Sunday, May 24, 2015

"Silicon Valley is no longer just the place talented people move to; it's the place those people are moving from"

Glenn Kelman

Said : Glenn Kelman, CEO of Redfin, a leading real estate website, in a commentary on - Soaring housing costs forces talent to flee Silicon Valley - published in CNBC on 21 May 2015. 

According to Kelman, "IT folks are leaving Silicon Valley, mostly because they can't afford to stay. For the first time ever, the median price for a Silicon Valley home just exceeded $1 million. That's about double what it is in other tech cities, like Boston or Seattle, and triple what it is in aspiring technology hubs, like Portland, Denver or Austin."

Kemlin, quoting, writes : "Silicon Valley engineers earn nearly 50 percent more than their Boston counterparts; in Seattle that difference is smaller, but still significant, at 12 percent. Nowhere is the pay difference large enough to offset the cost of housing."

According to Kemlin, Silicon Valley commercial rents are nearly double what they would be in Denver or Portland, and 50 percent higher than Austin or Seattle. For a 100-person office, the difference works out to be $400,000 a year. This is equivalent to about 2 percent of the total operating expenses in a typical software company which runs on 15 percent margins.

Readers' comments :

A reader 'Patriotoo' makes an interesing observation "Sadly, even Stanford has been corrupted by Silicon Valley, now just a trade school with students and faculty focused mostly on their widget startup or sitting on SV boards for faculty as well." "WA and OR already suffer for the earlier exodus of Californians to those states," noted another reader Don Iverson. Lacityterr remarked : "There is no more room in Silicon Valley and they are all moving down here to Los Angeles. Rents are skyrocketing in the city of LA. They are building housing like crazy in downtown. The entire west side of town has been taken over by the tech industry. In 10 years LA will be as unaffordable as the bay area. I am glad I bought my house when I did."

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