In the past, it was said that if you waited a bit in Silicon Valley, prices would definitely go up. Now, the situation is a bit different. According to Zillow's ZHVI, the average home value in San Jose is $1,462,209, which is a 0.7 percent increase compared to a year ago as of June 30, 2026. While it's not the double-digit growth we used to see, it still shows a gradual upward trend.

The speed of transactions gives a better reading of the market temperature. Recently, the average transaction period has increased to 18 days, slightly longer than the 15 days from a year ago. In April alone, 986 homes were sold, a 28.05 percent increase from the previous year, with the average sale price at 104.78 percent of the asking price. This indicates that competition among buyers is still alive.

Those who have observed San Jose for a long time know how closely this city's employment is tied to the tech industry. Although the pace of demand growth has definitely slowed compared to before due to layoffs and restructuring related to AI, it has not completely stalled. The pattern of transactions peaking around stock option and bonus seasons remains.

Looking at the rental market, San Jose is still one of the most expensive places in the U.S. According to RentCafe, the average rent as of August 1, 2026, is $3,246, up 3.46 percent from $3,138 a year ago. A one-bedroom unit averages around $2,960. Given the high purchase prices, cap rates often appear low, making a long-term holding strategy focused on capital appreciation a realistic choice.

Areas preferred by Korean families include Cupertino and nearby neighborhoods like Ivandale. However, there are significant disparities in school districts even within San Jose, so it's advisable to check the assigned schools for your desired address along with GreatSchools ratings before making a purchase.

Inventory remains tight. As of April, the inventory was only 0.82 months, which is favorable for sellers. However, there are signs of slightly increasing listings compared to before, which could provide more options for waiting buyers.

If you are a heavily leveraged investor, you should calculate how much your monthly payments will increase in the current interest rate environment of around 6.6 percent. Relying on stock option income to fully utilize your loan limit can be risky during times of ongoing layoffs.

In terms of cap rates, San Jose tends to show lower rates compared to other cities in Southern California, so an approach focused on capital appreciation rather than pure rental income seems more realistic. However, if vacancy periods extend, the calculations for returns can become unstable, so it's safer to be conservative.

Applying the 1 percent rule, there are not many properties in San Jose that meet this criterion. Due to the high purchase prices, cash-on-cash returns are often low, leading many investors to focus more on asset value appreciation than on pure cash flow.

In the past, it was common to say that a 20 percent down payment was sufficient, but in today's market, where purchase prices are high, even 20 percent becomes a significant amount. Lowering the down payment ratio reduces initial burdens, but monthly payments and mortgage insurance premiums will increase, so it's wise to compare the total costs of both methods.

When viewing properties, it's also good to check the age of the building. Older homes typically require more maintenance costs, so budgeting adequately can help reduce the gap between actual returns and budget.

If you are coming from another state, you need to factor in California's property tax reassessment methods and high cost of living. Budgeting based on your previous residence's income relative to housing costs may lead to shortfalls.

In markets that have been observed for a long time, it's important to avoid hasty judgments. The current San Jose is neither a place to jump into recklessly nor completely ignore; it seems advantageous to first determine your budget, school district, and holding period before making moves. This article is not investment or legal advice, and it is recommended to consult with a professional before finalizing any contracts.