Anyone wondering how Bay Area home prices are affecting its residents can just ask a real estate agent. Redfin today is releasing data showing that the number of Bay Area homebuyers represented by Redfin’s Portland agents has tripled in the past year. For our Seattle agents, that number has doubled.
As the New York Times’s Nick Wingfield reported this week, the largesse of Silicon Valley has come to cities like Seattle, Portland and Austin, bringing with it high-paying jobs and more tax revenues, but also new challenges to the city’s affordability and diversity.
This is a long-term trend. Earlier in 2015, we had noticed that one in four Bay Area home buyers was searching for homes outside the Bay Area, up from one in seven in 2011; as Redfin executive Adam Wiener said at the beginning of this year, “the dam has broken.”
Now at Nick’s request, Redfin looked at Redfin home buyers who completed a sale between January and July, in 2015 compared to 2014. How many had at least 20% of their sessions on Redfin.com originating from a Bay Area Internet address?
As the stock market has faltered, Redfin agents see more people leaving the Bay Area, where salaries alone often aren’t enough to pay for homes.
The opportunities created by this migration for other American cities are breathtaking. But because so many of us at Redfin saw firsthand how wealth changed San Francisco in the absence of growth planning, we’ve been an advocate for the thoughtful approaches to diversity and affordability proposed by local governments here in the Northwest, in Denver and Austin.
This is a topic we’ve addressed in several forums, including at Startup Grind last month (minute 41):
We can’t just stick our heads in the sand. It seems like both the folks wary of a technology economy and the ones who have created it have almost begun to hope that this is all just a bubble about to burst. The current boom has brought the future to San Francisco early, and parts of it have made America’s most beautiful city less livable: the income gaps, the declines in racial and occupational diversity, the crowds, traffic and housing problems, the acquisitiveness of new wealth.
After five years of hyper-capitalism, many of my own San Francisco friends just want city life to return to the way it was. But it won’t. There are some absurdly overvalued companies to be sure, but the unprecedented profit and profit margins of Apple, Google and Facebook suggest that the change tech is bringing to business and society is permanent.
Instead of waiting for it to go away, or acting as if high-paying, creative jobs are a curse, businesses and government just have to be deliberate about building the cities we’ve always imagined. The good news is that we can, through education, tax policy, home-building, infrastructure — and a commitment among new-economy companies to pay a living wage to all the people doing the work. This is a topic Redfin will return to later this year and next, with more data and hopefully more ideas too.
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