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Multifamily Rents in San Jose, California, Keep Growing in 2024

Multifamily Rents in San Jose, California, Keep Growing in 2024

For apartment landlords in San Jose, California, the solid start to the year continued in February, with average rents increasing 0.8% over January's average. That’s the second month in a row that the city's rents have grown by that amount, which equates to an annual growth rate of almost 10%.

While it remains too soon to know whether apartment rents will climb at this rate throughout the remainder of 2024, landlords hope the growth trend can be maintained. Coming after a rather difficult 2023, when rents were essentially flat over the year, an uptick in renter demand should help owners recoup some of the increased expenses in areas such as insurance and utility costs that they have had to bear over the past 12 months.

New apartment developments completed during the past year in Silicon Valley have generally performed well, with no shortage of renters eager to upgrade to premium buildings packed with modern amenities.

For instance, The Tillery in Mountain View is fully stabilized after opening in early 2023. Average rents at the four-star, 226-unit complex are around $4,700 a month. Over by Santana Row, the Hannover Winchester is a five-star community of 366 apartments that began renting in the summer of 2023. The project is currently around 55% leased, with average monthly rents of $4,300.

Several developments currently under construction should join these communities throughout the year. For example, the 286-unit Sofia at Lawrence Station in Santa Clara is nearing completion and is already leasing units at an average of $3,650 per month, offering up to six weeks of free rent.

While the completion of nearly 2,400 new units in 2024 will bring a good amount of new competitive supply to the market, elevated mortgage rates should keep rental demand high in the year ahead, allowing owners to raise rents a little further.



Source: https://product.costar.com/home/news/1499887388