Migration patterns for high income earners from urban cities

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Migration patterns for high income earners from urban cities

Stella Xu
Rental Property Investor · New York City · Member since 2020 · 3 posts · 14 votes

Hi all - I feel that we're about to see some major migration shifts coming from the expensive urban cities such as NY, Seattle, SF given the new work from home policies that is becoming permanent. It started with the tech sector - twitter, facebook and now other sectors are catching on. I work in the financial services sector in NYC and sense that all the banks/insurance companies etc... are about to do the same because they've seen super high productivity from remote staff over the past few months. they haven't announced it yet but they've implied that they will in a few months. so even after Covid, going into the office will be optional. for most high income earners crowded into the cities - that's a big deal. That means that they no longer have to be tied to a specific city. Some will move to the suburbs but even if 15% of these high income earners were to move elsewhere in the country - that would be a game changer for some of those recipient cities... and it would be good to get ahead of that as investors! I was thinking people will want to move to warm cities in low tax states. the place would also need to have some diversity and fine dining that they're accustomed too. 
->> What cities do you think will benefit from this demographic migration?

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Stella Xu:

Hi all - I feel that we're about to see some major migration shifts coming from the expensive urban cities such as NY, Seattle, SF given the new work from home policies that is becoming permanent. It started with the tech sector - twitter, facebook and now other sectors are catching on. I work in the financial services sector in NYC and sense that all the banks/insurance companies etc... are about to do the same because they've seen super high productivity from remote staff over the past few months. they haven't announced it yet but they've implied that they will in a few months. so even after Covid, going into the office will be optional. for most high income earners crowded into the cities - that's a big deal. That means that they no longer have to be tied to a specific city. Some will move to the suburbs but even if 15% of these high income earners were to move elsewhere in the country - that would be a game changer for some of those recipient cities... and it would be good to get ahead of that as investors! I was thinking people will want to move to warm cities in low tax states. the place would also need to have some diversity and fine dining that they're accustomed too. 
->> What cities do you think will benefit from this demographic migration?

Income tax's are generally owed in the State were your employeed..  IE a lot of folks work in Oregon and live in Washington across the river.. they still pay Oregon income tax.. so thats something to check.

I think folks are going to scatter with the wind.. but seems to me suburbs of NJ  CT  PA would benefit but there is a whole lot of little towns in those areas for folks to scatter.. I would be looking at school districts.

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  • Rick Estacio
    Attorney · Brooklyn, NY · Member since 2020 · 50 posts · 24 votes
    6y

    @Justin Thorpe - I think this is spot on. I’m seeing firms potentially switching to rotations in the office and WFH in the short and possibly long term. It saves the employer money on office leases. Since only 50% of employees are ever in the office at the same time, they only need about 50% of the space. I know of multiple large financial services firms in NYC planning to do this.

    What does this mean for NYC area residential? It means that employees may be willing to live further from the office than they would have previously in order to gain more indoor and outdoor space for less than loving in Manhattan since the time spent commuting for work is cut in half when you’re only going in, for example, every other week. People still need to be close enough that it’s a reasonable commute, but an hour and 30 minute commute from a big house with a pool in the suburbs no longer appears as daunting. Suburban demand and prices in The NYC area went way up during COVID 19 and I expect it to remain this way to some extent.

    For the same reason I also predict an acceleration in the shift that has been happening for 10 plus years from Manhattan to Brooklyn and other boroughs. There are some in the City who as a matter of principle would never leave it and live in suburbia, but the commute was the only thing keeping them tethered to Manhattan and that burden has now been cut down significantly.

    Personally, I’m keeping my place in the City and just bought a second house with a yard near the beach about an hour and 20 minutes from NYC and am contemplating spending a good deal of time there even when I go from 100% WFH to a every other week rotation. I know many others who spent some of their WFH time looking for second houses as well.

