row neighborhoods offer walkability and cool shopping, respectively.” What more could you want?

For more, see vocative.com

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