LOS ANGELES, CA / ACCESSWIRE / May 10, 2018 / Open Listings, an online real estate brokerage firm that focuses on home sales in the California market, recently conducted a study, which found that housing prices in key California cities have risen so much, they may no longer be affordable to the areas' population. This is especially true for the numerous technology workers that inhabit the Los Angeles and San Francisco areas.
A recent article in The Mercury News reported that even highly-paid tech workers are having a hard time affording homes in Silicon Valley. Even those that work at top tech firms like Google, Facebook and Apple are paying "more than 28% of their monthly salaries for housing within 20-minutes from where they work."
Surging Housing Prices
For years home prices in Silicon Valley have soared so local workers began moving to Silicon Beach, including Playa Vista, Marina Del Rey, Venice and Sana Monica, have also risen. The average software engineer working at top area companies like Hulu, Google, Apple, Netflix and SpaceX make around $210,500 but homes in the area have a median cost of nearly $900,000. According to Neil Shekhter, "Technology workers with six-figure salaries can no longer afford to live near their workplaces."
Those living in the Los Angeles area have an even more difficult time finding affordable housing, with software engineers needing 44% of their salaries to purchase a home close to work.
Here are some of the local markets and home prices:
- Engineers at Hulu in Santa Monica Hulu make approximately $129K; the median home price is $1.05M.
- At Apple, engineers average $188K; home prices in Cupertino are around $1.16M.
- In the San Francisco area near Apple, Google and Uber, the median priced home is $1.2M.
One anomaly to this scenario is Hawthorn, California, home to Elon Musk's SpaceX headquarters. In Hawthorn, a medium-priced home is around $450K, so engineers would only need to invest 15% of their salary for a home.
The Open Listings survey focused only on tech workers, but with home costs being out of reach for high-salaried tech workers, it is an impossibility for those outside the technology sector like office workers, custodians, teachers and first responders. Those workers are forced to drive much farther from work to find affordable housing.
Technology workers were once blamed for the increase in home prices as they moved into urban areas adjacent to their workplaces. Today even highly-skilled, top paid workers are forced to move further from work to get affordable housing.
Neil Shekhter stated that the study brings to light the need for affordable housing. Senator Scott Wiener recently proposed a bill to "create more transit-rich and affordable housing" options in expensive housing areas like San Francisco and Los Angeles.
One of the top concerns for many of these tech companies is finding workers willing to invest more commuting or a higher percentage of their income for housing. Another option may for tech headquarters to relocate to regions with more affordable housing options.
NMS Properties is the trusted source for Los Angeles Apartments.
NMS has offered quality rentals in the Los Angeles area for nearly three decades. Since 1988, NMS has developed and managed a large portfolio of premier apartment buildings and commercial properties in Santa Monica, West Los Angeles, Brentwood and the San Fernando Valley
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SOURCE: NMS Properties, Inc.