Study: Tech Industry Not to Blame for High Home Prices
February 12, 2014
Home prices are 82 percent higher in “tech hub” locations than in other large metros. But don’t blame technology for contributing to the big disparity, according to a new report from Trulia based on census data. The tech industry didn’t push up prices — instead, companies were drawn to places that were already high-priced, near major research universities, technically skilled workers, computer manufacturing industries, and nice climates, the study suggests.
“Housing in tech hubs was expensive even before the modern Internet era,” says Jed Kolko, Trulia’s chief economist. “In 1990, median price per square foot was 52 percent higher in tech hubs than in other large metros.”
The National Association of REALTORS® latest fourth quarter report also shows that home prices are some of the highest in tech hubs. For example, the two priciest housing markets in the nation are located in tech hubs -- San Jose, Calif., in which the median home price is $775,000 and San Francisco with a $682,400 median home price. As comparison, the median single-family home price nationwide is $196,900.
Tech hubs showed a gain in home prices the past year that was similar to other housing markets, when taken into account with the severity of the housing crisis, the Trulia report notes. The 10 biggest tech hubs in the nation saw an average price gain of 13.4 percent in 2013 compared to 2012 compared to about an 11.4 percent gain among other metro areas.
Those 10 biggest tech hubs are San Francisco, Oakland, San Diego and San Jose, Calif.; Seattle; Middlesex County, Mass.; Raleigh, N.C.; Bethesda, Md.; Austin, Texas; and Washington, D.C.
Source: “Don’t Blame Tech Industry for Tech Hubs’ High Home Prices,” CNBC (Feb. 6, 2014)
Updated: November 25, 2020