produced by city of san josé department of housing housing ... 2018 report.pdf · q1 2010 q1 2011...

Produced by City of San José Department of HousingCity of San JoséHousing Market Update

First Quarter 2018

• 812 residential permits issued - 83 were for affordable housing

• Accessory Dwelling Unit permits climbed significantly since 2016

• Average rent growth was 4% Year-over-Year (YoY); vacancy ratewas 5% 1

• Average effective monthly rent for a 2-bedroom apartment was$2,626; Renters must earn $51/hour ($105,040/year) to afford thisrent 2

• Median single-family home price was $1,251,000, up 28% YoY;Residents must earn $122/hour ($253,500/year) to afford a home 3

• Condos/Townhomes sold twice as fast as single-family homes 4

1. Costar April 9, 2018.

2. Based on April 9, 2018 Costar average rents; income calculation assumes rents are 30% of income, 40-hour work week and a single income household.

3. Based on Santa Clara County Association of Realtors, March 2018 median prices; income calculation assumes monthly payments are 30% of income, 20% down, 4.4%interest rate, 1.25% property tax, 40-hour work week and a single income household.

4. Santa Clara County Association of Realtors, March 2018.

San José Housing Market Update : Q1 20182

Q1 2018 San José Housing Market


Q1 2018 San José Residential Permit Activity

SOURCE: City of San José Housing Department, March 2018

Q1 2018 Total Permits – 812

Quarterly RHNA Goal is 997 total units permitted

16474 70 83

4

565

438 599 696

256

1,009

694

37 31

17

122

107

61

41

24

35

0

200

400

600

800

1000

Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018

Uni

ts P

erm

itted

Multifamily Affordable Multifamily Market Single‐family/Second Units/Other 2014‐23 RHNA ‐ Quarterly Goal


2017 Second Unit Permits Up 140% YoY

Zoning code updated in December 2016 to conform with new State Legislation.

SOURCE: City of San José Monthly Permit Reports as of April 2018.

3

10 1013 14

2117

38

92

54

0

10

20

30

40

50

60

70

80

90

100

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018To‐Date

SOURCE: Costar April 9, 2018.

$1,858$2,126

$2,626

$3,257

$2,376


Average Rent Up 4% Quarter-over-Quarter (QoQ) & YoY

$800

$1,100

$1,400

$1,700

$2,000

$2,300

$2,600

$2,900

$3,200

$3,500

$3,800

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Ave

rage

Effe

ctiv

e M

arke

t Ren

ts fo

r SJ

Studio 1Bdrm 2 Bdrm 3 Bdrm Average

SOURCE: Costar, April 9, 2018, National Rate – US Census Bureau Current Population Survey/ Housing Vacancy Survey 4/26/18


Average Vacancy at 5%

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Qua

rterly

Vac

ancy

Rat

e %

for S

J

Studio 1 Bdrm 2 Bdrm 3 Bdrm Average 5% Healthy Vacancy Rate National Rate 4% 3%

Q1 2018 Vacancy RatesStudio – 5.3%1 Bdrm – 5.4%2 Bdrm – 4.9%3 Bdrm – 4.4%Average – 5%

SOURCE: Employment Development Department (EDD) – First Quarter 2017 Wages; Costar April 9, 2018. Average Rents; Income to rent calculation assumes rent at 30% of income and a single income household; Santa Clara County Association of Realtors Q1 2018 median prices; Income to mortgage calculations assume payments at 30% of income, 20% down, 4.44% interest, 1.25% Property Tax, $375 HOA dues for condos and a single-income household/


Housing is Out of Reach for Many San JoséWorkers

SOURCE: Zillow Rental Affordability Index Q4 2017– One Quarter Lag.


San José’s Renters Spend Higher % of Income on Rent

36%

29%

0%

10%

20%

30%

40%

50%

2000Q4

2001Q4

2002Q4

2003Q4

2004Q4

2005Q4

2006Q4

2007Q4

2008Q4

2009Q4

2010Q4

2011Q4

2012Q4

2013Q4

2014Q4

2015Q4

2016Q4

2017Q4

Med

ian

Ren

t as

a %

of M

edia

n In

com

e

San Jose Metro United States

SOURCE: Santa Clara County Association of Realtors, March 2018.

