San Francisco Bay Area residents facing expensive housing costs continue to look elsewhere to buy a home, but Seattle has become a less popular landing spot, according to a new report from real estate company Redfin.
About one in four people in the Bay Area using Redfin searched for homes in other markets in the first quarter, a figure that is largely unchanged from a year ago. About 2.8 percent of those people looked at Seattle, a decrease from last year’s 5.1 percent.
The most commonly searched potential destination for Bay Area residents was Sacramento, Calif., at 6.8 percent, followed by Southern California at 5 percent.
“Other” destinations accounted for 6.6 percent of all home searches by Bay Area residents. These cities include rising tech hubs around the country with more affordable homes than Seattle and San Francisco like Austin ($286,000 median home price), Boston ($360,000 median home price), Washington D.C. (375,000 median home price) and Denver (35,000 median home price). Seattle’s median home price is $440,000, according to Redfin.
The median home price in San Francisco was $1.2 million as of May. Neighboring cities San Jose and Oakland also sport some of the highest home prices in the country at $930,000 and $650,000, respectively.
Other cities have seen rapid growth in tech jobs, rivaling top hubs like San Francisco and Seattle. In Austin, the tech sector added 9,000 new jobs from 2014 to 2015, or a 17.6 percent increase in the number of tech jobs.
In 2015, tech jobs in Denver increased by 10.7 percent, or 5,603 jobs. The tech scene accounted for 20 percent of all new jobs in the region.
Despite the drop in Seattle searches, Redfin broker Daniel Burton said he continues to work with a lot of buyers from the Bay Area who live in Seattle.
“It’s quite common for people to begin home searches a year or so before they buy to test the waters and get settled financially, and in their new jobs and cities,” Burton said in the report. “We’re working quite a bit with this second wave of Bay Area homebuyers — people who searched for Seattle homes while still in the Bay Area and decided to rent for a year or two after moving, and are now entering the market to buy now.”
According to a previous Redfin report, tech jobs can lead to higher housing prices. It looked at hiring among the four biggest tech companies — Amazon, Apple, Facebook and Google — and found that for every 1 percent increase in tech jobs, home prices increased approximately .5 to .63 percent. That report found a 21 percent hiring increase by the big four in Seattle and a 12.7 percent spike in home prices.
These tech employees increase demand for homes, according to Redfin, making it harder for middle class and local people to buy.
“With their high incomes and large down payments, tech workers pack a big punch,” said Redfin chief economist Nela Richardson. “Even small numbers of workers moving from the Bay Area can have dramatic effects on high-demand neighborhoods in the urban core near jobs and city amenities. Locals often can’t compete and end up moving farther away from urban tech hubs where they can afford to live.”
In today’s new report, Redfin argues that restrictive zoning laws limiting new construction also play a part in rising home prices.
“These new tech hubs must get ahead of this growth with a particular focus on housing if they want to avoid repeating the Valley’s mistakes,” according to the report.
