An article recently published by Redfin highlights the current working from home trend. In a survey it's revealed that up to 1 in 4 newly remote workers expect to continue working from home after COVID 19 passes. Imagine if you were paying $4000 a month in rent for an apartment in a major city with a strict pet policy and nowhere to park. Suddenly COVID 19 hits and you realize that all you need to earn money is an internet connection. Almost overnight you begin to think it might be nice to have a house with a garage, some land, somewhere for a couple of dogs to run around and maybe even somewhere to start a family ... and also it might be nice to do all this for half the price of your current rent. I think this is a real possibility but what impact will it have on the nations major cities? I'd love to hear peoples arguments for cities because I haven't seen much in the press of late. Original article - https://www.redfin.com/blog/wf...

I think you missed the point of the article (by miles) and the severity of covid (by a few yard lengths). So, lets try again. The prevailing thought is that folks will leave their current location spurned on by the ability to work anywhere - proximity to job is no longer important or vital. That may be the case, especially for some tech workers, but I don't see that becoming a major trend. I think people will work remotely but there is always the need for office time, perhaps even 1-2 days every 3 months, for example, which become impossible/expensive when you move away from your job completely. Some folks can work like that and some companies may allow it -- I work from home and have been working from home since 2014, but still I have to head into the office about 6-10 times a year and visit clients about 10 times per year...so I could see that being a barrier for companies. The transition into WFH right now is out of necessity; when necessity passes it becomes leisure, and at the discretion of the companies. It may transition to partial WFH, but proximity is still important -- in other words, I don't see a mass exodus on the horizon, losses will be gradual over time and most likely beset by or eclipsed by the young folk who enjoy city life and want to live the city life. Regarding severity of covid, well, this isn't the place for a discussion on it. My wife always says -- such a smart lady -- there is my version, there is your version, and there is the truth. The truth of covid is still evolving, both scientifically and socially. 112,000 are dead. That's a lot of bodies. And that's with everyone supposedly avoiding each other for over 2 months. This could potentially get a lot worse -- but I hope I'm wrong.

I believe a lot of people will leave the highest cost and most dense cities. Some will move to the suburbs, and others will move to more affordable cities. I've already had a number of tech workers, who are suddenly allowed to work remotely, contact me about moving to San Antonio, because it's much more affordable, but still has a decent city lifestyle. So far I've heard from people planning to move from the Bay Area, Denver, Austin, DC, Philadelphia, and NYC. I think there are a lot of people that will still want to live in cities, but may start to opt for lower cost and slightly less dense ones. I'm not sure it will be a high enough percent to really harm the larger cities, but it should be enough to actually help out some of the lower cost cities and suburbs. People have been drawn to cities for thousands of years, so I don't think they're going to just implode. They may just lose a bit of their edge.

I think you hit the nail on the head with this comment. The highest priced, most densely populated cities are the most likely victims of this trend. I don't think for a minute people are going to go live in a cabin in the woods, but are people going to trade NYC for a place that's half the price but an hour outside the city, I think so.

@Phil Wells so... "but are people going to trade NYC for a place that's half the price but an hour outside the city, I think so"yeah, but that's the deal, people already do that, so what's the difference here? I mean, my fried in Mahopac, NY doesn't live there because he loves the commute to Stamford, he lives there because Stamford and NYC are super pricey, and he gets better value for what he wants. The deal is, I don't think in these examples that the 'people leaving' part is the focus... it's where are they going?... having 0.15% of NYC workforce decide to work somewhere else doesn't move the needle much. Now, if you told me they all decided to move to Scranton, PA... well that's suddenly a like 1.6% boost in the population for that town... which is a much bigger deal... so I guess to answer your OP question... I don't really think it's going to affect major cities that much, but, for mid-sized cities that are big enough to have decent broadband footprints, this could be boom times for them. So I prefer, in this situation, to focus on which smaller places are winning bigger in this case than the larger cities are losing.

