San Jose Multifamily Market
Local Vacancy Falling Faster than Other
Bay Area Metros, Rents to Fully Recover
First quarter caps strongest yearlong absorption on record. San Jose's rental market has bounced back in a big way, with more than 9,300 units of net absorption logged from April 2021 though March 2022. The next highest 12-month total during the two decades leading up to the health crisis was about 3,000 units below that measure. Surging demand allowed San Jose's vacancy contraction to beat Oakland and San Francisco by 100-plus basis points year-over-year in March. This should allow operators to push up rents in the near term, as availability reaches the sub-3 percent threshold for the first time since mid-2011. The average effective rent was about 5 percent shy of the pre-pandemic peak entering April, but projected gains over the coming quarters will produce a new year-end high.