How the Immigration Ban Could Impact the Silicon Valley Housing Market
On January 27, the executive order banned citizens of seven majority-Muslim countries from entering the US and now over 100,000 visas have been revoked. Now potential buyers are beginning to have second thoughts about buying real estate in the Bay Area and the Silicon Valley housing market may suffer because of it.
Why does this ban specifically threaten the success of the Silicon Valley housing market is largely because the tech industry brings workers into the U.S. and the visa program benefits the market. Companies in the area are nervous that the number of people allowed to come in on the H-1B visas is going to be cut. The H-1B visas allow U.S. employers to temporarily employ foreign workers in specialty occupations.
According to NBC Bay Area, “But, it turns out, that it’s not just tech companies that might be affected. If tech companies have fewer people to hire from other countries, those potential employees will, among other things, buy fewer homes, and we’re already starting to see that fear affect the market.”
Nina Hatvany, a luxury realtor with Pacific Union International, sold more homes than any other agent in San Francisco last year. Hatvany told Business Insider that she frequently takes on clients who are originally from countries outside of the U.S.
“I often have conversations, ‘Is this a good place to put my money?’ Absent earthquakes, it is,” Hatvany said. “[The San Francisco Bay Area] has certainly shown tremendous appreciation, and it’s a wonderful place to live. … If people start to worry about whether they’re going to be able to get into the country when they come home from vacation, that could change.”
According to Business Insider, the Silicon Valley housing market may be negatively impacted by the immigration ban, “One ripple effect of the Trump administration’s policies might be a downturn in the Bay Area’s housing market. Karen Yang, a real estate agent with Fling Yang & Associates, says that if H-1B visa holders (a type of visa that allows US companies to bring in foreign professionals with specialized skills) disappear from the marketplace, a sudden lack of competition could drive down the price of a single-family home in the city.”
The Register reported they interviewed an Apple staffer who suggested that if visas are going to be revoked, people will lose more than their jobs, “Right now house prices in Silicon Valley are insanely high – supported largely by tech jobs – but if enough people have to sell quickly, he was concerned he wouldn’t be able to sell his house and break even, let alone make a profit. A flood of properties on the market will drive down prices, it is feared.”
However, there are some who believe that there are not enough workers in the technological sphere to have a big impact on the real estate market.
According to Randall Kostick, CEO of San Francisco real estate company Zephyr, “Our market place is suffering from a severe shortage of properties for sale and there are MANY more buyers than sellers. Even if we doubled the number of homes available, there would continue to be buyers interested in purchasing them.”