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Here is why property prices are going to climb in 2025 in San Jose

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Our industry specialist has reviewed and approved the final article. Also, some of the data presented here have been integrated into the San Jose real estate spreadsheet template.

Thinking of buying in San Jose? Get our financial spreadsheet tailored to this specific market.

Expecting a dip in San Jose property prices in 2025? Think again.

Despite economic shifts, the San Jose market is poised for growth, driven by high demand and limited housing availability.

Let’s explore why property prices in this tech hub are set to rise in 2025.

We rely on solid, up-to-date data and statistics from multiple credible sources, ensuring our analysis is grounded in reality.

By thoroughly examining this information, we draw our own conclusions, which we share at the end of this blog post. Enjoy the read!

How this content was produced 🔎📝

At What's My Cash Flow, we study the San Jose real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers throughout the place. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These price forecasts and data are also based on what we’ve learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources, like US Census, Zillow, and Redfin (among many others).

We prioritize accuracy and authority. Observations lacking solid data or expert validation were excluded. For the "observations" and "forecasts" meeting our standards, we go and look for more insights from real estate blogs, industry reports, and expert analyses, alongside our own knowledge and experience. We believe it makes them more credible and solid.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make forecasts accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

If you think we could have done anything better, please let us know. You can always send a message. We answer in less than 24 hours.

This article offers thoughtful insights and analysis based on reliable sources, but it should not be considered financial advice. We work hard to research, compile, and analyze data to give you a well-informed perspective. However, as you can guess, our analysis involves subjective choices, such as source selection and methods, and it cannot fully capture the market's complexity. Please, always do your own research, consult professionals, and make decisions based on your own judgment. Any financial risks or losses are your responsibility. Additionally, you should know that we have no affiliation with the sources mentioned, ensuring our analysis is completely impartial.

1) In San Jose, there are only about 0.34 homes for each person, which is quite limited

Signal strength: strong

In San Jose, there is approximately 0.34 home per inhabitant, which indicates a limited housing supply.

This low ratio suggests that the demand for housing exceeds the supply, a common factor that drives up prices. San Jose is known for its thriving tech industry, attracting professionals who need housing.

With more people moving in for job opportunities, the pressure on the housing market increases, leading to higher prices. Locals understand that the scarcity of available homes is a persistent issue in the area.

If the ratio were to increase to 0.5 home per inhabitant, it might indicate a more balanced market, potentially stabilizing prices.

Source: USCensus

2) Redfin considers the San Jose real estate market to be "very competitive."

Signal strength: strong

The fact that Redfin ranks the San Jose real estate market as "very competitive" is a strong indicator that housing prices are likely to rise in 2025. When a market is labeled as "very competitive," it typically means that there is a high demand for homes, which often leads to increased prices as buyers compete for limited inventory.

In San Jose, the most competitive properties are single-family homes in the suburban areas. These homes are particularly sought after because they offer more space and privacy, which is highly valued by families and individuals looking to settle in a tech-driven city like San Jose.

Additionally, the proximity to major tech companies makes these suburban single-family homes even more attractive, as they provide a balance between work and lifestyle. This demand for suburban single-family homes in San Jose is a key factor driving the market's competitiveness and potential price increases.

If the market were to become "less competitive," with more inventory available than buyers, it could signal a potential stabilization or decrease in housing prices.

Source: Redfin

housing prices San Jose

We created this infographic to show how property prices in San Jose compare to other big cities in California. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.

3) In San Jose, about 67% of homes sell for more than their listing price

Signal strength: strong

In San Jose, around 67% of sales close at a price higher than the listing price, which is a strong indicator of demand. When buyers are willing to pay more than the asking price, it often means that competition among buyers is fierce and they are eager to secure a property.

This kind of market behavior typically suggests that housing prices are likely to rise because demand is outpacing supply. As more buyers compete for fewer homes, prices tend to increase to balance the market.

For someone considering investing in real estate, this trend can be a signal that property values might appreciate in the near future. However, if the percentage of sales closing above the listing price were to drop significantly, say below 30%, it might indicate a cooling market where prices could stabilize or even decrease.

Source: Zillow

4) San Jose home values have already risen by 7.5% since last year, and this trend may persist

Signal strength: strong

The fact that home values in San Jose have already changed by 7.5% since last year is a strong indicator that the housing market is on an upward trend. This increase suggests that demand is likely outpacing supply, which often leads to higher prices.

Currently, the median home price in San Jose is around $1,423,994, which is quite significant. Additionally, the median sales price per square foot is about $889, reflecting the high value of real estate in the area.

These figures indicate that San Jose is a desirable location, and as demand continues to grow, prices are likely to rise further. If you're considering investing, these trends suggest that the market could continue to appreciate in the coming years.

However, if the market were to see a significant increase in housing supply, it could potentially stabilize or even decrease prices, countering the current upward trend.

Source: Redfin

supply and demand real estate San Jose

Our team designed this infographic to show how competitive the real estate market in San Jose is vs. other major cities in California. It shows the percentage of sales above the list price, a key indicator of market competition.

