3297 Pomerado Dr Quick Tour
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High Interest Rates Make New Home Construction Less Feasible
The city of San Jose just released a report titled "Residential Feasibility Analysis" that compares expected construction costs with the value of the construction. The report says the total estimated development costs have increased by approximately 12-13% over the last 18 months. Construction mortgage rates have doubled over the last 12 months and hover above 8.0%. The report analyzed the expected total construction costs of building multi-unit housing and compared it to the expected value of the completed project for housing built to be rented and housing built to be sold. For market-rate homes, the expected residual value per unit ranged from -$322,000 to -$614,000. The residual value is the expected sales price minus the total of the hard costs, soft costs, sales costs, and profit. With these strong negative residual values, a builder would not want to build.Looking at the San Jose real estate market shows that weak sales…
New Housing Developments Begin Including Granny Units
On January 29, 2021 Weingarten Realty Investors submitted an updated plan for San Jose's Cambrian Park Plaza which proposes having 30 houses to now include granny units on the ground floor. The granny unit would have its own entrance.The second and third floors would be an entirely separate single family dwelling from the granny unit below.One San Jose City Council member, Pam Foley, has voiced support for the addition of the granny units saying it is "one way to naturally add affordability into any project".With the new California wide regulations on Accessory Dwelling Units (ADUs, granny units, backyard cottages), this is likely to become commonplace for new Silicon Valley housing developments. It is a path to meeting demands placed on many Silicon Valley cities for both more housing and more affordable housing.
San Jose Rent Prices Increase Slightly - 1st Time Since March
The San Jose median rent price increased for the first time since March 2020. SF rent prices also increased for the first time since April 2020. They caution that increases are typical for this time of year so it may not indicate that effects from the pandemic are decreasing.City1 Bed Rent (m to m)(y to y)2 Bed Rent (m to m)(y to y)SF$2,680 (0.8% )(-23.9%)$3,500 (0.0%)(-23.1%)San Jose$2,130 (1.9%)(-12.7%)$2,660 (0.40%)(-10.1%)Sacramento$1,400 (-2.1%)(7.7%)$1,730 (0.0%)(15.3%)Sacramento median rent prices are up year-to-year suggesting many renters are relocating within California (possibly expecting to return to their former location).View San Jose house prices or San Jose condo prices.
Are Closed Campuses Affecting Home Prices?
With many college campuses either closed or partially closed, there are fewer renters near the campuses. Has the decrease in rental demand tipped demand for owning homes in those locations? Our MLS does not define a mostly residential neighborhood adjacent to San Jose State University, so it is not easy to look for any trends there. Looking at Zip Code 95112 and trying to compare it to San Jose citywide trends also does not show any obvious change in ownership desire.San Jose House prices per sq.ft. Zip Code 95112 House Prices per sq.ft.Stanford University is adjacent to the Palo Alto College Terrace Neighborhood. Many of the Stanford students and even visiting professors rent a place to stay, near the campus.Palo Alto College Terrace House Prices per sq.ft. Palo Alto College Terrace Condo Prices per sq.ft.The typical volatility in the average prices could be masking a slight change but it does…
Real Estate Commission
Real estate agents have been creating new real estate commission plans. JLee Realty has recently implemented a 0% real estate listing commission plan. Their expressed goal is to attract as many buyer agents to their listings as possible.If their own buyer agent submits a successful offer, they reduce their listing commission to zero percent. JLee Realty will not receive any more commission if their seller accepts an offer from JLee Realty than if a purchase offer is accepted from any other brokerage.Furthermore JLee Realty is not offering any enticements for a buyer to drop their own buyer agent and use a buyer agent from JLee Realty when they make an offer.
San Jose Real Estate Trends
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