Will people leave cities post COVID 19?
Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes
Will people leave cities post COVID 19?
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
6yNo.
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- Member since 2020 · 437 posts · 675 votes6y
In the late part of the last decade, big techs like Google starred bus services to ferry the young and the restless from SF to Mt. View. Soon other companies followed. The appeal for the young & the restless to live in cities was so intense that eventually Google, Facebook and many large companies built offices in SF and joined thousands of smaller companies who set up shop in the city.
Even as all this happened, “grown up migration” continued into the suburbs. By that I mean people who got married and had kids realized a city like SF is not ideal for their needs.
Some however bucked the trend and continued to live in the city. To me that is your population that picks up and leaves.
I have lived in some of the biggest cities in the world (SF, Paris, London, NYC) and sure it’s fun if you live alone or as a couple but once the kids come/you are entertaining relatives etc, it’s a tight rope to fight for parking and space, not to mention the crime and the filth.
The million dollar question is what is the young guy / gal who lives in a large city thinking right now? I’d bet they are on the fence. 99% of employers are very vague about how they will allow WFH in the future. We need that clarity. To go dancing in the streets because a handful of companies have said they will allow permanent WFH is an over reaction. Yup Facebook said it, yes Google may allow (they are ok until 12/31 btw), or Square and Twitter. But if anyone on here has spent time at these campuses you will know well these are unique companies and very different from rest of the 99% of the world to copy.
To me the answer lies in how Covid behaves in comping 45 - 90 days. If it persists or gets worse, expect seismic shifts in many things. If it dissipates, expect a return to gradual normalization.
- Chicago, IL · Member since 2020 · 8 posts · 8 votes6y
Based on my local company in Chicago. We noticed an up tick in move outs in the areas of student housing. Due to the universities that forced students out of housing. But I don’t believe they will be leaving the city they will finish their leases and move out of downtown.
- Real Estate Agent · Houston, TX · Member since 2017 · 290 posts · 233 votes6y
I think Suburbs will continue to thrive.
If the top 25 cities in the nation are anything like Houston, then you have choices of multiple suburban areas that have Newer builds, more land, better schools, and similar family structure. Usually safer as well then inner cities, unless you can afford 3x the cost of a suburb like Sugar land, Pearland, Katy, etc.
But with all that said..... the lack of excitement in a suburb is still a huge knock. I've lived city life and suburb life for 5+ yrs. each. There energy of a city just can't be matched. So much good food, unique places, and now with Uber making things easy, City RE values will be just fine.
- Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes6y
Before Covid people were leaving in the masses from tax country states/cities like California, NYC, Chicago. Moving down to Nashville TN where they get to keep some of the money they earn. I've helped a ton of these folks find houses down here. I imagine covid is going to accelerate that trend seeing as places like California want to remain shut down forever.
- Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes6y
I don't think it's Covid since the exodus from SOME big cities has been going on. Places like NYC, SFO and LAX. Price is getting too high for people moving in to afford it. So the majority of transactions are residents trading up.
Larger syndicates are looking at SE (GA, NC and FL) for growth.
- Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes6y
Originally posted by @Mark-Anthony Villaflor:
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.
I think your argument against elevators is the most compelling argument I've read so far.
In all seriousness - the point you bring up on crime is a big one that few have raised. You can expose yourself and your family to far less crime by leaving these super dense cities.
- Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes6y
Originally posted by @James Hamling:
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.
I think online schooling is important but the on demand aspect of schooling is the game changer. Imagine being able to watch lectures when you want without having to drop your dictaphone off at the front of the lecture hall or have your buddy record it for you.
If I can listen to an NYU lecture while I'm in my back yard watching the dogs run around you can bet your bottom dollar I'm not moving to the city to get my degree.
- Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes6y
Originally posted by @Llewelyn A.:
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.
With an average listing price of $1,750,000 (according to realtor.com) Ditmas Park is hardly a poster child for remaining in close proximity to the big city.
I think that's the point I'm making about hyper inflated cities. Why would a young professional with a low likelihood of ever being able to afford to live in Ditmas Park want to remain in NYC? You can buy an equivalent property with way more land for around $300,000 - 400,000 anywhere else in the country excluding a few places.
I'd move if I could suddenly work remotely under those circumstances.
- Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes6y
Originally posted by @Daniel Pierson:
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.
I think those over looked cities will suddenly be in focus for investors and movers alike. I'm seeing it here in Spokane.
- Developer · SLC, UT · Member since 2013 · 50 posts · 35 votes6y
@Phil Wells
I think its possible that people will have new options post COVID. Some of the cities being hit the hardest will likely have similar damage done to their local economies. Local taxes don't get paid and politicians can't balance a budget when the good times are rolling so my estimate is that taxes in these places will go up.
Similar to @Daniel Boruch I think this will accelerate trends that are already in motion.
I dont think people will flea to rural towns but the secondary and tertiary markets will be the winners. - Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes6y
Originally posted by @Jordan Atkin:
@Phil Wells
I think its possible that people will have new options post COVID. Some of the cities being hit the hardest will likely have similar damage done to their local economies. Local taxes don't get paid and politicians can't balance a budget when the good times are rolling so my estimate is that taxes in these places will go up.
