If you live in a booming technology hub like the Bay Area, Seattle, or Austin, you’re more connected to the tech industry — even if you don’t work in it — than you realize. Here are a few reasons why:
- Supply and Demand: As more tech sector employees move to the area, the demand for housing increases, potentially driving up home values.
- Technology Wealth Generation: Technology income and compensation, such as RSUs and stock options, will likely be used to purchase homes in the area, now and in the future. This tech-driven demand can significantly influence the value of your home.
- Nuanced Outlook: Understanding the correlation between the technology industry and local real estate is crucial. For non-tech residents, the value of your home may rise and fall with the financial health of the tech industry. For tech employees, it’s essential to diversify if most of your wealth is tied to your company or the tech sector.
If you own real estate in a similar part of the country, you’re indirectly investing in the technology industry. Recognizing this connection can help you make more informed decisions as a non-tech resident or technology-sector employee. We often help clients navigate the dynamics of real estate and financial planning. Want to learn more about optimizing your long-term planning related to real estate and other areas? Take our quick assessment to evaluate your current position, challenges, and goals to determine how we can best support you.
Audio Transcript:
Erin Whalen (00:07):
If you own real estate in the Bay Area, do you have more tech exposure than you know? I’m Erin Whalen of Opus Wealth Management. Our home is where we live often, where we raise our family, and it’s clearly more than just a financial asset. But if you live in a tech hub like the Bay Area, the Seattle area, or Austin as an example, you can clearly see the correlation between the value of our homes and the health of tech stocks. Supply and demand is what determines prices for homes just like any other asset. And you have factors, demographics, you have movements from state to state, but the Bay Area is very unique in that companies are hiring people that are creating demand for housing. As they’re moving into the Bay Area, they’re being compensated in RSUs or company stock that’s generating the wealth that will likely be the next buyer of your home in the future. So whether or not you work for a tech company, if you live in the Bay, you own a tech stock and it’s really important. Therefore, when you’re doing long-term planning and thinking about retirement, that you’re thinking about your home in this more nuanced way and thinking about the exposures that you have with real estate, your income if you work in technology. So you’re making effective decisions as you’re looking into the future.
Written by: Erin Whalen, Co-president
Disclaimer: Case Studies are provided for illustrative purposes only to provide an example of the firm’s client base, process, and methodology. The experiences portrayed herein are not representative of all firm clients. Other individual outcomes may vary based on their individual circumstances, and there can be no assurance that the firm will be able to achieve similar results in comparable situations. No portion of this case study is to be interpreted as a testimonial or endorsement of the firm’s financial and investment advisory services. Client tax situations are unique and specific, and you are encouraged to consult a tax professional to analyze your specific situation. This material has been prepared for informational purposes only, and is not intended to provide tax, legal or accounting advice; nothing contained in these materials should be taken as such. The opinions expressed in this article are not intended to provide specific advice or recommendations for any individual or on any specific tax strategy or security. The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Opes Wealth Management cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Advisory services are only offered to clients or prospective clients where Opes Wealth Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Opes unless a client service agreement is in place.
