The West Coast is home to some of America’s most prominent tech hubs like San Francisco and Silicon Valley, which both serve as headquarters for industry leaders like Amazon, Google and Apple.
While these hubs tend to boast a plethora of available jobs for software engineers, Real estate brokerage company Redfin claims that sky-high housing costs make these metros relatively unaffordable for the average tech employee.
According to the company’s recent study, a typical home in San Francisco’s housing market sold for more than $1.4 million in July, which is out of reach for someone earning the Bay Area’s median income of $186,300.
Redfin says this has encouraged many Bay Area homebuyers to consider relocating to markets that offer them a more reasonable cost of living, as the company discovered that 21% of Bay Area Redfin users searched for a home outside of their respective housing market in the second quarter of 2019.
“Because homeownership in expensive places like San Francisco is no longer a realistic consideration even for many people in high-paying fields, smaller inland cities are becoming increasingly attractive to young, educated people looking to build a career and live comfortably,” said Daryl Fairweather, Redfin’s chief economist. “Grand Rapids and Columbus don’t offer as many job opportunities or salaries as high as you’d find in San Francisco, but because housing and other costs are so much lower, software engineers and other skilled professionals can achieve a higher quality of life in the Midwestern cities.”
Fairweather says many tech companies are following the talent and opening headquarters or satellite offices in those places, which is contributing to growth in job opportunities for people seeking affordable housing and slower-paced lifestyles.
In order to determine which of the nation’s housing markets offer tech workers more housing affordability, Redfin teamed up with LinkedIn to identify which metros are affordable on a typical software engineer’s income.
According to the companies, tech workers may want to consider a move to Charlotte, North Carolina or Buffalo, New York rather than Silicon Valley.
“Both of these markets saw 4.1% year-over-year job growth from January 2018 to January 2019 for people in the field, and the typical software engineer would only need to spend 18.9% and 13.3% of their annual income, respectively, on housing,” Redfin writes.
Furthermore, the company suggests other markets like Grand Rapids, Michigan, Colorado Springs and Columbus, Ohio, which have all recently experienced more than 3% job growth. In these markets, the typical software engineer would need to spend 20% or less of their income on housing.
This video highlights the most affordable markets for U.S. tech employees, according to Redfin:
1. Charlotte, North Carolina
2. Buffalo New York
3. Grand Rapids, Michigan
4.Colorado Springs, Colorado
5. Columbus, Ohio
Note: In order to conduct this study, Redfin used a selection of the country’s emerging housing markets with growing tech scenes. To be included in the report, housing markets had to experience greater than 3% year-over-year job growth for software engineers in January, per LinkedIn data, and median earnings sufficiently high to afford a median-priced home in the metro.