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  • Sue Hough
    Developer · Chicago IL · Member since 2019 · 147 posts · 125 votes
    6y

    @Stella Xu  I just posted an article on Bigger Pockets where I dive deep into the changes which we will be seeing in the near future, predominately the migration from Big Cities to Small Towns.   History has shown when we encounter large scale upheaval as a society, people will re-examine many of their values asking questions such as "Am I safe and is my family safe" and "Am I happy and is my family happy".  These personal inquires will result in movement, and I believe the tides are already moving to a more urban lifestyle.

    "Small Town Markets Have Huge Investment Potential in 2020—Here’s Why (& How to Capitalize on It)" https://www.biggerpockets.com/...

    Good luck!

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  • Justin Thorpe
    Member since 2020 · 437 posts · 675 votes
    6y

    I think people will live where they want to live.

    A lot of that has to do with demographics (age, marital status, income, lifestyle). I know of people who work in Manhattan mid-town and live out on the coast.

    In fact long prior to Covid-19 I know of a young couple who moved from an apartment in LES to the Long Island coast because they wanted more suburbia and it fit right in with their lifestyle.

    At the same time millions of youngsters all over the country, I am sorry more likely all over the world would kill to move to SF or NYC for a job and life!!!!! I can’t say the same about most other cities or towns in America with few exceptions of course.

    I know of many people who love living in cities because of proximity to work, nightlife, access to shopping and the less overhead associated with maintaining a large home and owning a few cars. I have personally lived in bustling cities like NYC, SF and London. They come with their own set of pros and cons and can get less comfortable once you have family etc.

    Coming back to Covid-19, I frankly was amused by how brokers (including on BP) 4 - 5 states away from

    SF or NYC got all excited by the remote work trend thinking that they are about to hit gold as these people with deep pockets will now move to their neck of woods. I can tell you that is not going to happen. Sure it may accelerate move to adjoining suburbia but not movement 5 states out unless the ambitious techie or the up and coming banker want to put their careers on the line. Imagine having to show up to the office multiple times a week and taking a 3 hour flight into Sf or NYC just for the work day.

    I think @Amit M. makes the right points. WFH has not EVER been a chosen productivity tool as has been suggested by the OP. Quite the contrary, it has been rejected at many companies due to employee abuse and the inefficiency it creates. So I’d dismiss it as a productivity tool. That said, As a “safety platform” during a pandemic it’s the best and i predict it will thrive as long as the pandemic is not controlled. I know most of us want the pandemic to end, so when it ends, WFH loses value and drop like how a dot com stock lost value during the late 90s. Some parts of it will survive of course!

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  • Joe Bertolino
    Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Jaysen Medhurst:

    @Stella Xu, I'm also in financial services (formerly) based in Manhattan, now based in my spare bedroom. I agree that we're going to see a lot more options for employees to WFH and/or commute less. I strongly disagree with many of the assumptions being made and impacts being predicted, both here on BP and in the press more widely.

    • People are going to live where they want to live. Yes, people are drawn to urban centers for jobs, but they are mostly drawn there for the culture, vitality, education, and the intersectional opportunities of those places. I don't care how cheap Jacksonville is, there's no way you're dragging me down there. This impacts quality of life just as much as cost of living.
    • Don't assume that if you move from SF to Tulsa that big, fat SF salary is moving with you. Facebook has already announced that it will cost adjust salaries for employees that move from the Bay Area to areas with a lower cost of living. I bet this becomes de rigeur across the board.
    • BTW, these areas don't want fat SF salaries coming to their towns. It is a shock to the system and completely skews the economics of the town. The Marketplace podcast "Make Me Smart" had a great exploration of this several weeks ago.
    • There will still be an organizational disadvantage to living outside your company/industry's hub. I see all the people that get promoted to Managing Director at my company each year and the vast majority of them are based in NY or London. Even though those cities only represent a small fraction of where our total workforce is. 
    • There are potential negatives for smaller, cheaper cities where (up until now) many companies were moving jobs. Large companies had struck a kind of bargain with the devil. Due to much lower salaries and fixed costs, they were willing to move jobs to cities like Dallas, Tampa, and Phoenix. The compromise was much shallower talent pools. The numbers made that compromise work, up until now. If the high cost of Manhattan or Silicon Valley office space is off the table, it's to a company's advantage to pay the higher salary of a WFH person in the Bay Area (or Greenwich, CT), if that means appreciably better talent from which to choose. I've already heard rumblings about large companies contracting their footprints in secondary and tertiary cities.

