The Bay Area is one of the hottest markets for real estate in the nation. If you’re thinking about investing in San Jose Real Estate, you may have already started researching homes for sale in Palo Alto and homes for sale in Los Altos, but you may also be wondering how well your investment will hold its value—or, better yet, appreciate at a high rate. We think real estate in San Jose is a solid investment to make, due in large part to the rapidly expanding job market in the area, as well as the interest that large companies such as Apple and Google have taken in the San Jose area.
Here are some reasons why you can feel confident in the investment you’re about to make in San Jose property:
The job market in San Jose has increased 2.5% over the past year and is expected to grow nearly 39%
over the next ten years, which is 5% higher than the national average. As time goes on, we’ll likely see more and more people coming to San Jose to seek work. The area’s unemployment rate also tends to be lower than the nationwide average. As of October 2021, the unemployment rate in the San Jose-Sunnyvale-Santa Clara metro was 3.8%, compared to 4.6% nationwide. This 3.8% number also represents a drop from the high numbers seen at the onset of the COVID-19 pandemic.
Expanding tech market
As it currently stands, San Francisco and Silicon Valley combine to offer more tech jobs than any other metro in the country. San Francisco alone offers the fifth most tech jobs of any US metro, while Silicon Valley is ninth on the same list. The Bay Area is known for being a hub for big tech companies, with others looking to expand in that direction. Apple is working on a campus in North San Jose
, and Google’s plans to build in San Jose were approved last May
. As these mega-campuses come to town, they will create thousands of new jobs.
Perhaps you plan to rent your property instead of living in it yourself. Owning a rental property offers several tax advantages. Many of your expenses will be tax-deductible. Also, when you sell the property, any profit you make will be taxed as capital gains rather than income. Usually, you can expect capital gains to be taxed at a lower rate. There are many tax breaks
you may qualify for by owning a rental property.
Strong rental market
The owner-occupied housing unit rate in San Jose is 56.6%, almost 8% below the national average of 64.4%. Because of the high cost of living in the area and the fact that the median home value is over $900,000, many individuals and families cannot afford to purchase and opt to rent instead. This should continue to be the case as new jobs emerge in the San Jose area, and many new college grads come to the city looking for a job with one of these companies.
San Jose is more affordable than Silicon Valley
San Francisco has traditionally been one of the hottest markets in the nation. However, the migration to the South Bay has been steadily increasing recently, as living in San Francisco has become too expensive for many. Living in the San Jose area offers proximity to San Francisco at a more affordable price. That said, the growth of this area shouldn’t slow down anytime soon, as urbanization and the growth of big tech each continues.
High appreciation rates
One of the keys to making a smart real estate investment is ensuring that your property will increase in value over time. While you’ll certainly pay top dollar to purchase homes for sale in Palo Alto or homes for sale in Los Altos, you can expect a solid return on your investment. San Jose has a higher appreciation rate than 90% of cities and towns in the state of California and a higher appreciation rate than 99.44% of cities across the nation. All in all, houses have risen in value over 120% since 2000, with an average increase of 3.78% per year
. The opportunity for long-term growth in the value of your San Jose property is massive.
Although San Jose is the 10th-largest city in the United Space, only around 40% of its land area is currently developed. Residential buildings are going up in droves across the town, especially in urban areas. Currently, the majority of the area is suburban. As new homes and residences continue to come up in the area, there should be more opportunities to purchase investment properties while holding the expectation that these properties should see their value increase over time.
Ready to find homes for sale in San Jose?
As you can see, there is a ton of opportunity to see your wealth grow by investing in San Jose real estate. When you’re ready to take the next step toward buying a property, reach out to Gretchen Swall
. She is up to date on the best homes for sale in Palo Alto, as well as the best homes for sale in Los Altos. She can help you understand the appreciation numbers in the part of town where you are shopping and where those trends might be going in the future. Her knowledge and experience in the area will be a valuable asset to you from start to finish as you walk through the process of purchasing San Jose real estate. Contact Gretchen