I've been thinking this will definitely happen to some extent. I don't think it will be a mass exodus, but something that the minority of people working fully remote jobs, who also don't care much for the city they're in, are willing to move. This has already been happening as Texas has been getting a lot of CA and NY folks departing the major cities for a better cost of living while still working their tech jobs. I think Facebook did mention they will look to re-adjust the salaries accordingly based on your new "home" base, and I think most other companies will follow. I don't see anybody getting SF engineer money for living in a small town in the middle of nowhere. Depending on how much their salaries actually are re-adjusted will also factor into their decision to move.

@David Martin I wouldn't assume broadband in the city is better than outside major cities. I am sure it depends on the part of the country, but I have many coworkers in big cities that have horrible internet. I live in a relatively small city and we have gigabit wired options. We have three wired broadband service providers and one wireless provider operating in the city. Even in rural areas in my state they have fiber internet. The rural telecommunications act subsides it, so the coops pay almost nothing for it. We also have the advantage of less users connecting directly to the internet back bone. Add to that SpaceX has been putting Starlink broadband satellites into orbit, which will wire the entire world to fast internet with service starting later this year. Other companies like Amazon are planning to launch competitive services. @Phil Wells the changing attitude of "work from home" flexibility is going to force changes. People have been geographically tied to their employer and stuck with horrible soul sucking commutes. Many people don't want to go back to that. The other reality is big cities are struggling to maintain control. Vandalism and looting are destroying beautiful cities. Some cities are responding with anti-police legislation or even proposing to defund the police. People want to live in a safe and clean city. Who knows, it may not be a statistically significant number of people when all is said and done. It is a trend worth watching.

@Phil Wells the post and premise of the new market disruptor reminds me of the old adage that "the first one through the wall always gets bloody". I believe your really ahead of the ball here. I recall when a few "nut jobs" were talking about how one day we would all be shopping from home on our Gateway PC, and 99% of us laughed at them. A few years later 89%, then 50%, and now Bezos is set to become the first Trillionaire. Most often major market disruptors seem completely obvious in hindsight, yet completely unbelievable at the onset. In my area we have a large CapitalOne headquarters, one of their main national hubs, with covid they had to rapidly implement remote working for the entire staff, and they did. I was speaking with a person from there who will remain un-named about how it's gone and he said the funny thing is productivity has gone through the roof, they have been hitting numbers they could only have dreamed of before, and it's being watched very closely from top-down. I mentioned the expense of there giant high rise and he gave me that telltale side smile, the one that we all know as "your spot on, and I can't say a word". It's a well known established metric for a home buyer; schools and proximity to work. Well, we are in a technology age where for a great many positions consist of functions that are fully capable of being completed from a home office, it has been the culture and habits we have that say we must work from an office, that's how it has to be for things to work. Along came COVID and removed choice, it forced us to either embrace remote working or in many cases not work, and so we embraced it. We are now past that hump of experimentation, we are now in a time or considering do we want to bring all staff back into office, not "we need to", and with that comes the consideration of cost vs benefit. In addition it spurs the expanding thoughts, if we can run these jobs effectively remotely, wow, we could hire remotely, maybe hire where cost of labor is half???? Without doubt this will impact where people live, in a very big way. How can I say very big way, review what the top job sectors have been the last several years, the list is dominated by tech jobs, jobs that are the best candidates for remote working. Who is the biggest demographics that have been focusing on main metropolitan housing, it's that same grouping that's concentrated in the tech sector. So yes, this may be the beginning, of the beginning, of a paradigm shift. I believe the moves will be along the line of the remaining consumer motives combined with some of the age old drivers such as good schools, low crime, good internet, nice weather, cool things to see & do, and convenience in food. Shopping, well that's moved to Amazon in a big way so that is becoming less and less a factor isn't it. In the end, this is nothing new, neighborhoods move through cycles, many C/D areas are loaded with giant mansion-like homes because once upon a time that was an actual mansion and the area was an A+ area, things changed.