    @Jay Hinrichs, my CPA explained it to me differently. I pay income taxes in NY (where I work), my home state of CT levies income taxes as well, but gives me a credit for what I already have paid in NY. Since NY taxes are higher, I never have to pay anything to CT. Perhaps this is a local thing? NY-NJ-CT have their own system in place?

    As far as scattering, we're seeing exactly what you describe here in Greenwich. My realtor friends are busier than they can remember. The coop where I Iive has had 2X as many closing in the first half of the year than they did in the entirety of 2019. New Canaan home prices are up 29% year-over-year. Darien is seeing the same trends. No surprise that these are the three wealthiest towns in SW CT, with the best schools, and lowest taxes.

    correct if you work in a state with income tax and live in a state with income tax..  Like CA and Oregon.

    But WA has NO income tax.. so if your employed in Oregon you pay tax. 

    If your employed in CA and live in Vegas you Pay CA tax..  etc..  yes migration of those higher end communities / cities in my mind will follow the school systems.

    Funny you mention schools.   Right now I am dealing with a lot of highly educated folks considering relocating from the Bay Area to the sierra foothills or even Tahoe.  They all love the idea of rural living until they get a glimpse of what truly rural schools are like.   When it comes down to it they want to be in a upscale suburb with good schools.  

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Joe Bertolino:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Jaysen Medhurst:

    @Stella Xu, I'm also in financial services (formerly) based in Manhattan, now based in my spare bedroom. I agree that we're going to see a lot more options for employees to WFH and/or commute less. I strongly disagree with many of the assumptions being made and impacts being predicted, both here on BP and in the press more widely.

    • People are going to live where they want to live. Yes, people are drawn to urban centers for jobs, but they are mostly drawn there for the culture, vitality, education, and the intersectional opportunities of those places. I don't care how cheap Jacksonville is, there's no way you're dragging me down there. This impacts quality of life just as much as cost of living.
    • Don't assume that if you move from SF to Tulsa that big, fat SF salary is moving with you. Facebook has already announced that it will cost adjust salaries for employees that move from the Bay Area to areas with a lower cost of living. I bet this becomes de rigeur across the board.
    • BTW, these areas don't want fat SF salaries coming to their towns. It is a shock to the system and completely skews the economics of the town. The Marketplace podcast "Make Me Smart" had a great exploration of this several weeks ago.
    • There will still be an organizational disadvantage to living outside your company/industry's hub. I see all the people that get promoted to Managing Director at my company each year and the vast majority of them are based in NY or London. Even though those cities only represent a small fraction of where our total workforce is. 
    • There are potential negatives for smaller, cheaper cities where (up until now) many companies were moving jobs. Large companies had struck a kind of bargain with the devil. Due to much lower salaries and fixed costs, they were willing to move jobs to cities like Dallas, Tampa, and Phoenix. The compromise was much shallower talent pools. The numbers made that compromise work, up until now. If the high cost of Manhattan or Silicon Valley office space is off the table, it's to a company's advantage to pay the higher salary of a WFH person in the Bay Area (or Greenwich, CT), if that means appreciably better talent from which to choose. I've already heard rumblings about large companies contracting their footprints in secondary and tertiary cities.

    @Jay Hinrichs, my CPA explained it to me differently. I pay income taxes in NY (where I work), my home state of CT levies income taxes as well, but gives me a credit for what I already have paid in NY. Since NY taxes are higher, I never have to pay anything to CT. Perhaps this is a local thing? NY-NJ-CT have their own system in place?

