San Jose is the center of Silicon Valley, headquarters to major tech companies and the most populous city in Northern California. This metropolitan area is home to the young and wealthy, but has its appeal started waning?

Since the early 1900’s, San Jose has always been a center for innovation and invention. In the 1940’s, the economy shifted from one of mostly agriculture to industrial manufacturing. IBM selected San Jose as its first office on the west coast in 1943 and the first hard disk drive was invented in those offices, leading to the technological boom that has existed in San Jose and the surrounding areas ever since. San Jose is now home to dozens of tech companies, including eBay, PayPal, Adobe, Zoom, Samsung and more.

With the increase in technological notoriety, it isn’t surprising that as jobs have moved into the area, so have people. San Jose is now the third largest city in California and the 10th largest city in the country. Overall, since 1970, the area has seen more than 85% growth, though those rates are slowing and even declining in some areas due to high costs of living and a rise in remote working. The map below shows the growth rates for the last 2 years.

Affordable housing is a major issue in San Jose, as tech companies pay more and more, housing prices have risen sharply. While median rent is about three times the national average, the median home value is well over $1.1M, nearly ten times that of the national average. When you calculate Median Housing Value and divide by Median Income, San Jose is #2 on the list, just behind Vineyard Haven MA (Martha’s Vineyard). The median house is 9.8 times median income, making it nearly impossible for someone making even average income to buy a home. The map below shows that simple housing affordability ratio, dividing median home value by median income.

Demographically speaking, San Jose is a young, diverse community with a median age well below average and nearly twice the national average in diversity visibility. They are highly educated, with 25% of the population holding a graduate or professional degree. Families are prevalent with an average household size of 2.9.

With companies moving out of California, and families leaving the state due to work from home flexibility, will San Jose continue to see declines, and will home values stay at record highs?