Personal Finance

Best Cities for Software Developers

Best Cities for Software Developers

Tech is one of the hottest job markets in America. If you're a current or soon-to-be software developer, you'll want to take a look at our analysis of the top locales for America's tech professionals based on regional job markets, median income and local home values.
Best Cities for Software Engineers
Best Cities for Software Engineers Source: Getty Images

Our study ranked urban locations from across the United States based on several key characteristics, including salary information and real estate data. According to data provided by the U.S. Bureau of Labor Statistics, the average annual income for a software developer in the United States was $81,083 per year. This includes salary information for systems, applications, and web developers, as well as programmers.

List of Top 5 Cities for Software Developers

We present our findings of the best cities for tech jobs below. Also included are our rankings of the top cities for tech salaries; cities with the fastest-growing property values; most affordable cities to buy a home in, relative to the average software developer's salary; and our full list of rankings, which includes data from 318 cities and MSAs. Finally, we conclude by outlining the methodology we used for this study.

Best Cities for Software Developers

We scored the best cities for software developers by evaluating seven key variables, including income levels, housing data and economic strength. While every city demonstrated unique strengths and weaknesses, the results were viewed holistically and ranked on the basis of best overall score. The top scoring cities and metropolitan statistical areas (MSA) are shown below.

Rank
Location
Rating
Average Income
1Denver, CO82.5$100,010
2Seattle, WA82.2$118,528
3Phoenix, AZ80.7$90,753
4Atlanta, GA80.3$93,400
5Colorado Springs, CO80.2$99,485

1. Denver, Colorado

The Denver-Aurora-Lakewood MSA ranked as the best region for software developers in the country, thanks to high local demand for developer jobs, generous salaries and a hot real estate market. Denver proved to be an excellent destination for tech professionals, with average salaries offered in the six-figure range. Median home values in the area also spiked by over 42% over the past five years and continue to grow.

The greater Denver metropolitan area demonstrated a solid demand for developers and healthy economic performance, as burgeoning tech companies priced out of Silicon Valley continue to move in. While Denver achieved mediocre results for affordability due to rapidly rising home prices, it still proved significantly cheaper than the hottest tech locales, outranking San Francisco, Seattle and Los Angeles on this front.

2. Seattle, Washington

The Seattle-Tacoma-Bellevue MSA ranked second in our study of best cities for software developers. Helping it earn its title were the exceptional demand for tech jobs and healthy economic base. The region also featured the second highest median salary for software developers in the country, thanks to its insatiable demand for tech professionals.

Seattle is the biggest city in Washington State and boasts the highest average salary for developers outside of Silicon Valley. Median salaries for programmers, applications developers and systems developers all easily cleared the six-figure range, with only web designers clocking in at at $96,390. While local home prices certainly aren't cheap, at a median price of $399,000, it's still an excellent option for software developers looking to settle in a tech mecca.

3. Phoenix, Arizona

The Phoenix-Mesa-Scottsdale MSA ranked third in our study of best cities for software developers. The MSA performed respectably in six out of seven of our grading categories. Worth noting is the high availability of home vacancies for sale in Scottsdale, AZ, despite a 53% spike in home prices over the past five years. Couple this with a healthy economy, strong demand for software developers and a respectable median wage, and Phoenix may yet have room to grow as a budding tech hub.

This MSA demonstrated both the highest rate of growth in median home values, as well as the lowest property taxes among our top five cities for software developers. These factors, combined with the high local supply of homes for sale, makes this an excellent place for tech professionals to settle. The median home in the greater Phoenix area costs $238,000, almost a third of the median property value in San Francisco.

4. Atlanta, Georgia

The only MSA in our top five located outside the west, the Atlanta-Sandy Springs-Roswell area is a budding hive for tech magnets. The city is buoyed by a strong economy, business-friendly environment and growing demand for tech professionals. The local presence of colleges like Georgia Tech and Emory also serve as hubs for tech companies seeking to recruit fresh talent. Thanks to soaring home prices in the west, both established and startup tech companies have already started relocating to Atlanta.