    As far as scattering, we're seeing exactly what you describe here in Greenwich. My realtor friends are busier than they can remember. The coop where I Iive has had 2X as many closing in the first half of the year than they did in the entirety of 2019. New Canaan home prices are up 29% year-over-year. Darien is seeing the same trends. No surprise that these are the three wealthiest towns in SW CT, with the best schools, and lowest taxes.

    correct if you work in a state with income tax and live in a state with income tax..  Like CA and Oregon.

    But WA has NO income tax.. so if your employed in Oregon you pay tax. 

    If your employed in CA and live in Vegas you Pay CA tax..  etc..  yes migration of those higher end communities / cities in my mind will follow the school systems.

    Funny you mention schools.   Right now I am dealing with a lot of highly educated folks considering relocating from the Bay Area to the sierra foothills or even Tahoe.  They all love the idea of rural living until they get a glimpse of what truly rural schools are like.   When it comes down to it they want to be in a upscale suburb with good schools.  

    In the deep south they figured this out decades ago and there are all sorts of Academy's ( private 1 through 12).. along with parochial schools we just don't have much of that on the west coast as there was not a need in many areas.  Going to be interesting to see how education morphs during all this covid..  I mean when they get a vaccine ( I am being positive here LOL) and things kind of go back to normal then what..  ??? 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Amit M.:

    I think the recent work from home hysteria is a fallacy. Conceptually, working from home has NOTHING to due with covid 19. If it’s so awesome, why wasn’t it adapted en mass years ago? Yahoo a couple years back even rolled back WFH. It’s a trend that will have some effect yes, but it’s being way over hyped. For two main reasons: 1- I’m not sure it will really provide long term benefits to the tech firms jumping on the bandwagon now 2- I’m not sure how many employees will ultimately like it, after the forced-Covid-novelty wears off. i.e. it’s hard to get all those cool tech co benefits like free gourmet food, gyms, awesome office spaces, etc., etc. piped over a zoom meeting ;)

    As for WFH effect on the Bay Area, keep in mind that when people work from home, their direct environment becomes MORE, not less important. Would you rather be home based in the Bay Area with tons of things to do nearby, good weather, lots of nature, etc. or someplace with little culture, extreme temperatures, bland immediate environment, etc., etc. There is a reason many people, who can afford to do so, aspire to live in CA and especially the Bay Area. Working from home isn’t going to radically change those aspirations.

    These are great points.. I did a presentation at Google headquarters a few years back.. what the employees have there on campus cannot be understood until you see it live and in person..  And with housing prices where they are at the employees many times are in shared living arrangements because not everyone can afford a 1.5 million starter house in Mountain View.  I talked to one Apple employee a few years back that I met at a turn key event in Indy.. and he lived in Cupertino.. where a 4 bed home had 2 guys sharing each room thats 8 guys in one 1600 sq ft 4 bd rancher.. now its OK if your just basically sleeping.. but if all those guys have to work from home.. Or during the Quarantine..  That does not seem to me to be quality living in Cupertino  LOL..   And if you basically never have to buy food.. ???  When I was at google I saw more than one table with the entire family.. 

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  • Nate Sanow
    I​nvestor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
    6y

    I am partial and perhaps biased to Tulsa, because I live and work here, but one unique thing we have as a city is that we have a $10,000 credit for remote workers to move here.  BMX has recently moved here, Tesla had Tulsa as one of 2 finalist cities before choosing Austin, Google has a smaller plant 45 minutes outside the city in Pryor Creek, OK....and well much more on the upside.  Cost of living is low, but opportunity is still high.  And in my humble opinion, we are a safe bet given that in 2008 & 2020 we have not had the same crash effect of higher unemployment, etc as the rest of the country...we do not appreciate as fast, but we also do not crash as hard.  

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  • Sol Bier
    San Francisco, CA · Member since 2018 · 15 posts · 10 votes
    6y

    As someone who works in tech, I am seeing firsthand the migration out of SF/NYC. Don't underestimate techs companies ability to quickly copy each other for the best talent.

