After years of techies and start ups flocking to Silicon Valley, now they are flocking away, for better pay and more affordable places to live.
According to a study at Redfin, the exodus from Silicon Valley is real. The real estate brokerage analyzed searches on its database and found a dramatic increase in the number of Bay Area people searching for homes in Seattle, Portland, Boston, Austin, and Chicago.
“In 2011, one in seven people in the Bay Area searched Redfin.com for homes outside of the Bay Area. Now it’s one in four,” said Redfin CEO Glen Kelman.
One Boston broker told him Silicon Valley transplants are “pouring in.”
“Folks are leaving Silicon Valley mostly because they can’t afford to stay,” wrote Kelman in a commentary entitled, Digital Diaspora.
“The median price for a Silicon Valley home just exceeded one million dollars. That’s about double what it is in other tech cities like Boston or Seattle, and triple what it is in aspiring technology hubs like Portland, Denver or Austin.”
He said tech jobs in Silicon Valley may pay more than other cities, but it’s not enough to offset the high cost of housing.
The median pay for a software developer in San Jose is $112,000 compared to $83,300 in Boston, and $79,700 in Portland. The median sale price of a home in Silicon Valley is $1,050,000. The median sale price in Boston is $480,000. In Portland, it’s only $375,000.
Kelman says salaries and home prices aren’t the only things cheaper elsewhere. Commercial rent has skyrocketed.
“Silicon Valley commercial rents are nearly double what they would be in Denver or Portland, and 50% higher than Austin or Seattle,” he said.
Mark Beltramo, president of Piedmont Moving Services in San Jose, has seen the trend. He said there has been a definite exodus of high-paid tech workers from Silicon Valley.
“In some cases their company is moving them so they’re keeping their salary, yet they are cutting their housing costs by a huge amount,” he said.
Doug Wilson works in tech. He said he loves the Bay Area and is sticking around, but has colleagues who have taken the leap.
“They realized they’re being priced out of the housing market. Other places such as Texas provide opportunities to make six figures and the money goes a lot further.”
Wilson confirms companies are leaving, too. He knows of two that are in the process of moving, right now.
“They’ve just had it with California,” he said.