San Jose, CA Multifamily Market Report Q3 2026

Demand Outpaces New Supply 6.2x; Rent Growth Reaches 8.5%

Demand

San Jose absorbed 38 units in Q3 2026, against 344 in the same quarter last year. Vacancy is 2.6%, 92 bps tighter than Q3 2025. Sunnyvale/Cupertino is the tightest submarket at 2.1% vacancy; Santa Clara leads rent growth at +11.5%. Trailing-12-month absorption of 1,973 units is down from 6,899 a year earlier.

Supply

San Jose recorded 0 units of completions in Q3 and 318 over the trailing twelve months (-93% versus the prior TTM period). Units under construction equal 2.0% of inventory, concentrated in West San Jose/Campbell at 3.1% of its stock. Annual completions peaked at 4,216 units in 2020. The 3,715-unit pipeline equals about seven and a half quarters of absorption at the trailing pace.

Investment Market

San Jose recorded $7.1B in sales over the trailing twelve months, +140% against the prior TTM period; Q3 accounted for $4.80B. The high-water mark in this series is $5.9B in 2026. Q3 volume is 5.7 times the prior four-quarter average and likely reflects entity-level activity from the AvalonBay and Equity Residential merger, which also sets the 2026 high. Read volume as directional. CoStar records $2.28B for Q3; on that count trailing volume would be $4.6B.

San Jose cap rates average 4.99%, up for 20 straight quarters. Pricing sits at $421k per unit, higher for 2 consecutive years.