New study shows profound impact of tech industry on Bay Area real estate

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  • 584eb data New study shows profound impact of tech industry on Bay Area real estate


Image 1 of 25 – Tech boom? Try explosion

 

 

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

A typical example of the tech explosion: this home in Santa Clara, billed “close to Apple” sold for $550K in 2010, now listed at $1,090,000. Photo: Redfin

Image 2 of 25 – Tech boom? Try explosion

A typical example of the tech explosion: this home in Santa Clara, billed “close to Apple” sold for $550K in 2010, now listed at $1,090,000. Photo: Redfin

A typical example of the tech explosion: this home in Santa Clara,…billed “close to Apple” sold for $550K in 2010, now listed at…$1,090,000. Photo: Redfin

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

Inside Santa Clara home.

Image 3 of 25 – Tech boom? Try explosion

Inside Santa Clara home.

Inside Santa Clara home.

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

Santa Clara living room.

Image 4 of 25 – Tech boom? Try explosion

Santa Clara living room.

Santa Clara living room.

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

Kitchen/dining, Santa Clara.

Image 5 of 25 – Tech boom? Try explosion

Kitchen/dining, Santa Clara.

Kitchen/dining, Santa Clara.

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

Alt view.

Image 6 of 25 – Tech boom? Try explosion

Alt view.

Alt view.

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

Kitchen in Santa Clara.

Image 7 of 25 – Tech boom? Try explosion

Kitchen in Santa Clara.

Kitchen in Santa Clara.

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

Interesting wall detail in Santa Clara home.

Image 8 of 25 – Tech boom? Try explosion

Interesting wall detail in Santa Clara home.

Interesting wall detail in Santa Clara home.

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

Bedroom,

Image 9 of 25 – Tech boom? Try explosion

Bedroom,

Bedroom,

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

1 of 4 beds in Santa Clara.

Image 10 of 25 – Tech boom? Try explosion

1 of 4 beds in Santa Clara.

1 of 4 beds in Santa Clara.

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

1 of 3 baths.

Image 11 of 25 – Tech boom? Try explosion

1 of 3 baths.

1 of 3 baths.

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

Patio, no yard.

Image 12 of 25 – Tech boom? Try explosion

Patio, no yard.

Patio, no yard.

https://www.redfin.com/CA/Santa-Clara/160-Mark-Twain-Ct-95050/home/753074

Same subject, different view.

Image 13 of 25 – Tech boom? Try explosion

Same subject, different view.

Same subject, different view.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Here is another home, this one in Cupertino, billed as ‘Minutes to Apple HQ.” It was built in 2007 and now lists at $1.808,000 though is less than 1700 square feet.

Image 14 of 25 – Tech boom? Try explosion

Here is another home, this one in Cupertino, billed as ‘Minutes to Apple HQ.” It was built in 2007 and now lists at $1.808,000 though is less than 1700 square feet.

Here is another home, this one in Cupertino, billed as ‘Minutes to…Apple HQ.” It was built in 2007 and now lists at $1.808,000 though is…less than 1700 square feet.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Inside Cupertino.

Image 15 of 25 – Tech boom? Try explosion

Inside Cupertino.

Inside Cupertino.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Cupertino dining.

Image 16 of 25 – Tech boom? Try explosion

Cupertino dining.

Cupertino dining.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Cupertino kitchen.

Image 17 of 25 – Tech boom? Try explosion

Cupertino kitchen.

Cupertino kitchen.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Laundry/bath.

Image 18 of 25 – Tech boom? Try explosion

Laundry/bath.

Laundry/bath.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

1 of 3 beds in Cupertino.

Image 19 of 25 – Tech boom? Try explosion

1 of 3 beds in Cupertino.

1 of 3 beds in Cupertino.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Office/den/whatever room.

Image 20 of 25 – Tech boom? Try explosion

Office/den/whatever room.

Office/den/whatever room.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Bed.

Image 21 of 25 – Tech boom? Try explosion

Bed.

