The EV Tech Industry Is Boosting Real Estate in Secondary Cities in the U.S.

The EV technology (electric / hybrid vehicles) industry is growing in strength in the United States. Electric vehicle sales are growing faster than standard vehicles through to the creation of charging stations for electric vehicles in the first half of 2021, and investors are increasingly investing their money in exchange-traded EV funds or ETFs – indices of companies that sell electric, hybrid or autonomous vehicles manufacture or the batteries these cars need.

And as EV tech companies grow, real estate in many regions of the United States is benefiting from the influx of new technicians and local economic growth. Beyond Silicon Valley, there are emerging electric vehicle technology hubs in cities like Austin, Texas, Pittsburgh, Detroit, and Phoenix. Brokers in these cities say growing EV tech companies building warehouses in their areas have helped boost the property market as increased demand drives prices up and the pace of sales accelerates. They assume that the industry in their regions will continue to exert a strong influence on the real estate market in the months and years to come, as companies are supported in offering the special products and services that are in demand by tech employees.

“New STEM [science, technology, engineering and mathematics] Jobs are usually found in areas where many people are already moving because they are hiring many people in growing industries, ”said Danielle Hale, chief economist at realtor.com. “Even in a world where many people work remotely, they still like to be drawn to areas that offer maximum employment opportunities, especially in relatively affordable tech centers like Austin.”

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In the greater Austin area, for example, Tesla founder Elon Musk is building a system for cybertrucks – the company’s first electric pickup – and is moving to the Texan capital himself. The city has had a booming tech industry for some time, and the growing EV industry continues to drive demand for real estate.

“This has had a significant impact on the real estate industry,” said Jacob Sudhoff, CEO of the Texas Region at Douglas Elliman.

“It’s like a gold rush in a way. People from California and the West Coast, New York and Chicago are all moving to Silicon Hills and the Austin area, ”said Sudhoff, using the nickname for the hilly area of ​​West Austin that is full of tech companies. “With the move in of Tesla, many other companies follow, as many companies are needed to support them [for the employees]. “

Known as the home of America’s auto industry, Detroit is now also emerging as a hub for EV technology, with large auto companies shifting towards electrical and EV-specific companies trying to capitalize on the city’s engineering talent.

“Ford and GM are coming out with great EV technology, and we’re also seeing new tech and battery companies moving into metropolitan Detroit,” said Doug Hardy of Signature Sotheby’s International Realty in Detroit.

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These newcomers are being drawn into an already strong market that saw home sales jump 16.8% in June and median home prices up 21.6% compared to June last year.

Real estate experts believe the growing electric vehicle industry will help fuel pre-existing market trends, competition, and prices in the coming months – especially as many of the new tech hires come from more expensive housing markets and are willing to spend more.

“Overall, the market is already competitive, with low inventory levels and high demand driving prices up,” said Chris Dickson, president of Piatt Sotheby’s International Realty in Pittsburgh. “Since these new buyers are from less affordable areas, they’re more likely to drive prices up.”

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How EV technology is driving real estate in the US

As the EV tech industry penetrates cities like Austin, Pittsburgh, and Phoenix, a common theme is that the influx of employees – many of whom are relocating from more expensive areas of the country – is driving house prices soaring.

“Because Texas is still cheap compared to California, people come in and bid on houses well above the asking price,” said Sudhoff. “Houses wanted to ask twice as much in certain price ranges – we’ve never seen anything like it.”

Another exacerbation of price hikes in the Austin area is a housing shortage, which is also driving up rents.

Low inventory levels have also fueled competition in the Detroit area, which is home to at least nine large EV-related companies, according to analysis by three major EV ETFs from Mansion Global and the Dow Jones Market Data team. Such companies bring in new tech talent, and the city will host an EV tech expo in September.

“Last year people spent an enormous amount of time at home and decided they wanted something with a bigger yard and office space, so we saw a lot of people moving in,” said Mr. Hardy in Detroit. “Inventory is now low and clean, renovated new homes appear to be selling with almost no time in the market. We listed homes for $ 2 million and received five offers in two days. ”

Pittsburgh, home to four major EV technology companies, including centuries-old manufacturing company Westinghouse, is also known for its large number of EV charging stations, and new tech workers are already entering a new city. – Competitive housing market.

“We see a lot of young, well-educated employees from high-cost areas and they are thrilled to have a beautiful home for them to buy,” said Dickson of Pittsburgh. “The overall market was fiercely contested anyway, with low stocks and high demand, which drove prices up.”

In Phoenix, which is also home to at least four large electric vehicle-related companies, a major challenge is the low supply of new development properties that tech buyers tend to want.

“The demand for new homes has never been higher, but we have under-built in our market for more than a decade so it will be a while before we catch up,” said Dub Dellis, chief operating officer at Walt Danley Christie’s International Real Estate in Phoenix. “We have an increase in inquiries for [homes with] two offices, large flexible areas and ultra-high-speed or gigabit internet service. ”

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Outlook for buyers in these cities

The new buyers who flood these markets come with high expectations. As technicians from expensive cities, they prioritize properties with smart home functions and luxurious surfaces. This drives up demand and prices at the high end, so luxury buyers should prepare for the competition.

“For people from the tech industry who come from the west coast, expectations of the surface level and the quality of the architecture are much higher,” said Sudhoff. “People are paying for these features, and the price increase has been an amazing thing.”

Typically, real estate markets start to cool off this fall, but that may not be the case this year as the pandemic has turned normal routines upside down.

“The housing market is more balanced than last year, but that doesn’t mean it will be easy for buyers. There is limited inventory and a decent number of buyers in the market, ”said Ms. Hale of realtor.com. “Buyers may be competing with one or two buyers instead of ten others, so it’s still competitive, but not as much as summer or spring.” (Mansion Global is owned by Dow Jones. Both Dow Jones and realtor.com are owned by News Corp. .)

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Buyers should expect particularly strong competition for larger apartments with space for several workplaces. Properties that require very few upgrades are in particularly high demand across markets, with some buyers willing to pay extra for fully furnished homes.

“It’s an instant gratification real estate market,” said Mr. Hardy. “If the house needs painting or the bathroom needs upgrading, buyers prefer not to spend the month doing it.”

Flexibility is key for buyers looking to stand out from the hustle and bustle in these electric vehicle powered markets, and some are making unusual offers to lure sellers in.

“We’ve seen people skip inspections,” Hardy said, “or offer the owners a free rental to stay in after a few months just to make it more attractive.”

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source https://www.bisayanews.com/2021/09/17/the-ev-tech-industry-is-boosting-real-estate-in-secondary-cities-in-the-u-s/