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Market Report

San Jose Multifamily Investment Forecast

2020 Outlook

Transit Networks Increasingly Key for Development and Investment Strategies

 

Mountain View captivating builders, driving development to record high. Apartment construction will be abundant this year as 5,500 units are slated for delivery — the highest total this millennium. Northern sections of Sunnyvale will get much-needed supply amid sub-3 percent vacancy, while downtown San Jose will also witness significant development as builders focus on areas that align with public transit routes. Mountain View will post the strongest supply growth, adding more than 1,500 units, as developers seek to keep pace with the steady job creation of nearby tech firms. The influx of supply will outstrip the expected absorption of 3,700 apartments, putting short-term pressure on marketwide vacancy as it’s pushed to the low-4 percent range. Some areas such as East San Jose will retain limited apartment availability, keeping local rent growth among the strongest in the market. Over the past five years, the average effective rent in East San Jose has risen 29 percent, the most of any submarket within the metro.

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