Looking to buy a house on the cheap? You may want to stay away from the top tech hubs in the U.S. That’s the finding from a report released this week by Trulia, the online real estate company with operations in San Francisco and the Seattle area.
After analyzing housing prices, Trulia found that prices were 82 percent higher in tech hubs than in other large metro areas.
That’s making it harder for folks to afford to live in cities like San Francisco and Seattle, even for those well paid coders and engineers who work in the industry.
The report notes:
And while people living in tech hubs have higher incomes, they’re not high enough to bridge the affordability gap. Just 48% of the homes listed for sale in tech hubs were affordable to the middle class (based on median metro household income), versus 63% in other metros. Of course, there are huge differences in affordability even among tech hubs: just 14% of for-sale homes in San Francisco are affordable, compared with more than 60% in Raleigh, Bethesda, and Washington, DC. Still, the overall gap between housing prices in tech hubs and other large metros is 82% – a huge difference that’s much bigger than the gap in rents.
Year-over-year increases in asking prices among the 10 tech hubs ranged from a high of 24.4 percent in Oakland to a low of 6.5 percent in Raleigh. In Seattle, asking prices were up 16.6 percent, ahead of both San Francisco and San Jose.
Apartment prices also are on the rise in tech hubs, with a typical two-bedroom renting for 37 percent more than in the other 90 metros ($2,053 versus $1,504). As the chart below shows, it is especially expensive to rent in the San Francisco Bay Area, which has seen battles erupt in recent months over rising housing prices and rents tied to the red hot tech sector. In the top 10 tech hubs, rents were up 5.7 percent year-over-year, compared to three percent for the other 90 metro areas.
For sale sign photo via Shutterstock.