The greater Atlanta region is also the most affordable place to buy a home among our top five cities for software developers, and it hasn't suffered from the same rabid growth in home prices that plagued some of its western cohorts. Home values in this MSA rose a respectable 23% between 2013 and 2018; this, coupled with a high supply of homes for sale at reasonable prices, means that it might be a good time for tech professionals to consider moving to Georgia before home prices shoot the moon.

5. Colorado Springs, Colorado

Rounding out our top five cities for software developers is the city of Colorado Springs. While smaller than its compatriots, Colorado Springs benefits from low property taxes, high demand for software jobs and a median developer salary that falls just under six figures at $99,485. Health fanatics and families alike will also be happy to learn that Colorado Springs ranked the third most health-conscious city in the country, based on a separate ValuePenguin study.

Colorado Springs boasted the lowest property tax rates of any of our top five picks and also featured the second highest demand for software developers, with a location quotient of 1.58, outranking Denver at 1.49. Tech professionals will find both job stability and affordable housing in this western tech haven, while avoiding the crowds of the big cities.

Where Software Developers Earn the Most and Least

Below is a list of the five cities where software developers were paid the most. Labor data from the BLS show that median annual salaries for developers in the United States varied between $54,000 and $122,000. Tech professionals in each of the regions below earned over $100,000 a year.

Highest Tech Salaries

Rank
Location
Annual Mean Wage
1San Francisco, CA$122,643
2Seattle, WA$118,528
3San Jose, CA$118,268
4Battle Creek, MI$117,610
5Sherman, TX$108,890

Software developer jobs in each of the cities below registered average annual salaries of $58,000 or less. Tech professionals in each of the regions below were paid salaries over 25% below the national average for software developers.

Lowest Tech Salaries

Rank
Location
Annual Mean Wage
318Prescott, AZ$53,893
317Daphne, AL$55,970
316Myrtle Beach, SC$56,000
315Bowling Green, KY$57,035
314Missoula, MT$57,293

Cities with the Fastest-Rising and Declining Property Values

A good way to gauge the health of a city is to evaluate the growth of its real estate market. Between 2013 and 2018, median home values in the following five regions reflected the fastest growth, with property values rising by at least 58% or more. Perhaps unsurprisingly, every city listed in our top five hailed from California.

Fastest-Rising Property Values

Rank
Location
2013 Median Home Value
2018 Median Home Value
5-Year Change
1Napa, CA$368,062$624,58870%
2Santa Rosa, CA$349,968$580,40766%
3Modesto, CA$159,510$259,54663%
4Stockton, CA$185,381$296,27460%
5Santa Cruz, CA$459,169$728,33659%

For the same 2013-2018 period, median home values in each of the following regions exhibited flat or negative growth. All of the cities with declining property values were classified as "small cities" with total populations of under 250,000 and dropping.

Fastest-Declining Property Values

Rank
Location
2013 Median Home Value
2018 Median Home Value
5-Year Change
318East Stroudsburg, PA$203,765$178,424-12%
317Vineland, NJ$173,552$164,338-5%
316Lewiston, ME$159,077$153,841-3%
315Carson City, NV$210,111$203,565-3%
314Sheboygan, WI$156,577$153,199-2%

Most and Least Affordable Cities for Software Developers

A high salary, while attractive, can be offset by high costs of living. To compensate for differences in income, we looked at locations according to how affordable they were based on local salaries. Mortgage payments in the following MSAs can cost as little as 5% of the average developer's monthly income. We compared median home values with median developer salaries in each area.

Most Affordable Cities

Rank
Location
Monthly Mortgage Payment
Average Developer Income
Home Affordability Ratio
1Battle Creek, MI$459$117,6104.7%
2Brownsville, TX$373$84,2705.3%
3Sumter, SC$465$92,2406.0%
4Sherman, TX$556$108,8906.1%
5Albany, GA$479$92,6306.2%

Monthly mortgage cost equals principal and interest for a 30-year loan at 5% with a 20% down payment on the local median home value.