5) Three major websites confidently predict that home prices in San Jose will rise in 2025

Signal strength: strong

There are three major websites forecasting a positive growth for home prices in San Jose in 2025, which is a promising signal for potential investors.

Among these forecasts, Redfin is the most optimistic with a projected increase of 4%, closely followed by Realtor, also predicting a 4% rise. Meanwhile, Zillow anticipates a more modest growth of 2.60%, indicating a significant gap between the most and least positive forecasts.

While these predictions are encouraging, it's important to remember that forecasts should be approached with caution as they are based on assumptions and models that may not fully capture future market dynamics. Therefore, we will also rely on strong, reliable, and current data to make a well-informed investment decision.

If these forecasts were to predict a negative growth or a decline in home prices, it would suggest a different outlook for the San Jose housing market.

Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts

6) San Jose's "vacancy rate" is just 4.5%, showing it's a bustling and competitive market

Signal strength: moderate

The vacancy rate in San Jose is currently at 4.5%, which is considered very low. This low vacancy rate suggests that the housing market is highly occupied and competitive, meaning there is strong demand for housing in the area.

When demand is high and supply is limited, it often leads to increased housing prices as more people compete for fewer available homes. In such a market, properties that are easily rented are typically modern, well-maintained apartments located in desirable areas like downtown San Jose.

These types of properties attract tenants quickly, further reducing the vacancy rate and putting upward pressure on rental and housing prices. Investors looking to enter this market should consider these factors as indicators of potential price increases.

If the vacancy rate were to rise to around 7% or higher, it might suggest a shift towards a less competitive market, potentially stabilizing or even decreasing housing prices.

Sources: NeighborhoodScout, DataUSA, USCensus

real estate values change San Jose

This infographic we have made will show you how market values have changed during the last decade in San Jose vs other major places in California. Here, the percentage increase or decrease in market value will help you see long-term trends.

7) San Jose has a "Livability" score of 79, indicating it's a pleasant place to live

Signal strength: moderate

The livability score of 79 in San Jose is considered good because it reflects a high quality of life, which is a key factor in attracting new residents and investors.

One reason for this high score is the strong job market in the area, driven by the presence of major tech companies like Google and Apple. Additionally, San Jose offers excellent educational institutions, including top-rated schools and universities, which appeal to families and young professionals.

Moreover, the city boasts a pleasant climate with mild winters and warm summers, making it an attractive place to live year-round. These factors contribute to the assumption that housing demand will increase in 2025, potentially driving up prices.

If the livability score were to drop below 70, it might indicate declining conditions, which could deter potential buyers and investors.

Source: AreaVibes

8) San Jose boasts a strong employment rate of 65.3%, indicating robust job availability

Signal strength: minimal

The employment rate in San Jose is at 65.3%, which is considered high compared to the national average in the United States.

This high employment rate suggests that more people have stable incomes, which can lead to increased demand for housing. When people have jobs, they are more likely to buy homes, and this demand can drive up housing prices in 2025 in San Jose.

San Jose's economy is supported by three major employment sectors: technology, healthcare, and education. Companies like Apple and Google employ a significant number of people in the area, contributing to the high employment rate.

If the employment rate were to drop below 60%, it might indicate a weakening economy, which could lead to a decrease in housing demand and prices.

Sources: USCensus, DataUSA

livability real estate map San Jose

This infographic designed by our team breaks down the latest livability score in San Jose but also in other big cities in California. It provides a clear view of which locations offer the best overall living conditions, which is a good thing to know if you want to buy real estate.

9) In San Jose, home prices have risen by an average of 7.4% annually over the past decade

Signal strength: minimal

The fact that home prices in San Jose have appreciated at an average rate of 7.4% over the last decade is a strong signal for potential investors. This consistent growth indicates a history of demand and price growth, suggesting that the market has been favorable for homeowners and investors alike.

While this positive 10-year average appreciation is encouraging, it's important to remember that past performance doesn’t guarantee future results. However, such a track record can still be a good indicator of potential future increases in housing prices.

Investors should consider this historical data as part of their decision-making process, as it reflects favorable conditions for future price growth. Yet, if the market were to show a significant decline in demand or economic downturn, this signal might suggest otherwise.

Source: NeighborhoodScout

So, are prices going to climb in San Jose in 2025? Yes, they are!

San Jose's housing market is poised for price increases in 2025 due to several compelling factors.

Firstly, the city has a limited housing supply, with only 0.34 homes per person, indicating that demand far exceeds supply. This scarcity is exacerbated by the city's thriving tech industry, which attracts professionals seeking housing. As more people move in for job opportunities, the pressure on the housing market intensifies, leading to higher prices.

Additionally, the market is labeled as "very competitive" by Redfin, with 67% of homes selling above their listing price. This fierce competition among buyers is a clear sign of rising demand. Furthermore, home values have already increased by 7.5% since last year, and major forecasts predict further growth in 2025, with Redfin and Realtor projecting a 4% increase.

San Jose's low vacancy rate of 4.5% and a strong employment rate of 65.3% further support the likelihood of price hikes. The city's high livability score of 79 and a decade-long average home price appreciation of 7.4% annually also contribute to its attractiveness. All these factors combined suggest that San Jose's housing market will continue to see price increases in 2025.

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