Downtown West Project, a multi-billion dollar scheme by the tech giant to expand into one of California’s top cities.
It’s been a long time coming for this expansion plan which dates back to 2019. Two years on, the Google Downtown West Campus will now be the largest development project in the history of San Jose. And according to Dev Davis, a member of San Jose’s City Council, this program will be “one of the most significant and transformative large-scale, transit-oriented developments happening in the world.”
In terms of space, the Downtown San Jose Project will take all of 80 acres near Diridon Station and feature up to 7.3 million square feet of office space, 4,000 housing units, 15 acres of parks, and a 30,000-50,000-square-foot community center. Generally speaking, this is a major win for the San Jose real estate market.
San Jose housing market: A place everyone wants to live
All American cities are unique in their own way and offer something to residents on either a personal or an economic level. However, the best cities have a common theme. They offer residents the best of both worlds: a place that is great for both work and living.
According to Ahmad Thomas, the CEO of the Silicon Valley Leadership Group:
“Downtown West is an extraordinary plan for somewhere people do want to be. It’s an open, inclusive vision for an urban San Jose that people will want to come to — for work and for play — and to proudly call their home. It builds on all the elements and diverse cultures that make our home great, and it gives it an even bigger canvas — one with more room for arts, nightlife, and recreation.”
From a real estate investing perspective, this is one of the looming San Jose real estate trends that investors can take advantage of. This is because of the attraction effect that Google’s Downtown West Mixed-Use Plan will have on the city generally. And while the average home price in San Jose, CA at $1,067,460 (estimated by Mashvisor) is higher than the national average, more people will yet want to migrate into the city because of the job opportunities that will come with the project. With this in mind, 2021 might be the best time to invest in the San Jose real estate market.
Read More: 20 Best US Cities for Investing in Long Term Rentals: Where Renters Are Moving
San Jose real estate: A place everyone wants to visit
As of 2017, San Jose, located in Santa Clara County, had the strongest growth in international visitors among the top 40 American cities attracting overseas visitors. And in 2019, San Jose welcomed about 6.3 million overnight visitors who spent $1.03 billion while in the city.
Unlike many cities, San Jose receives visitors for multiple reasons ranging from visiting area attractions to vacationing, taking business trips, or just trying out restaurants. Some large corporate events welcome over 5,000 attendees from different places on the globe.
With the emergence of the Google Downtown West Project, the hospitality industry in San Jose is expected to see even stronger growth in visitors from both outside and inside the country. For instance, 500,000 square feet of space will be dedicated to retail, cultural, arts, hotel, and education purposes.
So, while many real estate investors will be prepping to invest in traditional rentals, short-term rentals will also play a major role in the further growth of the residential market, according to recent San Jose real estate forecast.
Read More: 21 Airbnb Tips for Hosts: The Ultimate Guide in 2021
Where to invest in the San Jose real estate market
Mashvisor’s Heatmap: Airbnb Rental Income by Neighborhood in the San Jose Real Estate Market
It is one thing to be aware of the immense potential that the Google Downtown West Project brings to the San Jose real estate market and, generally, the California real estate market. It is another thing to know how to position yourself to reap the benefits as a real estate investor. But it gets easier with the right real estate investment tools.
One of the benefits of these tools is that they provide you with real-time data on which to base your real estate investment decisions such as how to identify the best houses for sale in San Jose, CA. According to Mashvisor, a real estate data analytics company, here are some of the best areas to buy properties in the San Jose real estate market in 2021:
Best neighborhoods in San Jose, California for traditional rentals
In reality, not everyone wants to live within the Google Campus as they may want to experience more traditional San Jose housing or communities. Knowing this, here are some of the best locations to invest in nice houses when it comes to long-term rental properties.
North San Jose
- Median Property Price: $889,721
- Price per Square Foot: $679
- Traditional Rental Income: $3,130
- Traditional Cash on Cash Return: 3.19%
- Price to Rent Ratio: 23
Alviso
- Median Property Price: $835,000
- Price per Square Foot: $957
- Traditional Rental Income: $3,800
- Traditional Cash on Cash Return: 3.05%
- Price to Rent Ratio: 18
Fairgrounds
- Median Property Price: $669,105
- Price per Square Foot: $556
- Traditional Rental Income: $2,822
- Traditional Cash on Cash Return: 3.02%
- Price to Rent Ratio: 19
Alum Rock-East Foothills
- Median Property Price: $949,533
- Price per Square Foot: $574
- Traditional Rental Income: $3,051
- Traditional Cash on Cash Return: 2.20%
- Price to Rent Ratio: 25
East San Jose
- Median Property Price: $955,618
- Price per Square Foot: $639
- Traditional Rental Income: $3,312
- Traditional Cash on Cash Return: 2.02%
- Price to Rent Ratio: 24
Best San Jose, California neighborhoods for Airbnb rentals
As mentioned earlier, the Downtown West Project, unanimously recommended from the San Jose Planning Commission, is expected to contribute to the San Jose travel industry and further strengthen the city as one of the best places to invest in California. If short-term rentals like Airbnb are your kind of investment, here are some of the best neighborhoods to consider in the San Jose real estate arena:
Alviso
- Median Property Price: $835,000
- Price per Square Foot: $957
- Airbnb Rental Income: $4,084
- Airbnb Cash on Cash Return: 2.30%
- Airbnb Daily Rate: $174
- Airbnb Occupancy Rate: 61%
Alum Rock-East Foothills
- Median Property Price: $949,533
- Price per Square Foot: $574
- Airbnb Rental Income: $3,506
- Airbnb Cash on Cash Return: 1.28%
- Airbnb Daily Rate: $142
- Airbnb Occupancy Rate: 66%
Blossom Valley
- Median Property Price: $891,664
- Price per Square Foot: $674
- Airbnb Rental Income: $3,361
- Airbnb Cash on Cash Return: 1.22%
- Airbnb Daily Rate: $139
- Airbnb Occupancy Rate: 71%
North Valley
- Median Property Price: $978,562
- Price per Square Foot: $670
- Airbnb Rental Income: $4,042
- Airbnb Cash on Cash Return: 1.21%
- Airbnb Daily Rate: $257
- Airbnb Occupancy Rate: 57%
Evergreen
- Median Property Price: $717,555
- Price per Square Foot: $464
- Airbnb Rental Income: $3,883
- Airbnb Cash on Cash Return: 1.12%
- Airbnb Daily Rate: $179
- Airbnb Occupancy Rate: 70%
When will the Downtown West Project commence?
According to Google, the actual construction of buildings in the San Jose real estate market should begin as early as 2023, with the project expected to last ten years and be completed in phases. Investors looking to take advantage of the opportunity to invest in profitable traditional and Airbnb rentals in the San Jose housing market can use real estate investing tools like Mashvisor. which provides all the relevant data, including rental income, rental expenses, occupancy rate, cash flow, cash on cash return, and cap rate.
To start looking for and analyzing the best investment properties in San Jose, CA, click here.