Throwing my two cents in. My girlfriend and I both live in Bay area and both have jobs where we can work remote - and offices that have told us we don't have to be back until 2021. We are also month-to-month on our rent so have the flexibility to ditch. We have been going back and forth and finally decided to make a go for it. We are leaving town in July. Boise--> Sweden --> Montana --> Texas --> North Carolina --> Florida. We'll save $1.5-$2K / month on rent and have found some great month long-stays through Airbnb. We'll be closer to family and get to see a big chunk of the US that we haven't been able to explore. There's a world where we may never come back to SF, and that would be OK :)

I moved out to the “boonies” and we used to live in Houston, 2 yrs ago. I like working from home. I’m now in my mid-50’s and I guess the city and commute just takes years out of you. Our current life is in a small town with only 5000 residents. I actually love the country life. I own 10 acres and built me a real nice pool and 4000 sq ft home. My boss and company are all about safety. With them fostering safety it makes me work more hours but it ‘ok’ with me. Htown traffic is terrible I couldn’t imagine how NY, LA, or Chicago’s is. Good talk Bennie

Will people leave cities post COVID 19?

Justin Thorpe

Member since 2020 · 437 posts · 675 votes

6y

@Phil Wells

Can you shed light on your definition of “super inflated cities”?

0 Reply

Aaron Gordy

Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes

6y

There is a reason why NYC-Manhattan and San Francisco is so high. The land mass of the cities are small. There is no where to go but up. SF is a peninsula and Manhattan is an island. These two areas have been some of the most priciest areas for a very very long time.

1 Reply

Phil Wells

OP

Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes

6y

Originally posted by @Aaron Gordy:

There is a reason why NYC-Manhattan and San Francisco is so high. The land mass of the cities are small. There is no where to go but up. SF is a peninsula and Manhattan is an island. These two areas have been some of the most priciest areas for a very very long time.

I think the reason they become so highly priced in the first place is that they were brain magnets where you could live, work and do extremely well for yourself. But now, given that you can work for a tech company or manage peoples investments in your spare bedroom there's no need for people to flock there as much anymore IMO.

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Justin Thorpe

Member since 2020 · 437 posts · 675 votes

6y

@Phil Wells

People are working remotely because of Covid. When Covid goes away that trend will weaken significantly and most of humanity will go back to working and living the old fashioned way and cities will continue to grow.

9-11 did not kill New York - although I know in the early day’s post the attacks there were a lot of articles about how NYC will empty out.

Terrorist strikes in London and Paris did not push people out or wipe those cities down. Initially people got cautious and then life was back to your old ways. For every guy sitting in small or middle size town thinking mega cities are finished, there are 100k youngsters all over the world who are looking to move into these big cities down the road.

I think there will be migration out but in due course there will be more people who will move in.

1 Reply

Phil Wells

OP

Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes

6y

Originally posted by @Justin Thorpe:

@Phil Wells

People are working remotely because of Covid. When Covid goes away that trend will weaken significantly and most of humanity will go back to working and living the old fashioned way and cities will continue to grow.

9-11 did not kill New York - although I know in the early day’s post the attacks there were a lot of articles about how NYC will empty out.

Terrorist strikes in London and Paris did not push people out or wipe those cities down. Initially people got cautious and then life was back to your old ways. For every guy sitting in small or middle size town thinking mega cities are finished, there are 100k youngsters all over the world who are looking to move into these big cities down the road.

I think there will be migration out but in due course there will be more people who will move in.

Cities have gone through pandemics and terrorist attacks in the past and recovered - that's a good point!

However, it does seem to me that the internet age hasn't effected the work environment as much as it should have which seems odd to me. We still have physical locations, cubicles, commutes, prized parking spots near the door just like we did 40 years ago. We're in a situation where you can buy a home completely online but we still have to drive into an office to field inbound custom service calls - I don't see that lasting long term post COVID.

1 Reply

Aaron Gordy

Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes

6y

@Phil Wells Not so sure, man. They have always been expensive relative to the rest of the US cities for a very long time predating tech. But only time will tell though.

