MReport July 2019

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48 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Strong on STEM A recent study spotlighted the best housing markets for buyers pursuing STEM careers. T he AEI Housing Center recently spotlighted the Dallas-Fort Worth (DFW) area as the best metro in the nation for home- buyers hoping to break into the science, technology, engineering, and math (STEM). To rank the top-30 STEM metros, the AEI Housing Center started with the 30 metros with the highest number STEM jobs in 2018. It then took into account two other important factors: total employment growth of any type since 1990 and relative affordabil- ity for first-time buyers (FTB). The report found the DFW area to have a STEM workforce of 250,000, which is more than Seattle and San Jose, California. Overall employment growth in DFW grew 77% since 1990—more than double the national average of 33%. Home affordability in DFW was among the 10 best in the nation. "A vibrant new home con- struction sector helps Dallas-Fort Worth maintain both a high rate of employment growth and FTB affordability," the report states. "New construction sales accounted for 24.6% of all home sales in [Q 4 2018], well above the national rate of 11.2%. For the entry-level home segment, the new construction share was 15.1%, also well above the 6.2% rate for the national entry-level home segment." Fellow Lone Star State cities Houston and Austin joined Dallas, at No. 2 and 4, respectively. Affordability was a key fac- tor responsible for Texas cities ranking highly on the list. A recent LendingTree report found Houston and Dallas to be among the most affordable markets for middle-class families. Other markets included in the LendingTree top 10 were Atlanta; Chicago; Phoenix; Charlotte, North Carolina; Washington, D.C.; Columbus, Ohio; and Seattle. The report also found that five of the worst markets for STEM careers were in California. Los Angeles was rated as the worst market in the nation for those seeking STEM careers. Although ranked highly in total STEM jobs with nearly 360,000, overall employment has grown just 10% since 1990 and it is among the most expensive market in the nation. Sacramento was tied with Los Angeles for the worst market for STEM careers, as its STEM work- force totaled just 71,000. Taking Stock Will a surge in IPOs of San Francisco based businesses impact home affordability? A new report by Trulia states that expecta- tions of the housing market in San Francis- co based on the projected boom of IPOs are overstated and will only reinforce existing trends. "In particular, despite being centered on San Francisco instead of Silicon Valley, its impact is still likely to diffuse throughout the broader Bay Area. Rather than breaking with the past, the current wave of IPOs is likely to reinforce existing trends: undu- lating but maintained pressure on the gas pedal, not an abrupt kickdown," the report states. Companies such as Lyft, Uber, Pinterest, Slack, and Zoom, among others, are expected to release IPOs, which have fueled large ex- pectations on the housing market. The New York Times reported on the expected boom, saying, "even conservative estimates predict hundreds of billions of dollars will flood into town in the new year." Trulia reports that the estimat- ed value of the anticipated IPOs is around $200 billion, and could add another 10,000-15,000 workers to the San Francisco Bay Area. Despite more money and work- ers, Trulia anticipated that the San Francisco housing market will remain steady. The report stated that only a fraction of the employ- ees receive wealth from the IPO and that, as of 2017, only 17% of the Uber shares were in the hands of the employees. "If we conservatively take 25% of $200 billion to be employees' share, we arrive at a $50 billion figure, but that too is an over- estimate of the employees' likely windfall in the wake of the offer- ings," the report stated. Another reason why estimates are overstated, according to Trulia, is that many of the homebuyers benefiting from the IPOs will seek homes outside the city. It states the "immediate housing impact" will extend in all directions: south along the San Francisco Peninsula, north to Marion County and east past Oakland and Berkeley. The secondary impact of the IPO boom will extend farther, "dif- fusing the housing component for the IPO windall" throughout the Bay Area. "A vibrant new home construction sector helps Dallas-Fort Worth maintain both a high rate of employment growth and FTB affordability."

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