Amazon and Blue Origin founder Jeff Bezos flew to suborbital space and back on Tuesday. His journey follows Virgin Records founder Richard Branson’s space trip last week. But what do these billionaire space joyrides have to do with real estate? A lot, if this trend truly takes off, real estate experts say.
The hub locations for aerospace giants such as Elon Musk’s SpaceX and Bezos’ Blue Origin could drive average median real estate prices as they attract job growth and higher incomes.
“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’s 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, located in Cameron County, Texas, and founded in 2002, plans to transport passengers to Mars by 2024. It also has a launchpad in Santa Barbara County, Calif. Bezos’ Blue Origin was founded in 2000 and conducted its first flight in 2006 from its Van Horn, Texas, launch site in Culbertson County. These companies also use Kennedy Space Center and Cape Canaveral Space Force Station in Brevard County, Fla. Both companies are actively hiring.
Musk issued an open invitation in March to anyone interested in joining the SpaceX team and noted the area is “expected to grow by several thousand over the next year or two,” as reported by FOX Business.
Virgin Galactic, which also offers suborbital spaceflights, is located at the Mojave Air and Space Port in Kern County, Calif., and Spaceport America in Sierra County, N.M. Virgin Galactic completed its first fully crewed test flight last week with founder Branson.
To what extent can space rides affect the local real estate prices in these areas? In Cameron and Santa Barbara counties, home prices have climbed 51% and 108%, respectively, between 2000 and 2020, according to the Federal Housing Finance Agency’s housing price index map. In Sierra County, N.M., and Kern County, Calif., real estate prices have surged 80% and 114%, respectively, between 2000 and 2020. In Brevard County, Fla., prices are up 128% in that time period.
Yun told Fox Business that there could be a long-term benefit to local housing markets because of these space companies’ hubs, particularly on smaller communities that may have an easier time building more homes to meet higher demand. But price growth likely would be tempered even as demand increases, he said.
Daryl Fairweather, Redfin’s chief economist, agreed, telling Fox Business that the abundance of land surrounding these space company hubs will likely allow home prices to stay relatively stable even as the population of high-income earners increases. “More land means there’s room to add housing stock, which will temper price growth,” Fairweather says.