1 Reply

Phil Wells

OP

Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes

6y

Originally posted by @Aaron Gordy:

@Phil Wells Not so sure, man. They have always been expensive relative to the rest of the US cities for a very long time predating tech. But only time will tell though.

50-100 years ago if you wanted to be a financier or an industrialist or a lawyer, etc, you packed your bags and went to NYC (hence the long term high prices even pre-tech). Now all you need to do those things is an internet connection.

Time will certainly tell!

0 Reply

Justin Thorpe

Member since 2020 · 437 posts · 675 votes

6y

@Phil Wells

WFH is not a new phenomenon. It’s been around since the late 90s when the internet age started. It got some success but not much. It worked for some and was a world class disaster for others and I mean for both employees and employers.

I think despite rapid advances in technology (video conf included) office culture has remained strong. The key driver here is not technology but physical safety. Are you as an employee safe going and working in an office? As we speak, maybe not. But once Covid dies or gets thwarted by vaccines/medications etc, the safety angle changes and we normalize.

When we normalize we go back to doing normal things.

It will happen gradually but that’s the path forward. To think one can build a flourishing corporate career or a large business sitting in their bedroom will work is not something I can imagine.

2 Reply

Stone Saathoff

Investor · San Antonio, TX · Member since 2019 · 576 posts · 307 votes

6y

I think that really depends on the area. Some places went totally overboard with the restrictions and their residents weren't too happy. Were they bothered enough to make plans to re-locate? I bet we will find out soon. As for Texas I think this won't affect the major cities too much. For everything I'm involved with in San Antonio we are booming.

1 Reply

David Thomas

Real Estate Agent · Cranford, NJ · Member since 2011 · 149 posts · 54 votes

6y

Our brokerage in northern NJ has been receiving a lot of buyer interest from folks looking to move out of the NYC area to the suburbs in central and northern NJ, where the commute is within 1 hour. However, I don't have data or statistics (and haven't seen any reports elsewhere) to show how much is simply pent up demand vs a shift a major shift in behavior. My market has always had a demand from people moving out of the cities in the NY metro region, but time will tell if this is a major change for the long term.

1 Reply

Amanda L.

Member since 2020 · 2 posts · 2 votes

6y

For what it's worth, I've been in NYC for ten years, and I'm considering leaving. Heavily.

2 Reply

Scott WolfPro Member

Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 957 votes

6y

I haven't read this entire thread, so I apologize if I missed someone else saying this, but jobs are not the only reason people move to these major cities. You also need to account for cultural experiences (Broadway, Museums, Concerts), food choices and quality of said choices(I may or may not have cried when my favorite chinese take-out place closed for good due to COVID19), dating scene etc.

So while I do think the WFH will have an effect on city populations, and people will certainly move out(or not return), I don't think the effect will be as great as thought. Families who might have stayed may move out, but some people are lifers, and the younger crowds all seem to know that living in a city in your twenties is great(maybe not financially).

3 Reply

Phil Wells

OP

Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes

6y

Originally posted by @David Thomas:

Our brokerage in northern NJ has been receiving a lot of buyer interest from folks looking to move out of the NYC area to the suburbs in central and northern NJ, where the commute is within 1 hour. However, I don't have data or statistics (and haven't seen any reports elsewhere) to show how much is simply pent up demand vs a shift a major shift in behavior. My market has always had a demand from people moving out of the cities in the NY metro region, but time will tell if this is a major change for the long term.

I think anecdotal evidence like this is really important to help us as an investment community get ahead of any trends. Thanks for sharing!

0 Reply

Ryan Searles

Rental Property Investor · Middletown, DE · Member since 2020 · 1 post · 1 vote

6y

@Ian Walsh They’re all moving down here to Delaware. We are having a massive influx of new residents coming from NJ, NY, and PA. With Delaware’s property taxes being up to an 1/8 the cost of some surrounding states, people from their suburbs are moving to Delaware and getting twice the square footage for less of a monthly payment.

