The job growth and presumably high incomes at aerospace giants like Elon Musk's SpaceX and Jeff Bezos' Blue Origin have the potential to boost average median real estate prices around their hub locations in the South and West regions over the long term, according to the National Association of Realtors.
"If say a large tech company decided to open another headquarters with high-income jobs, then the local area will experience a sizable growth in home prices," NAR chief economist Lawrence Yun told FOX Business. "Given that SpaceX and Blue Origin employees have sophisticated high-tech skills with presumably high income, the impacted small community real estate market will clearly benefit."
SpaceX, founded in 2002, broke ground in Cameron County, Texas on its Boca Chica launch site in September 2014, according to Space.com. By April 2019, the Brownsville, Texas-based facility began testing for the company's Starship vehicle, which is looking to transport passengers to Mars as early as 2024. SpaceX has also leased a launch pad at Vandenberg Air Force Base in Santa Barbara County, California.
Blue Origin, founded in 2000, conducted the first flight test of its New Shepard program from its Van Horn, Texas-based Launch Site One facility in Culberson County in November 2006. Blue Origin is slated for its first crewed mission on July 20 with Bezos himself on board.
Other sites utilized by SpaceX and Blue Origin in recent years include Kennedy Space Center and Cape Canaveral Space Force Station in Brevard County, Florida.
SpaceX's website currently has over 100 temporary and full-time job openings located in Brownsville, 28 full-time job openings in Vandenberg and 38 full-time and temporary openings in Cape Canaveral. Musk issued an open invitation in March to anyone interested in joining the SpaceX team down in the Lone Star state, noting that the area is "expected to grow by several thousand over the next year or two." Blue Origin has 55 openings in Merritt Island, Florida and 12 openings in Van Horn, Texas.
|SPCE||VIRGIN GALACTIC HOLDINGS INC.||7.12||+0.12||+1.79%|
Virgin Galactic, founded in 2004, has also ramped up testing for suborbital spaceflight at Mojave Air and Space Port in Kern County, California, which officially became designated as a spaceport that same year, and Spaceport America in Sierra County, New Mexico, which conducted its first official launch in September 2006.
Virgin Galactic completed its first fully-crewed test flight, dubbed Unity 22, on Sunday, with founder Richard Branson on board. The company has nearly 100 job openings in Mojave, California and 35 openings in Las Cruces, New Mexico.
The Census Bureau, which tracks housing prices dating back to 1963, notes that the average median sale price for single-family homes in 1990 were $99,000 in the South and $147,500 in the West. By 2000, those average median sale prices rose to $148,000 and $196,400, respectively. Fast forward to 2020, and the average median sale prices reached $299,000 in the South and $412,600 in the West.
According to NAR's 2021 median home price map, Cameron County has a median home price of $96,055, up 4% year-over-year, Santa Barbara County median home price of $630,442, down 1.7% year-over-year, Brevard County has a median home price of $252,790, up 7.9% year-over-year, Sierra County has a median home price of $125,677, up 4.5% year-over-year and Kern County has a median home price of $261,394, up 9.8% year-over-year.
The Federal Housing Finance Agency's housing price index map shows Cameron County and Santa Barbara County real estate prices increased 51% and 108% between 2000 and 2020, respectively, and 5% and 2.1% between 2019 and 2020. As for Sierra County, New Mexico and Kern County, California, the map shows real estate price increases of 80% and 114%, respectively, between 2000 and 2020, and increases of 12.2% and 6.1% between 2019 and 2020. Meanwhile, Brevard County, Florida has increased 128% between 2000 and 2020 and 6.4% between 2019 and 2020.
While the FHFA's map does not provide data for Culberson County, the Census Bureau notes that its median property value was $32,500 in 2000. As of 2021, Culberson County has a median home price of $67,135, according to NAR, an 11.7% year-over-year increase.
Though Yun acknowledges the potential long-term benefits of space companies hubs on their local housing markets, he emphasized that those smaller communities have an easier time building homes and meeting increased demand, unlike bigger cities.
"Therefore, home prices in the local area will not necessarily experience a sudden surge, even as homebuilders construct more homes of large and expensive kind in the outlying areas," Yun said.
Redfin chief economist Daryl Fairweather told FOX Business that the abundance of land surrounding the SpaceX, Virgin Galactic and Blue Origin hubs will likely allow home prices to stay relatively stable even as the population of high earners around them grows.
"More land means there's room to add housing stock, which will temper price growth," Fairweather said.
The unadjusted median sale price for houses sold in the U.S. currently stands at $347,500 as of the first quarter of 2021, just below its record high of $358,700 in the previous quarter, according to data shared by the St. Louis Federal Reserve.