$1,454,500

$1,251,000


San José’s Single-Family Median Home Price Keeps Climbing - Up 10% QoQ and 28%YoY

$400,000

$510,000

$620,000

$730,000

$840,000

$950,000

$1,060,000

$1,170,000

$1,280,000

$1,390,000

Med

ian

Sin

gle

Fam

ily H

ome

Pric

e ($

)

San José Santa Clara County

SOURCE: Zillow Price to Income Index Q4 2017– One Quarter Lag


San José Metro Area Median Home Prices 10x Median Income - Nearly Triple the National Average

10

10.1

3.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2000Q4

2001Q4

2002Q4

2003Q4

2004Q4

2005Q4

2006Q4

2007Q4

2008Q4

2009Q4

2010Q4

2011Q4

2012Q4

2013Q4

2014Q4

2015Q4

2016Q4

2017Q4

Rat

io o

f Med

ian

Hom

e P

rice

to M

edia

n In

com

e


SOURCE: Zillow Mortgage Affordability Index Q4 2017– One Quarter Lag


San José’s Mortgage to Income Ratio is 2.9x National Average

11

46%

16%

0%

10%

20%

30%

40%

50%

60%

2000Q4

2001Q4

2002Q4

2003Q4

2004Q4

2005Q4

2006Q4

2007Q4

2008Q4

2009Q4

2010Q4

2011Q4

2012Q4

2013Q4

2014Q4

2015Q4

2016Q4

2017Q4

Mor

tgag

e P

aym

ents

as

a %

of M

edia

n In

com

e


SOURCE: National Association of Home Builders, Housing Opportunity Index Q1 2018


San Jose’s Housing Affordability Remains Low Relative to the Nation (8th least affordable)

12

1 in 6 families in San José can afford to own a median priced home

17

62

0

10

20

30

40

50

60

70

80

90

2000 Q1

2001 Q3

2004 Q3

2006 Q1

2007 Q3

2009 Q1

2010 Q3

2012 Q1

2013 Q3

2015 Q1

2016 Q3

2018 Q1

% o

f Hom

es A

fford

able

to F

amilie

s E

arni

ng M

edia

n In

com

e

San Jose, Sunnyvale, Santa Clara Metropolitan Area HOI National HOI

SOURCE: Santa Clara County Association of Realtors March 2018

$895,350

$765,000


San José’s Condo/Townhome Median Prices Up 11% QoQ and 20% YoY

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Med

ian

Tow

nnho

me

Pric

e ($

)

San José Santa Clara County

SOURCE: Santa Clara County Association of Realtors, March 2018


Single-Family Inventory Up 70% QoQ, Down 45% YoY; Sales Up 30% QoQ & 4% YoY

453259

595

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Mar‐05

Jul‐0

5Nov

‐05

Mar‐06

Jul‐0

6Nov

‐06

Mar‐07

Jul‐0

7Nov

‐07

Mar‐08

Jul‐0

8Nov

‐08

Mar‐09

Jul‐0

9Nov

‐09

Mar‐10

Jul‐1

0Nov

‐10

Mar‐11

Jul‐1

1Nov

‐11

Mar‐12

Jul‐1

2Nov

‐12

Mar‐13

Jul‐1

3Nov

‐13

Mar‐14

Jul‐1

4Nov

‐14

Mar‐15

Jul‐1

5Nov

‐15

Mar‐ 16

Jul‐1

6Nov

‐16

Mar‐17

Jul‐1

7Nov

‐17

Mar‐18

San

José

Sin

gle-

Fam

ily D

ata

New Listings Total Listings Sales

SOURCE: Santa Clara County Association of Realtors March 2018

9 Days


17 Days

Condos/Townhomes Selling Twice as Fast as Single-Family homes

0

20

40

60

80

100

120

140

Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

Day

s on

Mar

ket i

n Sa

n Jo

se

Single Family Condo/Townhomes

SOURCE: Federal Reserve, Freddie Mac Primary Mortgage Market Survey, Q1 2018

4.33%

1.51%

3.65%


Interest Rates Continue Upward March

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

Inte

rest

Rat

e

30 Year Fixed Rate 5/1 Hybrid Adjustable Rate Federal Funds Rate

Data Sources and Definitions• The City of San José selected Costar to supply rental housing statistics as of July 1,

2017. The City’s previous vendor, RealAnswers, went out of business in Q4 2016 • The City has restated rents and vacancy data beginning January 2000, using Costar. The

revised data will be posted in the Housing Market Updates beginning in Q2 2017• The source of the quarterly rents and vacancy data will be average, effective, market-

rate apartment rents for the geography encompassing the City of San José, as reported in Costar’s proprietary database

• Effective rent is the average rent paid over the term by a tenant adjusted downward for concessions paid for by the landlord (such as free rent, moving expenses, or other allowances), and upward for costs that are the responsibility of the tenant (such as operating expense pass throughs)

• The rents reported are average market rate rents charged by existing market-rate apartments; Costar updates rents data once a month for apartments with more than 30 units and once a quarter for apartments with less than 30 units

• For questions, please call the Housing Department at 408-535-3860

produced by city of san josé department of housing housing ... 2018 report.pdf · q1 2010 q1 2011...

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