1 Reply

Steve Miklashevskiy

Real Estate Agent · Hillsdale, NJ · Member since 2020 · 87 posts · 39 votes

6y

If people start leaving large cities, forced or choose to work from home instead of commuting, the companies will adjust their real estate needs and there will be plenty of available commercial real estate in large cities. What if commercial real estate prices drop significantly enough over the next year or so, will this eventually lead to lowering of residential real estate? curious to hear thoughts on this potential shift in commercial real estate and resulting changes in residential real estate prices.

0 Reply

Stephen KeigheryBusiness Member

Rental Property Investor · New Orleans, LA · Member since 2018 · 716 posts · 555 votes

6y

This was already a small trend @Phil Wells and COVID will accelerate this. I don't think it is going to have a massive impact on cities though, people are still going to gravitate towards wanting to love on them.

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1 Reply

James Hamling

Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes

6y

Originally posted by @Jimmy Yu:

Short answer is It won’t be large enough of popular to leave a city so that it can impact housing price (to fall) and a particular area to raise

Besides the infrastructure that many talks about, there is the input and output of labor and skilled workers, Currently the market has C amount of jobs that are WFH-able, and let’s say that is 10,000 of Software engineers in this example, the current 10,000 of engineer can decide to move to less expensive area so to speak, but most of them will not, I will explain later, you see in order for the FB or google to continue to hire SE they need to have continuous input of student into the top schools, which are mostly in better areas so to speak, FB and google in this case won’t just hire anyone, so in order for less student to go to bigger cities where better education is offered, that city needs to have a better school, and public school doesn’t fund over night, so you get the idea, then for those who lives in say LA Bay Area, if they decided to move, they will need to move to an area where good education can be offered, and they won’t be there “cheaper in price” area that we are thinking about.

LA has always see a shortage in housing and that will continue to get worsen, for those that moves to TX, it’s mainly being dragged by Companies moving to TX therefore the migration, of say FB decided to move to a smaller town out of no where then yes we can see that to follow, but just a WFH policy will not lead enough people to move, lastly is that no local government will incentivize enough to bring people in their cities, like what TX is doing, because simply if they haven’t they didn’t have the resource or not being able t offer incentive for the big companies to come in therefore bringing up RE and commercial Revenue stream, those that wanted to move, has a reason to move long time ago, could be cost of living has been pushing them out, or being closer to family, and now it just gave them one more reason to act on it, but WFH itself will not be a trend to get people moving.

I am sorry Jimmy but your premise on "good schools" for tech education and so on being centered in these large city areas is simply not true, not even close.

I am going to give you 1 example, my own back yard.

I live in the St Cloud area of MN. I find most often those of Ivy League are very familiar with the area, why you say as it is not in a major metro-plex, because we have one of the top universities on planet earth here, and we have a top state university that has more foreign nationals going to school here then I dare to venture a count, it's a lot, and another major university. Engineering and technology is the main stay, and yes cheap housing is a big one of coming here vs Harvard, Princeton and so on.

On down side, they almost always leave once done with school, so we don't get the real benefits of such, but point is top schools are not all located in major cities, actually a great many are not in major cities.

1 Reply

Mark-Anthony Villaflor

Rental Property Investor · El Nido, Palawan · Member since 2012 · 29 posts · 7 votes

6y

Absolutely, folks will start looking out of getting high-density urban spots into suburbs or even rural spaces.

Work from home- need more space- Twitter, Facebook, Google employees. Zoom!

Learn from home- need more space- families with kids need space

Safety and elevators- don't want to be in that space

Mass city transit and density- don't want to be in that space

Crime- more safety outside of the city

Outdoor space for gardening- lots of urban gardeners now almost overnight.

Tons of reasons these are just a few. Interestingly I saw a recent post on youtube with Ryan Moran and @Jason Hartman about The Migration into Suburban Living. https://www.youtube.com/watch?v=YwBNhEgYH0I

Ryan mentioned it was cheaper to own a 25 acre ranch not to far from downtown and it would still be cheaper than a small apartment in downtown.

