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Techies driving up housing costs?

Posted by Scott Van Voorhis February 6, 2014 11:29 AM

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Just call it the housing market's geek factor.

Trulia takes a look at ten tech hubs across the country, including Middlesex County, home to both Cambridge and the Route 128 beltway.

Homes on average cost 82 percent more in tech hubs than in other metro areas without large constellations of technology companies, Trulia finds.

In fact, we are No. 4 when it comes to price per square foot, weighing in at $223, behind only San Jose (a crazy $410 psf), Seattle and San Francisco.

Nearly half the homes for in Middlesex County, or 49 percent, are no longer affordable to middle class families pulling down the area's median salary.

At least we are not as bad as San Francisco, where only 14 percent of middle class families can afford the average home, or San Jose, where that number is a still pathetic 31 percent.

For what it's worth, Trulia's survey also notes that many of today's tech hubs were expensive before the Internet took off - they were already attracting the affluent and highly skilled by virtue of top universities and other lures.

Still, that is neither here nor here if I am home buyer with a respectable salary but unable to get any traction, whether it's the suburbs of Boston or in Silicon Valley.

That said,  housing construction - or lack thereof - may be the critical factor here.

Raleigh and Austin are also tech hubs, but their housing costs are half that of Middlesex County.

Why's that? A lot more condos and homes are getting built in those markets, with the construction rate five times higher in Austin and ten times higher in Raleigh compared to Middlesex County, not to mention San Jose, San Francisco and Seattle, according to Trulia.

In San Francisco, there is growing tension over the role major tech giants like Google have been playing in the escalation of housing prices there.

Activists have taken to demonstrating at city bus stops to protest Google's use of local routes to ferry workers back and forth in nicely appointed, private buses.

Could we see the same thing here? If our housing costs double again to reach San Jose levels, then all bets are off.

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

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

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