The booming technology industry is making thousands of Silicon Valley residents very rich, but not in the way you’d expect. While billion-dollar buyouts are making investors and engineers wealthy, many of Silicon Valley’s recent millionaires have made their fortunes purely through property.
With salaries on the rise throughout the entire San Francisco Bay Area, houses in top Silicon Valley towns are selling for millions of dollars. Even a modest home in Mountain View of less than 1,000 square feet can cost upwards of $1 million.
It’s the hidden boom of Silicon Valley – the property boom. Despite housing prices declining in the UK in the wake of the financial crisis, property prices have risen in Silicon Valley as technology companies take part in billion-dollar IPOs and venture capital rounds.
The cost of a home in Mountain View – home of technology giant Google – has more than doubled in the last ten years, climbing from just $500,000 to over $1 million on average. Even modest homes routinely break the seven-figure sales price mark.
The rising costs have made it difficult for people outside the technology industry to move to Silicon Valley. Numerous employees at non-tech local firms are commuting in from elsewhere in the Bay Area, or instead moving their families to cities further away from the technology epicentre.
Economists fear that the rise in house prices is indicative of another dot-com boom and impending bust reminiscent of the 2000 bubble. At the peak of the previous dot-com boom, houses in Silicon Valley routinely sold for seven and eight-figure sums.
For now, residents of the San Francisco Bay Area have to deal with rising property prices on two fronts – the massive increase in the cost of living for the entire Silicon Valley region, and a surge in property prices throughout San Francisco.
