Housing costs barely a blip for Atlanta’s well-paid, 20-something IT pros: CBRE report
By David Pendered
Housing prices are little concern for metro Atlanta’s burgeoning population of young IT professionals who, according to a new report by the real estate firm CBRE, pay an average rent-to-wage ratio of 15 percent. This ratio is less than half the standard measure for an FHA loan.
The report answers the everyday question about pricey new housing developments – who can afford a home priced at $500,000 or more? The answer is – a 20-something IT professional. The average salary in the sector is about $100,000 a year, according to the report.
This market stands in stark contrast to a market segment the Atlanta BeltLine seeks to help with one of its housing affordability programs. The BeltLine’s webpage cites an example that in 2016 enabled homebuyers to: “qualify for assistance of 20 percent of the purchase price of a home up to $45,000.”
For further perspective, the FHA has set the ceiling at 31 percent for housing costs as a proportion of wages. The FHA has set the total debt-to-income ratio at 43 percent.
Housing costs are just one of the region’s trends illuminated in CBRE’s report. A host of other social scenarios includes the male to female patterns in the IT profession (3:1, male to female); and that the city of Atlanta has the fastest growing population of 20-somethings (6th, barely edged by Seattle). Atlanta is the sixth most-concentrated youth city of those tracked by the report.
Of note, the report does not appear to break out any demographic changes that may result from the city’s annexation of the Druid Hills/Emory University area that took effect Jan. 1, 2018.
The purpose of the report is to explore trends that affect the real estate market, which is CBRE’s primary business. To that end, the report observes that the largest real estate play in Atlanta this year in the IT area was 158,200 square feet, for Saleforce, at 950 Paces Ferry Road. That compares to a 755,900-square-foot deal for Facebook at 250 Howard St., San Francisco.
This report is titled, 2019 Scoring Tech Talent: Influencing Innovation, Economic & Real Estate Growth in 50 U.S. & Canadian Markets.
CBRE’s executive leadership sees the IT sector continuing to expand in Atlanta and the region. This report is just the latest of several that point toward ongoing expansion.
Here’s the overview from Christian Devlin, CBRE’s tech and media practice leader in Atlanta:
- “Atlanta’s tech talent and job growth over the past five years has been outstanding. The incredible growth in our tech sector is, first, creating more and more jobs that our tech graduates are likely to select versus moving out of Atlanta for roles with other companies, and, second, resulting in in-migration of tech talent from other major tech hubs.
- “I believe Atlanta’s special blend of a fast-growing base of high-quality tech talent, relatively low cost of doing business and housing, and strength of its educational institutions like Georgia Tech will continue make Atlanta a very compelling place for tech companies to grow and thrive.”
Four areas that CBRE cited as highlights for the Atlanta market include:
- “While Atlanta is ranked in, or near, the Top 10 for most things Teach related, it falls to No. 22 out of the Top 50 markets for estimated costs to run a tech firm. Out of the Top 10 Tech Talent markets, only Toronto can boast lower estimated costs than Atlanta.
- “Atlanta is designated a market with Very High-Tech Labor Quality while also having only Moderate Tech Labor Costs. Similar markets are Denver, Raleigh-Durham, Portland and Chicago.
- “Atlanta is one of the most attractive locations for Tech Talent from a cost of housing perspective, with the average annual rent only representing 15.3 percent of the average annual tech wages. Only Raleigh-Durham can boast a lower ratio from the Top 10 Tech Talent markets.
- “Atlanta’s business friendly environment and high caliber universities attract and retain tech and non-tech companies in the region.”