Buyers Should Take a Hard Look at These U.S. Cities Where the Tech Biz Is Booming

Federal funding that will inject hundreds of millions into tech could buoy some U.S. real estate markets. 

In October, the Biden administration selected 31 Tech Hubs across the country, designating them for federal grants to “supercharge” industries including autonomous systems, biotech and quantum computing. 

Chosen from more than 400 applicants, the winners will split a $500 million federal funding pot. The Biden Administration launched the program in May as part of its 2022 CHIPS and Science Act, which was aimed at bolstering domestic research and industry. 

Though details of the program are still developing, “the Tech Hub initiative will be a net positive from a real estate point of view,” said Jerry Mooty Jr., CEO and principal of @properties Christie’s International Real Estate in Dallas, where Southern Methodist University will lead a semiconductor Tech Hub across Texas and Oklahoma.

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Dallas

Though prices in
Dallas
have jumped 4.7% year over year, according to October data from Realtor.com, “there is absolutely room for more price escalation,” Mooty said. “By 2100, Dallas is expected to be one of the nation’s three largest cities. Housing inventory is at historic lows. Luxury properties, especially, are moving very quickly.” 

Dallas had already attracted startups and tech businesses for the same reasons as cities like Houston and Austin have, Mooty said—“lower cost of living and no state income tax. Every time we pick up the paper, another company has moved here from California or Seattle.” As central Dallas gets saturated, growth may push northward to metro-Dallas areas like Frisco, Prosper and Salina, Mooty said.

Roxann Taylor, partner at Engel & Völkers Dallas Southlake, agreed. “The Tech Hub initiative will be very, very positive. And in terms of both prices and space, there is plenty of room for growth—the Dallas-Fort Worth Metroplex is just short of 10,000 square miles,” she said. The market’s most sought-after homes are in downtown neighborhoods like Preston Hollow, Highland Park and University Park.

University Park’s $3.7 million median home price in October makes it Dallas’s most expensive enclave. “But there’s still a lot getting built in the suburbs, where you can buy a new home for $400,000.”

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Bozeman, Montana

The market in tiny Bozeman also stands to benefit from its Tech Hub status in laser technology and robotics—even though a pandemic population boom has already sparked stratospheric jumps in property prices. 

“The Tech Hub designation is all positive, and I’m very bullish on Bozeman,” said Andy Holloran, owner and founder of developer HomeBase Partners, whose downtown Bozeman luxury-residential projects include the Henry condominiums and One 11 Lofts. 

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Bozeman had already become a hot spot for remote workers during the pandemic, driving up both its net population and property prices, said Holloran. One report estimated that 2.22 people moved into Bozeman for every person who left in 2022.

“Tech people have more flexibility in where they live, and they’re choosing more remote places like Bozeman with access to talent, a growing university, strong air access and world-class outdoor amenities,” Holloran said. “Programs like the Tech Hub will keep making us more noticeable in markets that don’t know Bozeman already, and help us attract and retain talent.” 

In October, the median home price in Bozeman reached $889,000, according to Realtor.com; prices climb to eight figures in developments like Triple Tree and Eagle Rock Reserve. 

Still, “the gloves are off as far as growth goes here, and the Tech Hub will only increase things,” according to Joy Vance, an agent at the Agency in Bozeman. “We’re in a huge valley floor with the ability to grow upward. Downtown Bozeman can grow outward. Ten years ago, people said prices in Bozeman were getting crazy. They say the same now, and they’ll say the same thing in 15 years.”

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South Florida

Even in South Florida, where a mushrooming tech and investment scene has led to triple-digit home-price increases in some areas, “the Tech Hub designation signals even more growth,” said Jordan Lederman, who leads The Lederman Group | Fortune Christie’s International Real Estate in Miami Beach. “We’ve already seen tons of CEOs and employees of tech startups move here, and we have the infrastructure in place to accommodate more.” The Miami Dade County Innovation and Economic Development Office will lead the South Florida Climate Resilience Tech Hub.

While “everything has gone up” in the Miami-Dade corridor, Lederman expects suburban areas like Pinecrest, Miami Shores and Coral Gables to explode as high-paid transplants seek housing near downtown Miami’s Brickell financial district. “But a lot of luxury buyers still want to live near the beach, so [South Beach’s] South of Fifth district, the Venetian Islands in Biscayne Bay, Palm Isle and Hibiscus Island are more sought-after than ever.”

In the wake of the pandemic, prices in Miami “basically doubled,” said Julian Johnston, an agent with the Corcoran Group in Miami Beach. “Tech firms of all sizes were already moving here, and Covid was the kicker. … It’s not about people finding jobs. It’s about the white-collar jobs moving here with people who can afford $5 million to $15 million homes.” 

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Some of those newcomers are from the San Francisco Bay Area or other West Coast tech hubs facing affordability and quality-of-life concerns, Johnston added.

Single-family houses “will be in big demand for the next few years, and prices will go up even more once we get a rate cut sometime in 2024,” he said.

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Denver

In Denver, home to a thriving startup culture, the quantum-computing Tech Hub designation for the Denver-Aurora corridor could also benefit the luxury market, according to Robert Tait, an agent at Engel & Völkers Downing Street Group. “It definitely sounds like a positive for us,” he said. “A lot of tech professionals are paid very well.”

With an October median home listing price of $599,999, Denver’s market has not reached the stratosphere of some other tech-forward cities. “But some areas are starting to pop at $1,000 per square foot,” Tait said. “We are inventory-constrained, and will be for at least a decade.” 

Areas including Washington Park, Platte Park and Golden tend to attract luxury buyers, he said, “though our luxury price points start at $1.1 million, so we’re not Dallas. We don’t have a lot of $5-million-plus sales.” Lower-profile neighborhoods like Littleton, Parker, South Broadway/Englewood and Sheridan are “surrounded by gentrification and ready to pop,” Tait said. “If someone came in here for big-scale development, they’d make a killing.”

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