Fast-growing, good pay, higher vacancies: Takeaways from new report on Triangle tech scene

Raleigh and Durham are technically two distinct metros, but when combined, they make up one of the strongest technology markets in North America.

That’s one of several takeaways from the new annual report from the prominent, commercial real estate investment firm CBRE.

Raleigh-Durham moved up three spots to No. 16 in CBRE’s 2024 tech talent report, landing between Montreal and San Diego. The report used 13 metrics to gauge an area’s positives, potential, and overall attractiveness for workers and employers alike.

As tech job postings fell nationwide, what boosted the Triangle’s score? And where does the ares still lag behind? Let’s explore.

Young workers incoming

Simply put, the Triangle is growing, particularly among young workers.

Since 2017, Raleigh-Durham’s population has risen 10.8% and 16.8% respectively among residents in their 20s and 30s. Both of these increases ranked in the top five nationally. Charlotte has also experienced top 10 growth among 20-year-olds and 30-year-olds. Overall, the Queen City finished No. 26 in the CBRE report.

Over the past five years, Raleigh-Durham has added 11,400 tech workers, an 18% jump. This includes 1,360 more positions since CBRE’s last report.

Wages going up, but so are rents

Among U.S. markets, Raleigh-Durham technology workers earned the 10th-highest salaries in 2022, CBRE found. The average annual local wage of $106,900 was up from $99,825 in 2021.

Topping CBRE’s wage list was the California Bay Area, where tech talent earned on average $193,000, followed by Seattle at $176,200. Both of these West Coast markets are much more expensive however; average rent for a Triangle apartment is $1,527 a month, CBRE found, compared to $2,930 a month in San Francisco and $2,114 in Seattle.

Still, the Triangle’s average rent has significantly increased. In 2019, CBRE found the average local apartment cost $1,117 a month, 27% lower than today. It could be worse; in Raleigh-Durham, tech workers typically put 15% of their wages toward rent, which is markedly lower than in New York City, where the rent-to-tech wage ratio is 31%.

High concentration of degrees

“Two key characteristics of top tech talent markets are high educational attainment and high concentrations of young people,” CBRE wrote in its 2024 report.

And Raleigh has both. In addition to its growing young population, the city ranked seventh for educational attainment rate with nearly 50% of Raleigh residents 26 years or older holding at least a bachelor’s degree. Only Washington D.C., the Bay Area, Austin, Boston, Denver and Madison were higher.

However, the Triangle area is producing more technology-related degrees than it is actually hiring tech positions, indicating more local graduates are seeking jobs elsewhere than non-local graduates are coming in.

One of the most gender diverse markets (but still a big gap)

The technology sector is disproportionately white, Asian, and male.

On gender representation, Raleigh-Durham’s tech workforce is among the most diverse. The area ranked third among large North American markets with 28.6% of its local tech talent being female. This compares to women holding 48% of all local office jobs, a 20% gulf that trails only Washington D.C. and Ottawa in terms of narrowness.

The local percentage of female tech workers remained unchanged since 2019.

As in the U.S. overall, Raleigh-Durham’s tech workforce is mostly white (54%) and Asian (28%). Around 10% of area tech workers are Black, in line with the national average. Only 4% of Triangle tech jobs are held by Latinos, which lags the U.S. average of 8.6%.

Office vacancies go up... and so do rents

Office vacancy rates continue to creep higher in the Triangle, CBRE reports, with nearly 19% of office space empty at the end of last year. This is compared to a vacancy rate of 12.7% in 2019.

“High-tech industry office leasing remains well below pre-pandemic levels,” CBRE wrote, adding “as hybrid work arrangements become more common, tech employers have been reconsidering their office space strategy.”

Despite elevated vacancy rates, rent for Triangle office space continues to rise. At the end of 2023, the average asking price for a square footage of space was $33.28, up from $30.93 the year prior when local vacancy rates were only 15.9%.

Overall, Raleigh-Durham’s asking price for office rent ranks as the 14th-highest in North America.

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