If you live in a region with a thriving tech industry, you’ve probably noticed your dollar doesn’t go as far in the housing market as it used to.
There are a few factors causing rent and home values to rise, says Svenja Gudell, chief economist at Zillow, the Seattle-based real estate media company. Most notably, when tech companies do well they hire — and they tend to hire young people who look to buy or rent entry-level homes. This increases demand faster than inventory can be supplied.
“The tech sector’s been doing really well,” said Gudell. “We’ve seen a lot of job growth in tech and a lot of income growth in tech as well, so a lot of these cities have attracted new people…Inventory is pretty tight given how many people are looking for homes, especially first-time home buyers. If you think about a lot of the millennials that are active in tech, buying their first home, they’re having an especially hard time breaking into those markets and affordability is becoming a real issue.”
Gudell also noted that many people who lost their homes in the 2008 crash are still renting, and many who would like to buy a home in these regions can’t afford to do so.
“They’re staying renters,” she said. “You have millennials that would like to buy but they can’t because there are not a lot of homes for them to buy, so you just have a lot more renters now and there aren’t enough rental units out there. So, over the last two or so years, we’ve seen very rapid rental appreciation.”
Booming tech industries certainly affect the housing market, but some of these regions are seeing faster appreciation than others. GeekWire used Zillow data from January 2016 to compare how far your dollar goes in the nation’s top tech hubs. Continue reading for the results.
Median Home Value: $865,350
Median Rent: $3,395
Median Home Value: $371,100
Median Rent: $1,939
Median Home Value: $382,400
Median Rent: $2,394
Median Home Value: $384,500
Median Rent: $2,257
Median Home Value: $244,000
Median Rent: $1,684
*Bay Area statistics are averaged from Zillow data on San Francisco and San Jose.