Boston has a storied place in American history, and that’s understandable given that the city is nearly 400 years old. Yet Boston has become a high tech hub rivaling Silicon Valley, and it is even managing to attract satellite offices for Silicon Valley and ecommerce firms. There are several reasons for this, and we’ll address each in detail.
Real Estate Costs
Boston real estate is cheaper than San Francisco and New York, though affordability is a relative concept. The average listed Boston area home costs roughly 600,000 dollars. However, home prices vary significantly. For example, the median house in Roxbury costs a third of the list price of one in Chinatown and half that of a home in Downtown Boston. You can find single family properties and spacious condos for 400K if you hunt for it. This is why Boston stands out from New York state and California for its relative affordability; nearly all of the most unaffordable housing markets in the country are in those two states. It also makes Boston real estate cheap compared to other major East Coast cities.
Why aren’t Boston homes considered unaffordable? After all, the median home in the US costs just over 200K. This is because property prices are high in the Boston area, but so are median incomes. This means you can find relatively affordable homes in Boston if you search for them, and this includes single family homes and condos in walkable communities. Talk to a Jamaica Plain real estate expert to find decently priced single family homes in walking distance of amenities and public transit instead of assuming you have to drive to the suburbs to find the home of your dreams.
More importantly, the Boston housing market is incredibly stable. Prices have been flat, growing perhaps one percent a year. This is much more attractive to startups than the San Francisco area where rents and property prices appreciate by double digits with the risk of a crash when the next tech bubble bursts. Tech startups and their employees can find properties that won’t force them to move in a couple of years because of price increases.
One of the biggest reasons Boston has become a big tech hub is MIT or the Massachusetts Institute of Technology. It is one of the best tech schools in the country, and its graduates start many high tech startups. Other tech firms have offices here to tap into this incredible talent pool. More importantly, they can tap into a broader talent pool than just the STEM graduates. For example, Harvard University is in Boston, too. Boston has also long been a major business and finance hub, creating the legal and financial framework for almost any new business.
Boston’s cost of living is 50 percent above the U.S. average, though it is only 20 percent higher if you factor out the high cost of real estate. And there are many willing to pay this premium because of the city’s infrastructure and amenities. For example, the city offers much more than a wealth of historical sites that attract a steady stream of tourists. Many come here for the world-class hospitals and multiple top tier universities. Boston also stands out for its walkable neighborhoods and excellent public transit. The average walk score for downtown is an amazing 97; you can live and work here without a car. You can also bike or take a bus. That makes it ideal for Millennials and tech firms that want to offer lower pay and a better quality of life for new college graduates.