The median monthly mortgage payment in each of the five regions below required 39% or more of the average local developer's monthly salary. Corresponding down payments in each of the areas easily topped six-figures, ranging from $113,000 to $180,000, while average monthly payments ranged from $2,400 to $3,800. Needless to say, you might be better off renting in these MSAs.

Least Affordable Cities

Rank
Location
Monthly Mortgage Payment
Average Developer Income
Home Affordability Ratio
318Honolulu, HI$2,949$78,80345%
317Kahului, HI$2,570$75,11041%
316Santa Cruz, CA$3,128$93,40040%
315San Luis Obispo, CA$2,441$74,53839%
314San Jose, CA$3,854$118,26839%

Monthly mortgage cost equals principal and interest for a 30-year loan at 5% with a 20% down payment on the local median home value.

Full List of Cities

In our analysis of the best cities for Software Developers, we reviewed all major metropolitan areas with available housing and income data. This allowed us to process data from 318 cities and MSAs across the United States.

Rank
Location
Overall Rating
Average Income
1Denver-Aurora-Lakewood, CO82.4$100,010
2Seattle-Tacoma-Bellevue, WA82.1$118,528
3Phoenix-Mesa-Scottsdale, AZ80.7$90,753
4Atlanta-Sandy Springs-Roswell, GA80.3$93,400
5Colorado Springs, CO80.1$99,485
6San Jose-Sunnyvale-Santa Clara, CA79.9$118,268
7San Francisco-Oakland-Hayward, CA79.1$122,643
8Salt Lake City, UT79.1$89,480
9Provo-Orem, UT78.7$88,763
10Huntsville, AL78.0$94,870
11Napa, CA77.9$96,757
12Boulder, CO77.6$97,728
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Methodology

We looked at 318 cities and MSAs across the United States. Each city was analyzed and scored across seven variables to obtain an overall rating. Each entry was then ranked according to magnitude, and the top scores were recorded above.

Large, medium and small cities are defined as regions with populations of over 500,000, 250,000 to 500,000, or below 250,000, respectively.

The BLS tracks data for programmers, web developers, systems developers and applications developers separately but categorizes them all under the broader term "software developer." For the purpose of this study, individual data points for each sub-profession were either averaged or aggregated under the overall category, Software Developers, to facilitate analysis.

  • Mean Wage: Mean wage contains the average annual salary figures for Software Developers. Locations were ranked by average income. Larger figures received higher scores.
  • Location Quotient: Location quotient reflects the concentration of software developers as a percentage of all occupations in a given area. Higher location quotients indicate a higher density and greater demand for developers. Larger location quotients received higher scores.
  • Value Appreciation The strength of a local real estate market is evaluated based on its rate of growth over the past five years. Higher rates of appreciation received higher scores.
  • Vacancy for Sale: This reflects the percentage of local homes that are available for sale or vacant at any given time. Higher rates indicated more available housing and a higher score.
  • Costs of Ownership: The ratio of property taxes to home value was used to gauge the cost of homeownership. The higher the ratio, the more expenses a homeowner can reasonably expect over time. Regions with higher tax ratios received lower scores.
  • Affordability: Due to differences in real estate markets, it's difficult to measure property values on an absolute basis; we therefore compared median monthly developer salaries with projected mortgage payments based on average local property values. The resulting synthetic debt-to-income measures were then recorded and ranked. Higher ratios received lower scores.
  • Economic Strength: Cities and MSAs with high ratings exhibited high rates of consistent growth over time. We ranked each location in accordance with the economic strength rankings provided by POLICOM Corp.'s 2018 survey on Metropolitan/Micropolitan Economic Strength. Higher ratings received higher scores.

Due to the potential for double-counting, we chose to overweight and underweight certain measures to help fine-tune our findings. For example, a high vacancy-for-sale rate indicates a high supply of properties available to homebuyers, but it can also mean that properties are overpriced or otherwise undesirable. To compensate, we chose to emphasize economic strength scores over vacancy-for-sale numbers.

All employment and salary data was obtained from the Bureau of Labor Statistics, while housing data was obtained from S&P Global Market Intelligence. Cities and MSAs for which occupation or housing data was not available were not considered in our study.