Similar to @Daniel Boruch I think this will accelerate trends that are already in motion.
I dont think people will flea to rural towns but the secondary and tertiary markets will be the winners.What you've said sounds highly likely. I was reading this morning that the mayor of Chicago isn't ruling out property tax increases to cover a huge budget deficit.
Secondary and tertiary markets are going to be the big winners through all of this.
- Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes6y
If we adjust our perspective to the numbers that would be from Manhattan to Brooklyn, you can look at a neighborhood in Manhattan and compare it to Ditmas Park, Brooklyn.
The Average 2 Bedroom Condo in Tribeca is $10 Million while the Average Ditmas Park Victorian home is $1.75 Million.
What I like to do is just divide the numbers by a factor of 10 so I can mention what it would be like here on BP because most people are not used to seeing these kinds of numbers.
Instead of $10 Million, let's use $1 Million. Instead of $1.75 Million, let's use $175k.
I fully believe that couples who own a $1 Million apt in an expensive neighborhood would move to a $175k home that's only 30 minutes away. They would have a much larger home and still have another $825k in the Bank!
Now, if we multiply this by 10..... we get the Manhattan to Brooklyn scenario in real terms.
Here is the exact statement above multiplied by 10:
I fully believe that couples who own a $10 Million apt in an expensive neighborhood would move to a $1.75 Million home that's only 30 minutes away. They would have a much larger home and still have another $8.25 Million in the Bank!
Maybe you feel this isn't real?
- 6yIan WalshBusiness MemberLender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
Interesting. Makes sense.
Originally posted by @Ryan Searles:@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.
- Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes6y
@Llewelyn A. Absolutely possible.
I still think this misses the overall point. Why would people currently renting remain in the area if they can WFH? Why would those with equity, as you described, just trade one inflated area for another when a massive pull factor (physical working locations) could disappear?
People have lived in the vicinity of cities for as long as there’s been cities, that’s nothing new. What is new is WFH and the corona virus catalyst pushing this to the next level.
- Investor · New York City, NY · Member since 2015 · 388 posts · 563 votes6y
@Phil Wells - my wife and I have been discussing this quite a bit lately. We're NYC residents, but we also live on a farm that's somewhat commutable to NYC. Lately, we've spent all our time on the farm. But- I can tell you with certainty that people will move out of cities. I can tell you with equal certainty that other people(and sometimes the same people!) will move back into cities.
The trend toward urbanization(I'm defining that trend as the rate of population increase of the cities being greater than the rate of population increase of rural areas) has persisted for at least a century, and likely many centuries. COVID-19 may cause a hiccup in that trend, but what about when there's a vaccine? Or when the world has some measure of herd immunity? Or when there's an effective treatment? One or all of these things will happen, and then COVID will recede into our collective memories.
If you're focused on near-term questions, my top question is whether we'll have a recession or a depression. Oddly, I've noticed housing demand has remained quite robust, as has demand for equities(as evidenced by reasonably strong stock prices.) From those data points alone, it appears to me that the typical investor is more sanguine about the future than I am. Though I have moderate levels of concern, I find others' lack of concern reassuring. I wonder if I'm wrong to trust in the wisdom of crowds?
MG
- Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes6y
Originally posted by @Phil Wells:
@Llewelyn A. Absolutely possible.
I still think this misses the overall point. Why would people currently renting remain in the area if they can WFH? Why would those with equity, as you described, just trade one inflated area for another when a massive pull factor (physical working locations) could disappear?
People have lived in the vicinity of cities for as long as there’s been cities, that’s nothing new. What is new is WFH and the corona virus catalyst pushing this to the next level.
Maybe I am missing the point. I didn't know you meant about "Renting" versus owning?! I was actually talking about Sales.
However, you are saying that if you sell your $10 Million Manhattan Condo that it doesn't make sense to be in a $2 Million outer borough neighborhood.
Instead, you will want to be in a neighborhood that's gives you a even bigger bang for the buck, anywhere in the US?
I think when you reach a certain level of income and net worth, your concern has more to do with Status, Style, culture and convenience.
You could be right.
We will need to wait until Sales pick up. Right now, Manhattan is having a severe problem as the High Rise buildings are preventing showings, which then cascades to Owners keeping their properties off the market.
Until Sales begin to increase in Manhattan, I'll know if there is a migration from Manhattan to outer Boroughs like Brooklyn.
However, there was at least one sale that I found in Ditmas Park on 4/15 for $1.9 Million:
https://streeteasy.com/sale/1442190
Not much data to crunch, but it's still surprising that this sale occurred.I'll have to wait for more data but that probably won't happen for a few more months or even next year as we have to wait for the sales in Manhattan to close first.
- Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes6y
Originally posted by @Michael Gansberg:
@Phil Wells - my wife and I have been discussing this quite a bit lately. We're NYC residents, but we also live on a farm that's somewhat commutable to NYC. Lately, we've spent all our time on the farm. But- I can tell you with certainty that people will move out of cities. I can tell you with equal certainty that other people(and sometimes the same people!) will move back into cities.
