Reporter- San Francisco Business Times
The tech sector is launching booms in different cities throughout the country — not just in San Francisco — in nearby places like San Jose and Oakland and farther cities like Raleigh, N.C., Seattle, Boston and Washington D.C.
And while San Francisco leads the pack in terms of overall housing costs, it’s not alone in how technology is impacting metro regions, according to a report from Trulia, a San Francisco-based real estate information company.
Trulia came up with a list of the top 10 tech metros in the nation and dug up some interesting facts. Read the full report here.
The scores were based on a combination of how many jobs in the area fell into software publishing, data processing and hosting, and Internet publishing, broadcasting, and search-portal industries and how many local employees work as computer programmers, software developers, and web developers.
I was surprised to see Oakland rank at number 8. It’s typically seen as a city that the Bay Area’s tech boom missed, but it’s also a city that has seen a rapid rise in real estate values with a 24.4 percent gain in home prices in the past year. San Jose saw appreciation of 14.2 percent while San Francisco came in at 16.2 percent growth.
Still home price growth is happening all over the nation, so it’s not surprising to see tech hubs leading the pack since they have a growing employment sector.
“Tech hubs, relative to other metros, had steeper price declines during the bust and have fewer homes stuck in foreclosure today – and both of those factors are driving the current price rebound,” said Jed Kolko, chief economist for Trulia, in the report.
Other tech hub trends:
- Rents are rising faster in tech-driven cities than other parts of the country. The national average for rent growth was about 3.3 percent during the past year while for the top 10 tech metros, the average increase was 5.7 percent and overall, average rents in tech hubs are 37 percent higher than cities not on the list.
- Tech hubs tend to be places where housing has been expensive since before the Internet took over our lives. “Decades ago, many of the housing markets that would become tech hubs had advantages like major research universities, technically skilled workers, thriving computer manufacturing industries, or nice climates,” Kolko states in the report. “Places with advantages like these tend to be more expensive, and they turned out to be fertile soil for the today’s tech industry.”
- Housing affordability depends on housing construction. Markets like San Francisco and San Jose have lots of new jobs, but housing costs keep pricing people out. Not surprisingly, cities like Austin, Texas and Raleigh are growing tech jobs and have enough space to build housing to go with it, so their home prices haven’t skyrocketed like the development-constrained Bay Area.
Blanca Torres covers East Bay real estate for the San Francisco Business Times.