    The future I see for these tech companies/startups is a percentage of employees who are full time remote (20%), as well as more, smaller regional offices combined with HQ in a mega city. This means places like Austin, Denver, Dallas, LA/SD, will do well. Tech companies can take over an area like locusts, so don't underestimate the continued appreciation in these cities even though they are already pricey. 

    I don't think this will mean the demise of NY/SF like many predicted. I see continued, strong growth in these cities as young urban dwellers still want to live in these places the most, and don't have huge salaries/savings to care about the tax savings/QOL differences yet. I see a scenario where small, regional cities will see the strongest growth over the next decade, with the largest urban centers having strong but not as crazy growth as this past decade. Many tech companies will still have HQ in SF/NY, but with a clear career path and policy for "going remote" to other offices, creating a stable pipeline to the suburbs outside these regions as well as satellite offices in tertiary cities. Right now

    As for finance/bank companies? Who knows. My guess is some may relocate to cheaper cities, but they aren't doing it to compete for talent, but to save costs/move to where the CEO wants to live, so the change will be slower if at all. 

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  • Amit M.
    Rental Property Investor · San Francisco, CA · Member since 2013 · 1k+ posts · 1k+ votes
    6y

    @Sol Bier the big difference WRT future appreciation is that the 2nd tier cities and burbs have plenty of space to build out new construction, and S.F. and Manhattan do not. So for the short term S.F./NYC will have flat to mild RE price declines, but 2+ years from now I bet that it will be business as usual, and these prime areas will soar again. In other words, over the next decade I expect another leg up on the chart below:

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  • Sol Bier
    San Francisco, CA · Member since 2018 · 15 posts · 10 votes
    6y
    Originally posted by @Amit M.:

    @Sol Bier the big difference WRT future appreciation is that the 2nd tier cities and burbs have plenty of space to build out new construction, and S.F. and Manhattan do not. So for the short term S.F./NYC will have flat to mild RE price declines, but 2+ years from now I bet that it will be business as usual, and these prime areas will soar again. In other words, over the next decade I expect another leg up on the chart below:

    Agreed on there being more land in places like Phoenix, etc., but you're assuming homebuilding will keep pace with migration trends.

    I do agree the mega cities will be fine long term. Trying to time these cycles are silly, but there is a new opportunity to diversify into tertiary cities which will last a long time.

    The biggest risk I see with mega cities is the continued tenant friendly laws making it harder for new investors 

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  • Jim Paulson
    Boise, ID · Member since 2014 · 121 posts · 73 votes
    6y

    I am seeing a lot of in migration to the Boise, Idaho area.  We have been written up in multiple magazines for over a decade about being a great place to live, great place to raise a family, to be in business for yourself, to retire, to mountain bike, etc.

    It keeps me busy as a Realtor for sure. :)

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  • James CarlsonBusiness Member
    Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes
    6y

    @Stella Xu

    Interesting thread here. Like @Nicholas L., I want to see the data on this migration in big cities like ours in Denver. That said, my gut says this trend is true if maybe a bit overstated. Again, just my gut, but we have more than a few higher-income clients who are looking in the middle suburbs. One set of clients, in particular, stand out. They're Denver people. Love the city. He's a VC, she's a defense consultant. They started their search in the urban areas around LoHi and RiNo, the uber hip areas of downtown Denver, but in the last two months have shifted to the 'burbs just outside of Denver -- Centennial, the nicer parts of southeast Aurora, etc. 

    I don't think we're going to see a gutting of the inner cities or anything. The downtown and immediate surrounding areas in Denver are too awesome, too vibrants with shops and bars and restaurants and with such an imbalance of supply and demand in places like Denver, there will still be plenty of buyers to gobble up homes in the core.

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  • Juan Pardo
    Member since 2020 · 201 posts · 118 votes
    6y
    Originally posted by @Jaysen Medhurst:

    @Stella Xu, I'm also in financial services (formerly) based in Manhattan, now based in my spare bedroom. I agree that we're going to see a lot more options for employees to WFH and/or commute less. I strongly disagree with many of the assumptions being made and impacts being predicted, both here on BP and in the press more widely.

