One of the most attractive features for any real estate location is job market growth. While many industries are experiencing job market growth, none compare to the growth of the STEM – science, technology, engineering, and math – field. How does the strength of tech jobs influence real estate market trends? Is there a relationship between the best cities for tech jobs and the top cities to invest in real estate? Keep reading to find out!
Tech Jobs and Real Estate
Generally speaking, any type of job market growth increases population growth, which in turn translates into real estate market growth. This simple rule is what makes the best cities for tech jobs among some of the best cities to invest in real estate.
The STEM job field is growing at a tremendous rate, which further enhances the top cities to invest in real estate. For instance, according to a report by the PwC, STEM jobs are expected to grow 76 percent faster than the rest of the job market through 2026. This makes the best places for tech jobs highly valuable locations for real estate investing in the long-term.
What are the best cities for tech jobs that are among the best cities to invest in real estate? These cities are Denver, CO, Nashville, TN, New York, NY, Raleigh, NC, San Diego, CA, and Washington, DC. These 6 cities are among the top 30 hottest real estate markets to watch, according to the same PwC report. Five of them are among the top 18, and 4 are placed in the top 10. Here is the data for each market, provided by Mashvisor’s investment property calculator:
Denver, CO
- Median Property Price: $469,960
- Price Per Square Foot: $275
Traditional
- Rental Income: $1,952
- Cap Rate / Cash on Cash Return: 2%
The first of the best cities for tech jobs and real estate is Denver. As is a common theme with most of the cities on this list, Denver’s real estate market trends include high profitability and moderate property prices, which are above the national average. Along with the city’s population growth and real estate market growth comes tech job growth. Denver’s growth in tech jobs was about 82 percent from 2017 to 2018, according to the Business Insider.
Nashville, TN
- Median Property Price: $405,269
- Price Per Square Foot: $4,441
Traditional
- Rental Income: $1,773
- Cap Rate / Cash on Cash Return: 2%
The PwC report named the Nashville housing market as the fifth top market to watch for 2019. It is also the most affordable city on this list. Not only is the Nashville market one of the best places for tech jobs, but it is also one of the top cities to invest in real estate in the entire country. Many factors influence Nashville’s success. With a growth rate of 114 percent from 2016 to 2017, it’s fair to say that the city’s tech industry is one of these factors.
New York, NY
- Median Property Price: $1,123,783
- Price Per Square Foot: $1,269
Traditional
- Rental Income: $3,143
- Cap Rate / Cash on Cash Return: 1%
Next up on the list is the New York City real estate market. Also known as “Silicon Alley,” NYC is home to over 120,000 tech employees who earned an average salary of $129,000 in 2017. This salary is higher than that of the other best cities for tech jobs on this list. Despite its high earnings and great status, it is understandable, given the city’s median property prices, why investors might be turned off from investing in rental properties in NYC. However, investors can easily focus on finding affordable properties in the Big Apple. All they have to do is use Mashvisor’s Heatmap, which you can learn more about by clicking here!
Raleigh, NC
- Median Property Price: $425,912
- Price Per Square Foot: $1,076
Traditional
- Rental Income: $1,505
- Cap Rate / Cash on Cash Return: 1%
Among the 6 cities on this list, the Raleigh housing market is expected to be the best place to invest in real estate. The PwC report ranks it as the third best market to watch. It is also one of the best cities for tech jobs, with analytics firms being some of the top employers in the city. As part of the Research Triangle, Raleigh’s tech industry is expected to grow by 7.2 percent between 2016 and 2020.
San Diego, CA
- Median Property Price: $789,627
- Price Per Square Foot: $503
Traditional
- Rental Income: $2,723
- Cap Rate / Cash on Cash Return: 1%
San Diego is one of the best cities for tech jobs within its state and in the entire country. The former says a lot, considering California is home to Silicon Valley. Named as the best place for startups in 2014 by Forbes, San Diego is well-known for its tech industry. The city is home to over 400 biotechnology companies and many wireless manufacturers. Despite its expensive median property price, San Diego is one of the best Californian cities for investing in rental properties.
Washington, DC
- Median Property Price: $653,580
- Price Per Square Foot: $537
Traditional
- Rental Income: $2,647
- Cap Rate / Cash on Cash Return: 2%
The last of the best cities for tech jobs and top cities to invest in real estate is Washington, DC. The nation’s capital is home to over 20 internet technology software companies, among other tech companies. The average tech worker’s salary in 2017 in Washington, DC was $116,000, ranking as one of the highest in the US and the world. The city is also projected to be one of the hottest real estate markets for investing in rental properties in 2019.
Many of the best places for tech jobs are also some of the top cities to invest in real estate. This is no coincidence, as strong tech markets attract many to these cities. To learn more about where to invest in real estate, including places that are not limited to the best cities for tech jobs, click here to start your 14-day free trial with Mashvisor!