For IT professionals looking for the perfect home without the high price tag, LinkedIn and Redfin have teamed up to help out with a new report. According to their analysis, the two top city-contenders for software engineers were Charlotte, North Carolina and Buffalo, New York. A strong 4.1 percent year-over-year job growth in the tech field combined with affordable housing prices makes these locations an attractive option for young, educated workers.
Career networking site LinkedIn contributed data on job growth and median income while real estate platform provider Redfin offered up their expertise on property prices to the report. After crunching numbers using the rule that housing should cost less than 30 percent of an individual's gross income, it showed the average developer would spend 18.9 percent (Charlotte) and 13.3 percent (Buffalo) of their annual income on their homes. For example, an IT professional making a median income of $80,000 in Charlotte, NC, can purchase their own home for $269,000. In comparison, a similar home in San Francisco sells for $1.4 million and remains beyond the reach of engineers with a median salary of $186,300.
“Because homeownership in expensive places like San Francisco is no longer a realistic consideration even for many people in high-paying fields, smaller inland cities are becoming increasingly attractive to young, educated people looking to build a career and live comfortably,” said Redfin chief economist Daryl Fairweather.
Other mortgage-friendly metropolitan centers with burgeoning tech scenes named were Grand Rapids, MI; Colorado Springs, CO; and Columbus, OH. Grand Rapids came out on top as one of this year's fastest-growing housing markets in the country and offers an array of amenities and cultural attractions for residents to enjoy. Colorado Springs also shines bright as an option with over 300 days of sunshine and its proximity to nature. Additionally, Columbus is currently enjoying its own "mini tech boom" and a newly revitalized downtown center means opportunities to explore the arts and other entertainment activities.
"Grand Rapids and Columbus don't offer many job opportunities or salaries as high as you'd find in San Francisco, but because housing and other costs are so much lower, skilled professionals can achieve a higher quality of life," Fairweather said. "Tech companies are following the talent by opening offices or offering the option for employees to work remotely – which is contributing to growth in job opportunities for people seeking affordable housing."
The methodology used involved an analysis of job growth rates in the IT sector – a minimum threshold was set at 3 percent year-over-year growth for software engineers in January 2019. Total income was calculated using compensation, stock options, bonuses, and RSUs. LinkedIn provided the numbers for this portion of the report.
For real estate costs, Redfin drew on data from sales made in July 2019. They calculated monthly house payments based on a 3.82 percent mortgage interest rate and a 1.125 percent property tax rate and multiplied that amount by twelve to arrive at an annual amount. When gauging affordability, they used the rule that housing must cost less than 30 percent of someone’s annual income to be affordable.