    • People are going to live where they want to live. Yes, people are drawn to urban centers for jobs, but they are mostly drawn there for the culture, vitality, education, and the intersectional opportunities of those places. I don't care how cheap Jacksonville is, there's no way you're dragging me down there. This impacts quality of life just as much as cost of living.
    • Don't assume that if you move from SF to Tulsa that big, fat SF salary is moving with you. Facebook has already announced that it will cost adjust salaries for employees that move from the Bay Area to areas with a lower cost of living. I bet this becomes de rigeur across the board.
    • BTW, these areas don't want fat SF salaries coming to their towns. It is a shock to the system and completely skews the economics of the town. The Marketplace podcast "Make Me Smart" had a great exploration of this several weeks ago.
    • There will still be an organizational disadvantage to living outside your company/industry's hub. I see all the people that get promoted to Managing Director at my company each year and the vast majority of them are based in NY or London. Even though those cities only represent a small fraction of where our total workforce is. 
    • There are potential negatives for smaller, cheaper cities where (up until now) many companies were moving jobs. Large companies had struck a kind of bargain with the devil. Due to much lower salaries and fixed costs, they were willing to move jobs to cities like Dallas, Tampa, and Phoenix. The compromise was much shallower talent pools. The numbers made that compromise work, up until now. If the high cost of Manhattan or Silicon Valley office space is off the table, it's to a company's advantage to pay the higher salary of a WFH person in the Bay Area (or Greenwich, CT), if that means appreciably better talent from which to choose. I've already heard rumblings about large companies contracting their footprints in secondary and tertiary cities.

    @Jay Hinrichs, my CPA explained it to me differently. I pay income taxes in NY (where I work), my home state of CT levies income taxes as well, but gives me a credit for what I already have paid in NY. Since NY taxes are higher, I never have to pay anything to CT. Perhaps this is a local thing? NY-NJ-CT have their own system in place?

    As far as scattering, we're seeing exactly what you describe here in Greenwich. My realtor friends are busier than they can remember. The coop where I Iive has had 2X as many closing in the first half of the year than they did in the entirety of 2019. New Canaan home prices are up 29% year-over-year. Darien is seeing the same trends. No surprise that these are the three wealthiest towns in SW CT, with the best schools, and lowest taxes.

    "Don't assume that if you move from SF to Tulsa that big, fat Ssalary is moving with you. Facebook has already announced that it will cost adjust salaries for employees that move from the Bay Area to areas with a lower cost of living. I bet this becomes de rigeur across the board."


    I don't see why tech companies would pay different salaries for different locations in the same country, if they want to retain the best talent. Their employees will go to work for other companies, their competition actually.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Juan Pardo:
    Originally posted by @Jaysen Medhurst:

    @Stella Xu, I'm also in financial services (formerly) based in Manhattan, now based in my spare bedroom. I agree that we're going to see a lot more options for employees to WFH and/or commute less. I strongly disagree with many of the assumptions being made and impacts being predicted, both here on BP and in the press more widely.

    • People are going to live where they want to live. Yes, people are drawn to urban centers for jobs, but they are mostly drawn there for the culture, vitality, education, and the intersectional opportunities of those places. I don't care how cheap Jacksonville is, there's no way you're dragging me down there. This impacts quality of life just as much as cost of living.
    • Don't assume that if you move from SF to Tulsa that big, fat SF salary is moving with you. Facebook has already announced that it will cost adjust salaries for employees that move from the Bay Area to areas with a lower cost of living. I bet this becomes de rigeur across the board.
    • BTW, these areas don't want fat SF salaries coming to their towns. It is a shock to the system and completely skews the economics of the town. The Marketplace podcast "Make Me Smart" had a great exploration of this several weeks ago.
    • There will still be an organizational disadvantage to living outside your company/industry's hub. I see all the people that get promoted to Managing Director at my company each year and the vast majority of them are based in NY or London. Even though those cities only represent a small fraction of where our total workforce is. 
    • There are potential negatives for smaller, cheaper cities where (up until now) many companies were moving jobs. Large companies had struck a kind of bargain with the devil. Due to much lower salaries and fixed costs, they were willing to move jobs to cities like Dallas, Tampa, and Phoenix. The compromise was much shallower talent pools. The numbers made that compromise work, up until now. If the high cost of Manhattan or Silicon Valley office space is off the table, it's to a company's advantage to pay the higher salary of a WFH person in the Bay Area (or Greenwich, CT), if that means appreciably better talent from which to choose. I've already heard rumblings about large companies contracting their footprints in secondary and tertiary cities.

