There’s no doubt that when a large company moves into a new area it can be a boon for the local economy of not only that specific municipality, but many of the surrounding communities as well. One of the prime examples is, of course Silicon Valley, situated snuggly in the San Francisco Bay Area. Home to Stanford University, the area is known to attract top talent and has, since the 1970s, been a breeding ground for tech companies both large and small. And the overall success of the area’s economy and housing market has been inextricably linked to the rise and fall of those companies.
Presently, with some of the most well-known companies in the world headquartered in Silicon Valley, property values have skyrocketed. In fact, the median price of a single-family home in the Bay Area as of the end of June 2017 was $962,000. Yes – nearly $1 million. More specifically, San Mateo, CA was leading the pack with a median single-family price of $1.45million while Solano rounded out the bottom at a “measly” $412,000.
So, if an area that’s always been a hub for growth can maintain such high development and property values (not to mention a staggering cost of living), then how does an established company moving into a new area affect the local economy? Let’s take a look!
Kansas City, MO
Right now, Kansas City is trying to position itself as “America’s Most Entrepreneurial City,” which is a pretty lofty goal when you consider – well, just about every other city in the country. But they might just have the chops to back it up. With new accelerators moving into town and a few established companies searching for new roots, Kansas City is attracting a lot of top talent which is having a massive, direct, effect on their economy and housing market.
To say that the housing market in Kansas City is “booming” would be an understatement. Homes are being listed on one day and selling the next, sometimes for tens of thousands of dollars over the asking price. Offers are being put in, sight unseen, and some buyers are even creating promotional videos of themselves to try and sway a seller to choose their offer over another. Homeowners who are interested in selling are hesitating to put their homes on the market because they’re afraid they won’t find a home to purchase quickly enough.
Housing booms like in Kansas City are, of course, amazing opportunities for real estate investors – and is one of the reasons that Amazon’s HQ2 heading to the Metro Washington, D.C. area would be fantastic news for the local community. When communities face a shortage of existing housing, investors of all kinds – land developers and fix and flippers – are able to move in and work as quickly as they can to right the ship. Each property that they add to the area’s inventory is almost guaranteed to be a “win” in terms of taking home a respectable – if not downright hefty – return.
Interested in seeing if Walnut Street Finance is the right investment partner for you? Get in touch.