Rents are rising faster in U.S. tech hubs than in the rest of the
country, Trulia said in a report released Thursday. In January, it
said, rents rose 3.3 percent in the nation's 100 biggest
metropolitan areas in January, but they rose by an average of 5.7
percent in the 10 biggest tech hubs.
The report blamed the high prices on factors ranging from the lack
of new-housing construction in many tech centers to the technology
industry's presence in areas that commanded top dollar even before
the current technology boom.
Landlords ask one-third more in rent for a typical two-bedroom unit
in a tech hub compared with other big metro areas, the report said — $2,053, on average, compared with $1,504 in other metropolitan
San Francisco topped the list, with a 12.3 percent rise to a median
average of $3,350 for a two-bedroom apartment. The city has seen
unrest tied to home prices in recent months, with protesters who
blame well-compensated technology workers for rising evictions and
rents, and prevented technology-commuter buses from leaving their
Meanwhile, some residents who have made fortunes through technology
say they are being unfairly blamed, given that the companies they
build up help create jobs. Venture capitalist Tom Perkins recently
drew criticism for comparing the treatment of wealthy Americans to
the Nazis' persecution of the Jews.
Other tech centers with rapidly rising rents include San Diego,
Calif., with a 10.3 percent rise to an average $1,850 for a
two-bedroom home; Austin, Texas with a 10.1 percent rise to $1,350;
and Seattle, Wash. with a 9.2 percent gain to $1,650.
Asking prices of houses for sale in technology hubs, however, rose
in line with national trends, the report found. House prices in
January rose an average 13.4 percent from a year ago in the nation's
10 largest technology hubs, compared with 11.4 percent in 90 other
[to top of second column]
Tech hubs tend to have fewer homes stuck in foreclosure, the
report's authors wrote. When they adjust the numbers to reflect
foreclosure inventory, the price change is no different compared
with other metro areas.
But tech hubs have much higher home prices compared with other areas
- $242 per square foot, compared with $133 per square foot in other
areas, making them much less affordable, the report found.
"Tech hubs also have higher incomes, but not high enough to bridge
the affordability gap," wrote the report's authors. "Just 48 percent
of homes listed for sale were affordable to the middle class based
on median metro household income, versus 63 percent in other
Trulia selected its top tech hubs by evaluating cities for the
percentage of local employment in technology-related fields such as
data processing and hosting, computer programming, software
development, and Web development.
San Jose, Calif.; Seattle, Wash.; San Francisco, Calif.; Middlesex
County, Mass.; Raleigh, N.C.; Bethesda-Rockville-Frederick, Md.;
Austin, Tex.; Oakland, Calif.; Greater Washington, D.C.; and San
Diego, Calif. comprised the 10 tech hubs studied for the report.
(Reporting by Sarah McBride; editing by Ken Wills)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.