San Jose, California, is on its way to a brighter economic picture, according to the city's latest Economic Center Report. Job growth rose through 2007 and commercial real estate vacancy has dropped by nearly a third, creating opportunity for those selling and buying in the nation's 10th largest city.

The average price of a home in the San Jose area, which includes Sunnyvale and Santa Clara, stands at $852,000. That figure is up more than 9 percent from the same reporting period last year and up 22 percent since 2004.

The job growth in the Silicon Valley Capital city creates competition for office space, as well. The vacancy rate in that category dropped 30 percent in the last year.

Paul Krutko, chief development officer for the city, says in a press release at the city's website , "Demand for housing will continue to be a challenge as San Jose continues to rebound from the effects of the dot com years." Housing statistics bear that out, with residential rental vacancy rates at a 7-year low.

San Jose Mercury News quotes John Sloven, director of the Stanford Institute for Economic Policy Research, saying, "Silicon Valley is in better shape than the overall U.S. economy. My overall assessment is the Silicon Valley economy is going to come through this pretty well unscathed."