A new report from Zillow found that people are less optimistic about the housing market in some of the country’s largest tech hubs. Residents of Seattle, San Francisco, Denver and San Jose think now is a worse time to buy a house in their city than just six month ago.
Seattle is the most confident tech hub, with just over 50 percent of Seattleites optimistic about the housing market. But that’s down 6 points since January, when 57 percent thought it was a good time to buy a home, according to Zillow’s Housing Confidence Index.
The tech economy in Seattle is percolating right now, with companies such as Amazon, Tableau, Zillow, Facebook and others hiring engineers like mad.
Denver saw the biggest drop in confidence, with 46 percent of people saying now is a good time to buy versus 54 percent back in January. San Jose has the lowest confidence of the major tech hubs and fell 7 percentage points, with just 36 percent saying now is a good time to buy. San Franciscans’ confidence is down as well, dropping 5 points to 40 percent optimism.
“Growth in well-paying tech jobs is undoubtedly helping fuel some of the very rapid home value growth in these markets, along with low inventory and high demand,” said Zillow chief economist Svenja Gudell. “But for current homeowners, rapid home value appreciation means substantial gains in equity. And some sellers may decide to capitalize on recent gains in home values and list their home for sale, boosting inventory.”
According to a July report from Zillow, the median sales price in the Seattle metro area was $371,400. That represented an increase on a monthly basis of 2.3 percent, and an increase of 8.9 percent annually. In fact, 87.4 percent of homes in the Seattle metro area saw their home values rise during the month of July.
Some have blamed the tech industry for rising home prices in tech hubs, and with some investors are warning of a tech bubble, those home prices could deflate if the bubble pops. If that happens soon, which some are predicting, people buying houses now may have a hard time recovering their initial investment in their homes.