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Silicon Valley home prices headed here?

Posted by Scott Van Voorhis October 8, 2013 08:58 AM

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Home prices are soaring and buyers are once again bemoaning the high cost of living in Greater Boston.

And it is also prompting some to take stock of the pros and cons of life inside the I-495 beltway.

"Living in this area is an acquired taste," writes Dr. Doofenschmirtz, a regular on the comment board of this blog.

"Many people can not hit all of the adult milestones, taken for granted elsewhere, because it costs too much. I know some people who still live in that first starter condo in Cambridge, now well expanded in to the attic, because wanting to stay close to friends, schools and jobs, means sucking it up and making the best of what you have."

Of course, if we think prices are crazy now around here, all we have to do is look at what happened to Silicon Valley.

With an average home price of $1 million, the West Coast tech magnet makes even Wellesley prices look like a steal.

In desperation, Facebook has even gotten into the business of apartment development to ensure its employees at least have a roof over their heads.

With our fast growing life science and tech industries - and how allergic our towns and suburbs are to any just about new housing - we could very well be headed in the same direction.

Workers in these knowledge industries have the paycheck to make things work and snag a house, even it is not ideal.

"To be sure, this is a minority of the population," writes James in Cambridge. "But there are more than enough people who fit this description to fill every decent house going on the market. Everyone else simply can't afford to buy in the Boston area, or has to buy something they don't really like."

But the outlook isn't as cheery for many other middle class buyers, who are making significantly less money than before the Great Recession hit.

Here's more from James:

"As a former housing bear on this blog, here's my mea culpa.

I saw that prices were soaring as incomes were stagnating, and I figured something had to give.

What I hadn't fully appreciated was that incomes really WEREN'T stagnating for a significant portion of the house buying set. For a segment of the population, incomes really are soaring. There are people working in tech, there are successful salespeople, there are successful businessmen, and there's a whole lot of assortive mating by earning potential, meaning that if you've got an $80k salary, there's a pretty good chance your spouse does, too ...

Long story short, if you're not in the segment of the economy that's booming, don't hold your breath regarding housing affordability. Your best shot at owning land is the old old fashioned way (as in, medieval old fashioned): inherit it from your land-owning parents, and then squabble with your siblings about what to do with it."

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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