The trend toward urbanization(I'm defining that trend as the rate of population increase of the cities being greater than the rate of population increase of rural areas) has persisted for at least a century, and likely many centuries. COVID-19 may cause a hiccup in that trend, but what about when there's a vaccine? Or when the world has some measure of herd immunity? Or when there's an effective treatment? One or all of these things will happen, and then COVID will recede into our collective memories.
If you're focused on near-term questions, my top question is whether we'll have a recession or a depression. Oddly, I've noticed housing demand has remained quite robust, as has demand for equities(as evidenced by reasonably strong stock prices.) From those data points alone, it appears to me that the typical investor is more sanguine about the future than I am. Though I have moderate levels of concern, I find others' lack of concern reassuring. I wonder if I'm wrong to trust in the wisdom of crowds?
MG
Thanks, that's a very interesting point well made. The only thing I would say is what happens when the next pandemic comes and we don't have a vaccine and have to go through this all again? You're going to be better off on the farm (in your scenario - i'm not suggesting everyone leave a city to go live in a rural location).
- Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes6y
Originally posted by @Aaron Gordy:
No. People will still live in cities because of all the attractions of the city. In Austin during sxsw one can see some of the biggest acts and sometimes for free on Auditorium Shores. In other times of the year, one can see big acts in small places at times. I saw wu tang at a house party once... In NYC one can see a Yankees baseball game on a Saturday during the day and a broadway play at night. Good fun! One can't do that in the countryside.
True, but how do we get the Yankees to actually win a game?
- Member since 2018 · 2 posts · 3 votes6y
COVID-19 may create more of a spread out from a City Center (suburbs and even further out), but I do think they will still need to be able to access their office from time to time. So we will likely see the sprawl from a City Center to widen (for example, workers in Seattle, might move as far as 2-3 hours away, knowing that they only need to go into the office occassionally which would make for a long day, but still doable if they move further out). However, I think we will also see some exiting of cities due to the political tensions that came from COVID and some of the other issues we are currently seeing. Seattle, where I live, is becoming less and less a place that many of us want to live in due to the politics (rent control, rent forbearance until April of 2021, etc). It's become much less of a space that landlords want to be.
- Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes6y
Originally posted by @Brittany Gautreau:
COVID-19 may create more of a spread out from a City Center (suburbs and even further out), but I do think they will still need to be able to access their office from time to time. So we will likely see the sprawl from a City Center to widen (for example, workers in Seattle, might move as far as 2-3 hours away, knowing that they only need to go into the office occassionally which would make for a long day, but still doable if they move further out). However, I think we will also see some exiting of cities due to the political tensions that came from COVID and some of the other issues we are currently seeing. Seattle, where I live, is becoming less and less a place that many of us want to live in due to the politics (rent control, rent forbearance until April of 2021, etc). It's become much less of a space that landlords want to be.
I'm hearing exactly this from a lot of clients either moving from Seattle to Spokane or investing.
- Member since 2020 · 2 posts · 2 votes6y
That's my story, Phil. I moved from Normandy Park to Spokane Valley last August. Definitely happy with my move and know many other families doing the same - moving from the Puget Sound to the Spokane - Coeur d'Alene corridor. Breathe easier, and fresher air.
- Real Estate Agent · Spokane, WA & North Idaho · Member since 2017 · 135 posts · 170 votes6y
Originally posted by @Tom Curran:
That's my story, Phil. I moved from Normandy Park to Spokane Valley last August. Definitely happy with my move and know many other families doing the same - moving from the Puget Sound to the Spokane - Coeur d'Alene corridor. Breathe easier, and fresher air.
That's awesome, I'm glad the Spokane area was a good move for you!
- Investor · New York City, NY · Member since 2015 · 388 posts · 563 votes6y
@Phil Wells - I take your point on future pandemics. But we've had pandemics in the past which have been much more deadly than COVID-19 (from WaPo's site, here are a few from the past century: 1918 flu, 50 million deaths. Asian flu('57-58), 1 million deaths. Hong Kong flu, ('68-70,) 1 million deaths. AIDS, 1981-present: 35 millions deaths.) Plus swine flu, Ebola, etc. And don't forget the seasonal flu which kills 30k-60k Americans each year, I think?
Through all of that, urbanization has continued. When you're in the middle of something, it always feels like "This time, it's different." This time is no different- we'll get through it and people will continue to flock to cities. Just my opinion.
- Rental Property Investor · Olympia, WA · Member since 2010 · 127 posts · 76 votes6y
@Phil Wells a coworker of mine, an executive at a medical startup, did just what you mentioned. She lived in a tiny studio apartment in Manhattan with her fiancee, both earning 6 figure incomes. No cars, difficult transport, expensive living. Both of them, in theory, could have been remote but weren't, and now they are remote as a consequence of stay at home orders. As of this moment, they're nomads, intending to hop from AirBnB to AirBnB in fun locations (presently in a quaint vacation spot in New England) once every couple months, getting a taste of the United States before settling...
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