A recent study by real-estate brokerage Redfin showed that more people are looking to move out of the Bay Area than ever before. Redfin CEO Glenn Kelman said that tech workers and their high salaries could be responsible for making Silicon Valley unaffordable.
A new Redfin study demonstrates a correlation between rising home prices and hiring by big tech companies.
They found that, as Amazon, Apple, Facebook, and Google have ramped up their hiring in various cities in the past year, the cost of homes in those cities has also gone up.
“For every 1% increase in technology workers, there’s a roughly half-percent increase in home prices above and beyond the national rate of appreciation,” Kelman writes on the Redfin blog.
Nationally, home prices have risen by 6.5% in the last year, while tech companies as a whole have increased their workforce by 3%.
Seattle and Boston have seen the biggest increases in hiring by tech companies over the past year. In Seattle, home prices have risen 12.7% year-over-year, while hiring of tech workers has risen by 21%. Boston, however, seems to be an anomaly, as home prices have only risen 3% while hiring has increased by 18%.
Redfin also broke down the rate of employee growth by company and city. Redfin
As these high-salaried tech workers move to other cities, a new set of anxieties arise. In an earlier interview with Business Insider, Kelman called these imminent changes the “Valley-fication of America.”
“They’re coming in to these new markets with a lot more money, and everything becomes more expensive,” Kelman said. “Some might see this as the apocalypse — and there will be more gentrification — but some will see it as a benefit to the culture. It invigorates the economy. With good leadership, you can balance wealth creation with being a good influence on the city you’re building you company in.”