Bed.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Walk-in closet

Image 22 of 25 – Tech boom? Try explosion

Walk-in closet

Walk-in closet

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

1 of 3 baths. Very shiny.

Image 23 of 25 – Tech boom? Try explosion

1 of 3 baths. Very shiny.

1 of 3 baths. Very shiny.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Patio and spa.

Image 24 of 25 – Tech boom? Try explosion

Patio and spa.

Patio and spa.

https://www.redfin.com/CA/Cupertino/10712-Farallone-Dr-95014/home/1622806

Little yard, spa, exterior/Cupertino home.

Image 25 of 25 – Tech boom? Try explosion

Little yard, spa, exterior/Cupertino home.

Little yard, spa, exterior/Cupertino home.

The tech industry. Over and over in recent years, this economic sector has been targeted as the cause of dramatic upticks in both home prices and rents in the Bay Area.

But is this a fair accusation? Apparently so, according to a new Zillow study. “[This analysis] highlights the widening wealth gap between tech company employees and other U.S. workers – a gap that is putting increasing pressure on housing markets where tech companies are booming,” said Zillow chief economist Dr. Svenja Gudell.

Facebook, Apple, Google and home ownership

First off, home values: Data show that Google, Facebook and Apple employees live in pricier homes than other Bay Area workers and have faster home value growth as well. In fact, the average Apple worker now lives in a home that is more than five times more valuable than the average U.S. home, according to Zillow.

Using census data, Zillow found the “typical worker at Apple’s Cupertino, Calif., headquarters lives in a home that is worth about $1.14 million, about $241,000 (27 percent) more than the median home in the already-pricey San Jose metro area and $380,000 (50 percent) above the median home value in the San Francisco metro area.”

Apple’s not alone. Workers at Google and Facebook headquarters — in Mountain View and Menlo Park respectively – live in more valuable homes as well. The median home value among Facebook workers is $1.25 million; among Google workers, it’s $1.28 million.

Zillow used data from the U.S. Census Bureau tracking where workers live and work across the Bay Area, then combined that data with Zillow’s Living Database of All Homes to compute a median home value for workers at the Apple, Google, and Facebook campuses in the Silicon Valley. Boiled down, the information shows:

  • On average, employees of Google, Facebook and Apple live in homes with a median value of well over $1 million.
  • Homes rented or owned by employees of these three tech companies are worth more than surrounding homes and are appreciating more quickly than surrounding homes

The gap, just like the iPhone, is getting bigger: 

The gap between tech employee home values and those of surrounding areas has grown larger. Apple workers’ home values took off after the first iPhone was released in June 2007. Apple’s stock price rose, increasing the wealth of many employees and cementing the company as one of the most successful in the world. Prior to summer 2007, the typical Apple worker lived in a home that was 13 percent more expensive than the typical San Jose home; since summer 2007, that gap has widened  to 20 percent.

As recently as 2010, homes in the neighborhoods where Apple workers lived were worth only three times the national median. Now they are worth five times that median.

Apple’s gains are the most dramatic, likely thanks to the iPhone. In the same period, the typical Google employee went from living in a home that was 37 percent more expensive than the average San Jose home in 2007 to living in one that is now 39 percent more expensive. For Facebook employees, the gap went from 31 percent to 33 percent.

San Francisco metro highlights

Other interesting (and possibly troubling) local findings point to recently inflated housing prices in all areas in the San Francisco metro, including rent:

  • Condos have appreciated 13.5 percent over the past year
  • Single-family homes have appreciated 12 percent over the past year
  • Rent has gone up 13.3 percent over the past year

The takeway

Probably the only thing we didn’t already know here is just how much and how deeply the tech boom has impacted local real estate. If you’re qualified to work for these companies, you’re likely qualified to buy and/or rent homes nearby. Other people, however, may be thoroughly priced out.

Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert

Article source: http://blog.sfgate.com/ontheblock/2015/11/02/new-study-shows-profound-impact-of-tech-industry-on-bay-area-real-estate/

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