    @Jay Hinrichs, my CPA explained it to me differently. I pay income taxes in NY (where I work), my home state of CT levies income taxes as well, but gives me a credit for what I already have paid in NY. Since NY taxes are higher, I never have to pay anything to CT. Perhaps this is a local thing? NY-NJ-CT have their own system in place?

    As far as scattering, we're seeing exactly what you describe here in Greenwich. My realtor friends are busier than they can remember. The coop where I Iive has had 2X as many closing in the first half of the year than they did in the entirety of 2019. New Canaan home prices are up 29% year-over-year. Darien is seeing the same trends. No surprise that these are the three wealthiest towns in SW CT, with the best schools, and lowest taxes.

    "Don't assume that if you move from SF to Tulsa that big, fat Ssalary is moving with you. Facebook has already announced that it will cost adjust salaries for employees that move from the Bay Area to areas with a lower cost of living. I bet this becomes de rigeur across the board."


    I don't see why tech companies would pay different salaries for different locations in the same country, if they want to retain the best talent. Their employees will go to work for other companies, their competition actually.

    this has actually been going for years  ( lower salaries outside the bay area in tech..  My Daughter has worked for intel for 18 years ( that makes me old LOL) and when she left Santa Clara for Beaverton/Hillboro  ( oregon campus's) she took a pay cut day one 18 years ago.. it was about 10%.. however with like kind housing and like kind schools to Palo Alto and Cupertino housing was/is 1/4 or less the cost.. food gas all that stuff is roughly the same as CA.. resturants are a little more in Bay Area.. but other than that housing is the major cost differences so 10% pay cut was a no brainer for her.. She bought a 5 bd 4 ba 3,200 sq ft home for under 300k  at the time  3 and 1 1,200 sq ft in south bay or peninsula was just about 1 mil 

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  • Jaysen Medhurst
    Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
    6y

    It makes perfect sense, @Juan Pardo. They pay competitive salaries based on the local cost of living. You can't pay the same salary in SF where the median home price is $1.4MM as you do in Tulsa where the median home price is $130k.

    0Reply
  • Juan Pardo
    Member since 2020 · 201 posts · 118 votes
    6y
    Originally posted by @Jaysen Medhurst:

    It makes perfect sense, @Juan Pardo. They pay competitive salaries based on the local cost of living. You can't pay the same salary in SF where the median home price is $1.4MM as you do in Tulsa where the median home price is $130k.

    In my opinion a salary should be based on the job nature and performance, and not on the location. 

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  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    6y

    @Juan Pardo When you start your own business, you will of course be able to set salaries based strictly on performance, not geography.  That's the beauty of America.    

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  • Steve Morris
    Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    "In my opinion a salary should be based on the job nature and performance"

    Careful, that's a micro-aggression.

    Next thing you know you'll say something stupid like best-qualified person for the job.

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  • Juan Pardo
    Member since 2020 · 201 posts · 118 votes
    6y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Juan Pardo:
    Originally posted by @Jaysen Medhurst:

    @Stella Xu, I'm also in financial services (formerly) based in Manhattan, now based in my spare bedroom. I agree that we're going to see a lot more options for employees to WFH and/or commute less. I strongly disagree with many of the assumptions being made and impacts being predicted, both here on BP and in the press more widely.