Tons of other articles have been popping up even before Redin. Do a quick Google search (in the news section) "migration to suburbs" tons of stuff comes up.

1 Reply

Jimmy Yu

los angeles, CA · Member since 2017 · 31 posts · 5 votes

6y

@James Hamling

What my explanation of is a chain effects of the system of why covid wouldn’t impact, school is part of it and Stanford and Harvard is always full, I didn’t say school was the sole reason why

0 Reply

James Hamling

Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes

6y

Originally posted by @Jimmy Yu:

@James Hamling

What my explanation of is a chain effects of the system of why covid wouldn’t impact, school is part of it and Stanford and Harvard is always full, I didn’t say school was the sole reason why

You are aware of online schooling? This entire covid event has also been a major catalyst pushing universities to more embrace online schooling, and without doubt the added revenue potentials from erasing geographic obstacles and classroom constraints has not missed there attention either, including that of Harvard.

1 Reply

Scott Christopher

Investor · Seattle · Member since 2020 · 11 posts · 4 votes

6y

The 5% wealthiest in New York City left at the beginning of the crisis, others still fleeing to safer places.

1 Reply

Jimmy Yu

los angeles, CA · Member since 2017 · 31 posts · 5 votes

6y

@James Hamling

James, in order to go to a good university, your infrastructures of k-12 has to be good too right? And I’m aware of online school and how many has shifted to online school during the pandemic, so there is no need try to assume that I didn’t have that logic involve, just as I would assume that you would understand that it is a ladder effect from k-12 not just university alone,

Again, if you pick and choose which part I reply in this topic of course you’d find disagreement,if you mainly want to focus just on the school (university part) then you are just picking what you don’t agree rather than macro.

0 Reply

Llewelyn A.

Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes

6y

Obviously, that's Manhattan.

Where are people going to move?

HERE:

The above is Ditmas Park...... BROOKLYN. Just about 20 to 30 minutes away from the City but extremely low density.

If you think about it, most BIG Cities offer more than just a bunch of high rise apts.

It's also interesting that one of those larger apts in Manhattan may be more expensive than one of these beautiful Victorian or Queen Anne homes here in Brooklyn.

I'm not sure about other Cities, but NYC has just about every kind of neighborhood you want.

I personally believe that there won't necessarily be a large NET migration out but there will be a demographics shift.

Older people and more vulnerable people, especially with families, will want to move to a lower density neighborhood rather than higher density neighborhoods. Just imagine you ride in an elevator and someone sneezes.... opps... you have just been exposed and you could not social distance.

Younger people, especially single, ambitious and professional, will choose a City Life Style over Cow Towns.

When you are a young workaholic earning a substantial salary, even when WFH, you still want your Gym, Restaurants, Parks, Bars and Clubs very close. Really, you don't want to drive. You just don't have the time to do that.

My feelings is that the Demographics will shift and places like Manhattan will become a lot younger. Younger people feel a lot more invincible than their older counterparts.

Places like Ditmas Park, Brooklyn, will get older and more mature established professionals.

Same City, just different Neighborhoods.

2 Reply

Marcus Johnson

Investor · Saint Paul, MN · Member since 2015 · 663 posts · 512 votes

6y

@Phil Wells

We know New York is a disease infested, dense, polluted, expensive and terrible place to live. Minneapolis when given the chance is full of people who want to trash businesses, loot, riot, block interstates and hate the police. I have a duplex in South Minneapolis and the only reason I stay there is my tenants are good, the cash flow is good.

1 Reply

Daniel Pierson

Investor · San Francisco, CA · Member since 2015 · 75 posts · 25 votes

6y

my 2 cents is that urban sprawl will increase as people are willing to make longer commutes since they can work from home more often. I also believe it will lead to a population increase in '2nd Tier' cities - Salt Lake City, Boise, Portland etc. We've seen a 9%-10% reduction in rents in cities such as Seattle and San Francisco.

2 Reply

Will people leave cities post COVID 19?

Will people leave cities post COVID 19?

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