The Silicon Valley housing market has entered a strange new chapter. Home prices remain near record highs, yet construction is practically grinding to a halt. What happens when one of America’s most expensive cities stops building? Turns out, the consequences ripple through every corner of the real estate landscape.
The story unfolding in San Jose right now is honestly more dramatic than most outsiders realize. For renters wondering when relief might arrive and buyers hoping inventory will expand, the numbers coming out of Santa Clara County paint a challenging picture.
The Stunning Drop Nobody Saw Coming
Multifamily housing permits in the San Jose metro area have declined by 41% this year, dropping from 1,729 permits issued between January and July 2024 to just 1,013 during the same period in 2025. This represents the largest decline among major California metros.
The scale of this collapse becomes even clearer when you zoom out. The region’s overall building permits plunged 68% when comparing July 2020 to July 2025, falling from 1,949 permits to just 623. That puts San Jose at the very top of the list for declining construction nationwide…