Homes.com New Tech City Index 2016
Homes.com New Tech City Index 2016
$58.8 billion was invested in the US through venture capital in 2015, making it the biggest benefactor of this investment type in the world. That money was invested in everything from financial services to biomedical research. A substantial portion of the money was also invested in America’s world leading technology sector.
While Silicon Valley still dominates the technology landscape when it comes to American investment statistics, emerging cities all over the country are also getting in on the action and creating opportunities for millions of Americans. The Homes.com New Tech City Index ranks these emerging cities based on a number of metrics including industry wages, employment levels, and average house price (see below for full calculation).
So, where is the best American city to live for tech professionals?
1. Denver, CO
The mile-high city has a reputation as a haven for parks and animals, with the city even owning its own buffalo herd. However, it also tops our rankings as the best place to live if you’re a tech professional.
Data from the US census last year also revealed that the state of Colorado is the second most educated in the country with 90% residents attaining a high school diploma and 38% earning at least a bachelor’s degree in higher education. This highly educated workforce has created a great environment for the tech industry to thrive. Tanner McGraw, CEO of Apto agrees: “We were once headquartered in Houston but we opened a Denver office in mid-2014 and found the tech talent to be nothing less than top-notch. Denver has since become the company’s focus for growth in both technology development and sales.”
Average tech wage: $91,861.66
Tech jobs per 1000 employees: 3.8
Average total employment: 5058.0
Average house price: $486,500
House price change (5 Years): +41.29%
Companies based there: Oracle, Sitrion, Jeppesen
Despite a population of under 70,000, Massachusetts’ 15th most populous city has been earning a reputation as a new tech hub. This is largely thanks to companies such as Bose and CA Technologies basing their global headquarters in the west of the city. The town ranks second in the index but the state of Massachusetts actually beats Colorado as the most educated state in the country.
Average tech wage: $106,850
Tech jobs per 1000 employees: 6.7
Average total employment: 1086.7
Average house price: $432,415
House price change (5 Years): +16.68%
Companies based there: Bose, Genzyme, CA Technologies
3. Oakland, CA
As a neighbor to Silicon Valley and San Francisco, Oakland is well placed to kick-start a career in the tech industry. The city was ranked as having the fourth most culturally diverse city in the country and has a thriving arts and nightlife scene that is perfect for young professionals.
Average tech wage: $100,305
Tech jobs per 1000 employees: 3
Average total employment: 3046.7
Average house price: $534,817
House price change (5 Years): +47.61%
Companies based there: Ask.com, BrightSource Energy, Turnitin
4. Atlanta, GA
Famously the home of Coca Cola, Georgia has more recently been recognized as a tech hotspot with the development of the city’s Technology Square which includes the Georgia Institute of Technology, The Advanced Technology Development Center and soon the 20 storey headquarters of NCR. Only last week, Atlanta Mayor Kasim Reed signed a 20-year deal with Delta Airlines which included plans for an airport expansion. The future looks bright for Atlanta.
Average tech wage: $91,996.66
Tech jobs per 1000 employees: 3
Average total employment: 7273.3
Average house price: $276,650
House price change (5 Years): +15.97%
Companies based there: Cox Enterprises, NCR, NASCO
5. Boston, MA
Like second placed Framingham, Boston benefits from the high educational standards in Massachusetts, but also from its relationship with other powerhouses on the East Coast. Cristina Callahan, Marketing Manager at Streetwise Media, believes there are a number of factors that have helped the city’s tech industry develop: “VC attention, favorable policies at the state and local levels, and desirable livability standards have all helped in various ways, as have local success stories. HubSpot in Boston, for instance, has helped to attract talent and interest for an expanding marketing tech sector.”
Average tech wage: $99,766.7
Tech jobs per 1000 employees: 4.2
Average total employment: 7,466
Average house price: $530,333
House price change (5 Years): +14.84%
Companies based there: Cambashi, SatCon Technology Corporation, SofTech
Outside the top five, here’s who else made it into the top 20 of our New Tech Cities Index:
- Austin, TX
- Santa Ana, CA
- Baltimore, MD
- Durham, NC
- Boulder, CO
- Columbus, OH
- Trenton, NJ
- Newark, NJ
- Bridgeport, CT
- Minneapolis, MN
- Huntsville, AL
- Charlotte, NC
- Raleigh, NC
- Bethesda, MD
- Wilmington, DE
How We Did It
The Homes.com New Tech City Index uses a number of factors to help inform our calculations. First, we analyzed data from the US Bureau of Labor Statistics, including the average wage of all job types in 365 cities across the country, the average total employed in each area, and the average number of jobs per 1000 for each job type.
Six jobs were selected as a snapshot of the tech industry: Computer and Information Systems Manager, Computer Programmer, Software Developer, App Hardware Engineer, Network Support Specialist, Web Developer. The median wage from all of these positions was calculated for each city and ranked appropriately. We then did the same with the average number of these jobs for every 1000 jobs in each city as well as the overall average total employment. We then combined the rankings in each category to get overall ranking for each city.
From this, we were served with a top 20 ranking of cities for tech jobs. In order to create a clearer picture of new and emerging tech cities, we excluded data from large, established tech areas including San Jose, San Francisco, Washington, New York and Seattle.
Although job availability and salary are important factors to consider when choosing an area to live and work, there are other factors to consider too. To give an insight into how the tech industry can affect the housing market, we also analyzed average house price over the past five months (taken from our own listings) and house price change over the past five years (data from the Federal Housing Finance Agency).
While these metrics were used primarily as a ranking factor, we were also able to analyze the effect a high concentration of tech jobs can have on a housing market. As the map above shows, while relatively isolated enclaves of tech industry like Seattle or Austin often create a high concentration of jobs, this can also lead to inflated house prices. House price increase is undoubtedly a positive sign for those looking to invest but could also indicate a volatile housing market. Additionally, smaller more competitive markets like the city of Oakland, have seen a great increase in house price but didn’t rate so well with affordability.
When looking at average house price for the index, we favorably ranked cities with a currently low average house prices. So, the city with the lowest average house price over the past five months was ranked highest, in this case, Columbus. When looking at house price increase, we favorably ranked those that had seen the most positive growth over the past five years. In this case, with a rise of 47.61% in the past five years.
With three separate rankings now for each city (jobs, average house price, house price change), we were able to create an overall average position and therefore, an overall ranking in the Homes.com New Tech Cities Index 2016.
What Do The Results Mean?
To understand what these results mean for those looking for the perfect tech job city, we spoke to Homes.com’s Grant Simmons:
“These results are exciting for tech professionals looking to move away from the traditionally tech-centric locations where home prices don’t parallel salaries. With tech companies setting up shop in these new cities across the country, professionals don’t have to choose between the job of their dreams and the home of their dreams. It’s possible, in Denver for example, to get a great job and invest in a 3 or 4 bedroom home that’s likely to increase in value, whereas the same money in the Bay Area will have you living in a truck in the Google parking lot. As the tech landscape expands, so do opportunities for people all over the country.”
Do you work in the tech industry? Looking for a move? Let us know what you think about the Homes.com New Tech Cities Index 2016 on Twitter @HomesDotCom!