    • People are going to live where they want to live. Yes, people are drawn to urban centers for jobs, but they are mostly drawn there for the culture, vitality, education, and the intersectional opportunities of those places. I don't care how cheap Jacksonville is, there's no way you're dragging me down there. This impacts quality of life just as much as cost of living.
    • Don't assume that if you move from SF to Tulsa that big, fat SF salary is moving with you. Facebook has already announced that it will cost adjust salaries for employees that move from the Bay Area to areas with a lower cost of living. I bet this becomes de rigeur across the board.
    • BTW, these areas don't want fat SF salaries coming to their towns. It is a shock to the system and completely skews the economics of the town. The Marketplace podcast "Make Me Smart" had a great exploration of this several weeks ago.
    • There will still be an organizational disadvantage to living outside your company/industry's hub. I see all the people that get promoted to Managing Director at my company each year and the vast majority of them are based in NY or London. Even though those cities only represent a small fraction of where our total workforce is. 
    • There are potential negatives for smaller, cheaper cities where (up until now) many companies were moving jobs. Large companies had struck a kind of bargain with the devil. Due to much lower salaries and fixed costs, they were willing to move jobs to cities like Dallas, Tampa, and Phoenix. The compromise was much shallower talent pools. The numbers made that compromise work, up until now. If the high cost of Manhattan or Silicon Valley office space is off the table, it's to a company's advantage to pay the higher salary of a WFH person in the Bay Area (or Greenwich, CT), if that means appreciably better talent from which to choose. I've already heard rumblings about large companies contracting their footprints in secondary and tertiary cities.

    @Jay Hinrichs, my CPA explained it to me differently. I pay income taxes in NY (where I work), my home state of CT levies income taxes as well, but gives me a credit for what I already have paid in NY. Since NY taxes are higher, I never have to pay anything to CT. Perhaps this is a local thing? NY-NJ-CT have their own system in place?

    As far as scattering, we're seeing exactly what you describe here in Greenwich. My realtor friends are busier than they can remember. The coop where I Iive has had 2X as many closing in the first half of the year than they did in the entirety of 2019. New Canaan home prices are up 29% year-over-year. Darien is seeing the same trends. No surprise that these are the three wealthiest towns in SW CT, with the best schools, and lowest taxes.

    "Don't assume that if you move from SF to Tulsa that big, fat Ssalary is moving with you. Facebook has already announced that it will cost adjust salaries for employees that move from the Bay Area to areas with a lower cost of living. I bet this becomes de rigeur across the board."


    I don't see why tech companies would pay different salaries for different locations in the same country, if they want to retain the best talent. Their employees will go to work for other companies, their competition actually.

    this has actually been going for years  ( lower salaries outside the bay area in tech..  My Daughter has worked for intel for 18 years ( that makes me old LOL) and when she left Santa Clara for Beaverton/Hillboro  ( oregon campus's) she took a pay cut day one 18 years ago.. it was about 10%.. however with like kind housing and like kind schools to Palo Alto and Cupertino housing was/is 1/4 or less the cost.. food gas all that stuff is roughly the same as CA.. resturants are a little more in Bay Area.. but other than that housing is the major cost differences so 10% pay cut was a no brainer for her.. She bought a 5 bd 4 ba 3,200 sq ft home for under 300k  at the time  3 and 1 1,200 sq ft in south bay or peninsula was just about 1 mil 

    Relocating was a very good deal then!

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  • Chelsie Runnings
    Real Estate Agent · Sonoma County · Member since 2016 · 55 posts · 29 votes
    6y

    We have been seeing this in Sonoma County since about April April. We've dubbed it the Urban Flight Syndrome. Many city dwellers have made the jump into Sonoma County taking advantage of the ability to work remotely and use their money to purchase something with more yard space, office space and entertaining space. We are seeing our listings go on the market get multiple offers and seeing our sold v. list price between 94%-105%. We have not seen a slow down, even with our recent wildfires. Inventory is LOOOOWWW.

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