Look at all the newly built residential units coming to downtown San Jose. If you haven’t been to downtown lately, then by the next time you happen to go through the city you will discover a lot of changes.
What is the fascination with downtown living? The conveniences! There are a bunch of new art galleries on South First Street transforming it into an artsy district. The repertory theatre attracts world-class playwrights and actors. The American Musical Theatre of San Jose offers ballet, opera, and concerts. The Pavilion offers an extremely competitive NHL hockey team, hosts a professional tennis tournament every year, and musical concerts that attract major international entertainers.
Another attraction to downtown living is the idea of leaving the car behind. With oil prices approaching $100 per barrel, gasoline price increases are surely to follow. Downtown restaurants are among the best in the area and the light rail is always available to take you to Japantown or many of the other stops as it continues to expand.
Adobe discovered the benefits of locating its headquarters in downtown San Jose and other major technology companies have followed. BEA recently purchased the Sobrato Tower on Almaden Blvd so we are expecting another 1500 employees bustling in the streets of downtown San Jose – eating and shopping, entertaining customers, and looking for housing.
So what does it all mean? The revival of a thriving downtown!
There are at least 4 high-rise condos in various stages of construction in the immediate downtown area, including what looks like the first and only luxury high rise – 360 Residences. These condos have features like a 24 hour doorman and a concierge service that helps residents make reservations for restaurants, theatres, or even oversees that your dry cleaning is picked up and delivered. These are benefits only seen in cities like New York and San Francisco. San Jose is growing up!
So what will happen to housing prices of existing homes in downtown? Well consider this – the builders of Tower 88, Axis, 360 Residences, and all the others have fixed building costs (steel, concrete, labor, etc) at today’s rates and that means they cannot offer their new units for sale below a certain price per square foot. That price is well above the price per square foot of existing homes in places like Paseo Plaza or The Brickyard for example. So, as the new homes are introduced and absorbed into the market the overall price per unit for most existing condos in downtown should also rise. Downtown jobs need to continue to grow of course, but the investments being made downtown are a good sign and the return of professionals looking to build their lives downtown are a great and welcome trend to see.