Silicon Valley Techies Ditch Pricey Bay Area, Head South To Buy Mansions, Pied-A-Terres For Less
LOS ANGELES (CBS/AP) – With Bay Area home prices skyrocketing and a shortage of supply, Silicon Valley techies are flying south and buying mega mansions and pied-a-terres at a fraction of the price.
Internet moguls like Amazon's Jeff Bezos aren't the only techies snatching up real estate in Southern California. The city has become increasingly appealing to a trove of angel investors and startup entrepreneurs as well.
The new buyers are drawn to the city for a mix of personal, financial and work-related reasons. Los Angeles offers a growing tech scene, warmer weather and more space for less money.
"We've seen an uptick in buyers from the technology industry over the last several years -- some moving to Los Angeles and some buying second homes here, as a kind of peaceful retreat," Charles Black, executive vice president of marketing and strategic development at Hilton & Hyland, said.
The Los Angeles-Long Beach region broke into the top five metro areas by venture capital investment for the first time in 2014. There were 171 deals totaling $2.05 billion, according to National Venture Capital Association.
Some of the most high profile purchases in recent years include Bezos' $24.5 million Beverly Hills compound. Sean Parker, co-founder of Napster and an early leader at Facebook, purchased Ellen DeGeneres' Holmby Hills mansion for $55 million. Swedish tech billionaire Markus Persson, the creator of "Minecraft," topped them both when he spent $70 million for a Beverly Hills mansion fitted with a $200,000 candy room.
But the purchases of the uber rich only tell half the tale.
Entrepreneur and investor Justin Yoshimura, 25, is one example: While he primarily lives in San Francisco, he recently purchased a $2.04 million three-bedroom, three-bath home in Santa Monica that he now spends weekends in.
"Compared to San Francisco in particular, it's very cheap," he told the newspaper. "I have a yard with a pool and a beautiful home for less than what I would pay for an equivalent-sized condo in San Francisco."
Real estate agent Tami Pardee says tech buyers from Silicon Valley make up about 10 percent of her current clients. Their budget, even at a smaller scale, is high: anywhere from $2 million to $5 million for a home.
"They're buying second homes -- or third or fourth homes," she said. "We're seeing it a lot."
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