E - PAPER
CURRENT MONTH
LAST MONTH
Bay Area Least Affordable for Silicon Valley Tech Workers
Despite high salaries and world-class amenities, San Jose is the least affordable place for tech workers to buy a home. A new analysis by the American Enterprise Institute found the typical tech worker and his or her partner — with two incomes totaling $200,000 — can
BY
Realty Plus
Published - Wednesday, 27 Jan, 2021
Despite high salaries and world-class amenities, San Jose is the least affordable place for tech workers to buy a home. A new analysis by the American Enterprise Institute found the typical tech worker and his or her partner — with two incomes totaling $200,000 — can afford just 12 percent of the homes for sale in the San Jose metro area.
The picture in San Francisco and the East Bay is nearly as bad, with just 21 percent of homes for sale fitting in the budget of an average tech couple. The high-hurdles to home ownership are fueling a Bay Area exodus that has contributed to the state’s sluggish population growth in recent years, researchers say.
The analysis gives another explanation for the Bay Area exodus. And it’s not only workers who are leaving. Tech heavyweights HPE and Oracle have announced moves of their headquarters from Silicon Valley to Texas.
The spread of remote work will only accelerate migration from the Bay Area. With new workplace flexibilities, tech workers have a choice between high-cost regions near their offices and low-cost regions with bigger houses and remote work.
The AEI study found California has 4 of the top 5 cities in the U.S. with the lowest rates of homeownership: San Jose (52 percent homeownership) and San Francisco metros (52.8 percent) fall behind only Los Angeles (48 percent) and Fresno (49 percent). The analysis is based on 2019 U.S. census and home sales data. AEI researchers considered the median income for tech workers in metros across the country and compared it to home prices in each market. They assumed a conservative expenditure of three times median income for purchasing a house.
In Santa Clara County, the typical household income for a tech worker and their partner is around $200,000, giving a couple a $600,000 budget, AEI researchers estimate. The median home price in the county is $1.3 million. Even if home prices declined 5 percent over the next five years, Pinto noted, San Jose would still be the most expensive metro in the U.S. In the East Bay and San Francisco, the typical household with at least one tech worker has an estimated income of about $187,000, producing a $561,000 home-shopping budget, according to the analysis.
The business lobby Bay Area Council has pressed state lawmakers to make it easier to develop and build new homes and apartments. But widespread efforts to overhaul zoning have failed to gain traction in Sacramento. Despite a steady flow of techies to cheaper communities like Sacramento and out-of-state locations, local real estate agents say demand remains strong.
RELATED STORY VIEW MORE
Nigeria Shows Widening Transparency Gap in Real Estate
Singapore Private Home Rents Set To Climb By 10-15%
Saudi Arabia’s Ambitious Projects from World’s Largest Airport to Skyscraper
NEWS LETTER
Subscribe for our news letter
E - PAPER
-
CURRENT MONTH
LAST MONTH
REALTY+ SPECIAL ISSUES
Test Magazine
THE TECH TITANS 2022
COFFEE TABLE BOOK 2022
Anniversary Issue 2022
Anniversary Issue 2020
VIDEO GALLERY VIEW MORE
