A recent article on SFCurbed.com addressed a question that’s been rolling around in the back of many heads for a while: Is it becoming too expensive to live in Silicon Valley? If data from Redfin.com is any clue, the answer is “For some, probably.” The SFCurbed article “Even Techies May Now Be Getting Priced Out of the Bay Area” points out some surprising stats about valley residents who are looking to relocate. An increasing number of these movers are exploring the possibility of relocating to someplace other than here to escape the skyrocketing Silicon Valley home prices.
According to Redfin, the number of locals searching for a new home located near their old one (i.e., in the valley) has dropped from 85.5% in 2011 to 75.8% this year. Where are these people searching for their next home?
Just over 5% are looking in Seattle, up from 1.2% four years ago. In that same period, people searching Redfin for homes in Sacramento has jumped from 4.3% to 7.0%. Home searches by local residents for properties in Portland have risen to 2.6% from 0.5% in 2011.
Comparing Silicon Valley home prices to those in other markets
Extremely high housing prices are causing some to start seeking more affordable places to live. Look at the median sale price for homes in cities where tech industries and operations are taking hold:
- Seattle: $565,000
- Boston: $480,000
- Portland: $375,000
- Denver: $335,750
- Austin: $319,655
- Chicago: $292,000
Compare these prices with the median sale price of homes throughout Silicon Valley: $1,050,000.
A move to Seattle, as an example, could result in a financial boon. Median pay for software developers in this northern city is $100,000 per year. Yes, that’s $12,000 a year less than what a developer would earn in San Jose, but living in Seattle could cost as little as half what it would cost to stay in the valley and create software here.
Boston is another example. A Redfin broker described the influx of Silicon Valley residents into Bean Town by saying, “My God, they are pouring in.” It is reported on Redfin’s own website that these transplants are paying 20% above asking prices to secure a home in this town, while upsetting Boston locals who can’t compete.
The two articles linked here provide plenty more details and facts about how, for many, Silicon Valley home prices are simply becoming too expensive. It’s doubtful we’ll see a mass exodus any time soon, but it will be interesting to see where movers are looking for homes in the coming months and years if Silicon Valley home prices continue to leave other U.S. markets in the dust.