As rents and home prices have skyrocketed over the past few years, the Bay Area has become a more difficult place to live, to put it mildly. Real estate website Redfin has compiled data showing that Bay Area residents are increasingly looking to buy in other locations. Back in 2011, 85.5 percent of people located in the Bay Area were looking for homes within the region. Now, that figure has fallen to 75.8 percent looking locally, with growing percentages of people searching for homes in Sacramento, Seattle, and Portland. Seattle—a tech hub with more reasonable housing—has seen the biggest jump in searches, going from 1.2 percent of Bay Area searches in 2011 to 5.1 percent today.
According to Redfin, home prices that exceed $1 million in Silicon Valley and San Francisco are about double those in other tech-friendly cities like Boston or Seattle and verging on triple those of young start-up hubs like Denver, Portland, and Austin. And although Bay Area salaries are high, the pay advantage of this area over other cities with tech scenes isn't enough to offset the huge housing cost differences.
According to Redfin's scan of earnings from compensation data company PayScale.com, the median pay for a software developer in San Jose is $112,000, which would make a million-dollar home still a struggle to afford. In Seattle, the median pay for a software developer is $100,000, just about 11 percent less, while the median sale price—$565,000—is a little over half the median in Silicon Valley, and less than half San Francisco's median of $1.225 million. And, as you may recall, a report last year from Zillow showed that only 8 percent of houses in San Francisco were affordable on the average engineer's salary.
Companies in the Bay Area will pay a premium for engineers, but, as Redfin notes, they are also paying a significant premium for office space, which is 50 percent more expensive here than it is in Seattle and double the cost in places like Denver and Portland. At some point, it becomes difficult to justify paying higher rent and higher salaries just to be in the Bay Area.
The local tech scene and the economy are of course still thriving, so we can't exactly call this a tech exodus. But these are signs that perhaps there is a breaking point for both residents and companies when the region just gets too expensive and it becomes time to look for a more affordable place to call home.
· San Francisco's Median Rent Climbs to a Whopping $4,225 [Curbed SF]
· SF's Median Home Price Hits $1.225M, Another New Record [Curbed SF]
· The Digital Diaspora [Redfin]
· Even Doctors and Engineers Can't Afford to Buy in SF [Curbed SF]