Dive Brief:
- The San Francisco Bay area’s home prices are skyrocketing, and protesters have said companies like Apple, Google and Facebook are to blame for the increases, The Wall Street Journal reported.
- Real estate data website Zillow tracked Apple employees and found they live in more expensive homes than others in the Bay Area, and home values rise faster in their neighborhoods. That difference became more pronounced after the release of the iPhone, when Apple’s stock price, and employee compensation took off.
- Zillow found that homes occupied by Apple workers are appreciating at 18% each year — significantly higher than the 11% annual appreciation for San Francisco properties as a whole and 12% for San Jose. Since Apple debuted the iPhone in June 2007, the average difference between median home values of San Jose workers and Apple workers surged from 13% to 20%.
Dive Insight:
A similar effect is occurring in cities like Boulder, CO, and Portland, OR, where tech giants are establishing offices. Home prices in those cities are rising, creating a high demand for rentals and causing rents to soar, according to Zillow.
There is ongoing debate as to whether or not tech companies should be held 100% accountable for climbing home prices in the Bay Area. After all, this is a regulation-laden area of the country where home prices were high and affordable housing scarce even before the iPhone made its debut.
In fact, according to The Journal, cities like Seattle and Austin, TX, are experiencing growth from the tech industry as well, but, because of available land and looser zoning regulations, they haven’t seen the price increases found in the Bay Area. Builders in those other up-and-coming cities might see more opportunity for development and available land, but the selling prices of their new properties likely won't be able to reach Bay Area levels.
Regardless of the cause of the rise in prices, The Journal noted that some people in those areas are benefiting from higher appreciation rates, as the increase in value bodes well for the possibility of a higher selling price.
"Some people may be selling because the price is high and also because they think the bubble is going to burst any time because it’s just insane already," Sophie Tsang, a Cupertino, CA, real estate agent, told The Journal. "There’s another group of potential sellers that think it’s going to keep going up."
