City of San José Produced by City San José Department of Housing Housing Market Update Q 2 2 0 1 5
Q2 2015 San José Housing Market Rents continue to set records, grow 11% annually Renters must earn around $52/hour ($109,440/year) to afford the average rent for a two bedroom apartment 1 No-cause evictions filed with City continue to rise Median single-family home prices continue to set record highs, up 9% year over year (YoY); townhome prices increase even more, up 20% YoY Only 1 in 5 families can afford to purchase a median priced home in the San José, Sunnyvale, Santa Clara Metropolitan Service Area (MSA), compared to 3 of 5 families, nationally 2 1 Based on Realfacts average rents, income calculation assumes rents are 30% of income, 40 hour work week,and a single income household 2 National Association of Home Builders Housing Opportunity Index, Q2 2015 2
Q2 2015 Multi-Family Residential Permit Activity Trends Low - 166 (all Market-Rate) Permits Pulled vs 1,287 Permits in Q2 2014 4,500 Number of Multifamily Residential Permits 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500-2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 To-Date Multifamily Market Rate Multifamily Affordable SOURCE: City of San José Housing Department, Q2 2015 3
Average Rent Continues to Rise, Up 8% Quarterly and 11% YoY $3,173 $2,736 $2,407 $2,186 $1,749 SOURCE: RealFacts Q2 2015 - Data only includes rental projects with 50 apartments or more 4
SJ Vacancy Rate rises from 3.3% in Q1 to 4.7% in Q2 2015, Just Below the Natural Rate 5 % 4.7% 4.3% SOURCE: RealFacts Data Q2, 2015 Data only includes rental projects with 50 apartments or more 5
Rents in Some Areas Trend Higher than Average Citywide Rents Project 1BR 2BR Average Citywide Rents (Q2 2015 Realfacts) Riverview (North SJ) Sycamores at North Park (North SJ) One South Market (Downtown SJ) 101 San Fernando (Downtown SJ) Ascent Apartments (Edenvale SJ) $2,186 $2,736 $2,645 - $3,185 $3,335 - $3,685 $2,650 - $3,215 $3,130 - $3,520 $2,616 - $3,316 $3,342 - $8,858 $2,348 - $2,894 $3,393 - $3,893 $2,136 - $2,526 $2,809 - $3,382 SOURCE: Zillow, Aug 11, 2015 6
Market Rents Significantly Out of Reach for Many San José Workers SOURCE: Employment Development Department (EDD) May 2015 Wages; Income to rent calculation assumes rent at 30% of income and a single income household 7
No Cause Evictions Filed with the City Continue to Climb 180 160 154 Evictions 140 120 100 80 60 40 20 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 Evictions Source: City of San José Housing Department Does not include all evictions in San Jose, only evictions filed with the City on rent controlled buildings. 8
San José Housing Affordability Remains Low Relative to the Nation (5 th least affordable) Only 1/5 th of San José s Families Can Afford a Median Priced Home % of Homes Affordable to Families Earning Median Income 90 80 70 60 50 40 30 20 10 0 Q2 2015 63% Q2 2015 19% Q3 14 Q3 13 Q3 12 Q3 11 Q3 10 Q3 09 Q3 08 Q3 07 Q3 06 Q3 05 Q3 04 Q1 02 Q1 01 Q1 00 Q1 99 Q1 98 Q1 97 Q1 96 Q1 95 Q1 94 Q1 93 Q1 92 San Jose, Sunnyvale, Santa Clara Metropolitan Area HOI National HOI SOURCE: National Association of Home Builders, Housing Opportunity Index Q2 2015 9
Mortgage Rates Record Slight Increase from Q1 2015 3.98% 2.54 % 0.13% SOURCE: Federal Reserve, Freddie Mac Primary Mortgage Market Survey, June 2015 10
Single-Family Median Home Prices Continue to Climb after Reaching Record Levels, Up 10% (SCC) & 9% (SJ)YoY $1,000,000 $997,000 $900,000 $865,000 Median Single Family Home Price ($) $800,000 $700,000 $600,000 $500,000 $400,000 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Santa Clara County San José SOURCE: Santa Clara County Association of Realtors, June 2015 11
Townhome/Condo Median Price at Record High, Up 22% (SCC) and 20% (SJ) YoY $675,000 $642,000 Median Towhome Price ($) $575,000 $475,000 $375,000 $275,000 $550,000 $175,000 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Santa Clara County San José SOURCE: Santa Clara County Association of Realtors, June 2015 12
Inventory remains low 4,000 3,500 3,000 San José Data 2,500 2,000 1,500 1,000 500 715 700 613 0 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 New Listings Sales Total Listings Jun-14 Jun-15 SOURCE: Santa Clara County Association of Realtors, MLS Listings June 2015 13
Hot Market - DOM at Lowest Level since Mid 2005, SF down by 4 days and Condo down by 9 days from Q1 2015 140 120 Days on the Market in San Jose 100 80 60 40 20 19 Days 0 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Single Family Condo/Townhomes 14 Days SOURCE: Santa Clara County Association of Realtors June 2015 14
Foreclosure Filings Stay Low, at Pre-Recession Levels 1,400 1,200 1,000 800 600 400 200 0 82 34 3 Sep-06 Dec-06 Mar-07 Jun-07 Number of Filings in San José Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Notice of Defaults Auctions Bank-owned SOURCE: San José PropertyRadar.com June 2015 15