Tech workers boost Silicon Beach home prices, rent
LOS ANGELES (AP) – Tech workers flocking to Southern California’s Silicon Beach are driving already-high home prices and rents even higher.
As companies like Google and Facebook set up shop in neighborhoods west of the 405 freeway, their employees have helped push the area’s median home price to $952,500 last quarter, up 19.2 percent from a year ago and above pre-recession highs, the Los Angeles Times reported Saturday.
At its peak, the median home price in neighborhoods stretching from Santa Monica south to Marina del Rey was $925,000 in the second quarter of 2007, before falling to $694,000 in the first three months of 2010, according to research firm DataQuick.
Real estate agents say tech workers are fueling the rise in prices in Venice and surrounding neighborhoods even as housing prices elsewhere in Southern California remain far below their peak during the housing bubble.
“They have the money to buy,” said Tami Pardee, principal of Pardee Properties in Venice, adding that about 30 percent of her buyers work in the tech industry. “We’re excited but cautious.”
The surge in real estate comes two years after Google opened a campus in Venice, leasing three buildings for hundreds of workers. Facebook and Microsoft also have offices nearby, and many tech workers are employed by smaller startups drawn by the relaxed environment and the beach, which offer a marked change of pace from Northern California’s cutthroat Silicon Valley.
Bobby Murphy, the 25-year-old founder of Snapchat, bought a new two-bedroom house in Venice just blocks from the startup’s headquarters this week for $2.1 million, nearly double the median price of neighborhood homes.
And apartment rents are also on the rise, the newspaper reported. The average rent on the Westside was $2,401 a month in the third quarter, up 5.3 percent from a year ago and nearly 20 percent from its low during the recession, according to commercial real estate brokerage Marcus & Millichap.
The trend has some long-time residents worried that the eclectic vibe in Venice might be eclipsed by techie newcomers.
“We want Venice to remain Venice,” said 35-year-old resident Briana Chalais. “We don’t want to be overtaken by all tech people.”
The effect isn’t as pronounced as in San Francisco, where young, affluent workers at companies such as Google, Apple, Facebook and Twitter have driven up real estate prices. That’s partly because Silicon Beach is still relatively small and many people work for little-known startups.
But trendy restaurants and boutiques have moved into Westside neighborhoods, hoping to ride the tech wave.
“This whole place has become like another office for Silicon Beach,” said 27-year-old Matt Semler, who works at the Toms retail store and coffee shop in Venice.
The growing tech scene has priced even some techies out of the neighborhood.
Jerry Jao, co-founder of Santa Monica startup Retention Science, said he wanted to buy a condo but decided to stay in his rented three-bedroom apartment with two-roommates.
“Prices have gone up too much,” he said. “Everything on the Westside is too ridiculous.”