I recently came across a report which stated that San Jose has surpassed San Francisco in population and is now the third largest city in California. Surprisingly, San Jose was also featured in news for its increasing house rents. So I wanted to understand the San Jose housing market in detail.
I poured over the data from the US Census, San Jose Department of Finance and San Jose Housing and Planning department. Some of my observations are:
1. Annual Rent growth was strong from 2010. The rent increased by ~10% annually.
2. As per demographic profile, North San Jose has a high percentage of high income earners (annual household income >$100,000) and many new units which came up in the area commanded historic high rents.
3. Increase in population has resulted in the demand - supply gap widening and hence the rents have seen historic increase.
4. The number of permits for residential units have increased considerably (notably since 2012) and the demand - supply gap is expected to narrow in 2014 as a lot of new housing units are expected to come up.
5. The days-to-market for the houses still remains healthy and units becoming vacant are getting re-occupied before the first tenant vacates and hence suggests that rents will not soften down in near future.
I wish to deepen the analysis by looking at more trends like the number of jobs generated in San Jose, the unemployment rate trend, average household income trend and annual crime rates compared to other cities in the Bay area.
Though, I have not represented everything in the following graphic, it is a first step to represent my analysis pictorially.
Note: The data for 2014, represents only first quarter figures. And hence we should not conclude that the increase in housing units has tapered down in 2014.
I poured over the data from the US Census, San Jose Department of Finance and San Jose Housing and Planning department. Some of my observations are:
1. Annual Rent growth was strong from 2010. The rent increased by ~10% annually.
2. As per demographic profile, North San Jose has a high percentage of high income earners (annual household income >$100,000) and many new units which came up in the area commanded historic high rents.
3. Increase in population has resulted in the demand - supply gap widening and hence the rents have seen historic increase.
4. The number of permits for residential units have increased considerably (notably since 2012) and the demand - supply gap is expected to narrow in 2014 as a lot of new housing units are expected to come up.
5. The days-to-market for the houses still remains healthy and units becoming vacant are getting re-occupied before the first tenant vacates and hence suggests that rents will not soften down in near future.
I wish to deepen the analysis by looking at more trends like the number of jobs generated in San Jose, the unemployment rate trend, average household income trend and annual crime rates compared to other cities in the Bay area.
Though, I have not represented everything in the following graphic, it is a first step to represent my analysis pictorially.
Note: The data for 2014, represents only first quarter figures. And hence we should not conclude that the increase in housing units has tapered down in 2014.
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