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?

Phil Wells

OP

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

6y

Originally posted by @Tyler Blackwell:

@Phil Wells a coworker of mine, an of 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...

That's a really cool story, thanks for sharing!

0 Reply

Brian Ploszay

Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes

6y

The global dominance of the City was poised to be even more important in the 21st Century. Cities will not empty out, but it is worthwhile considering a few events that occurred this year.

It is not an unprecedented event for cities to lose population. Look at the 50 year population stats of older dominant cities, including Cleveland, Detroit, Pittsburgh and St. Louis. For other factors, those cities have experienced a measurable population decline.

The pandemic will pass and people will feel comfortable in Cities in time. In the short term, suburbs of places like New York City are absorbing housing demand from would-be City dwellers.

Another important trend may potentially outlast the pandemic - working at home / remotely. If reports are true that home productivity is strong, then firms may have interest in the cost savings. The per capita cost of office space is high in places like NYC.

And some workers like it too. My thoughts really go to the Bay Area where employees want to embrace this. The housing costs are too high for middle class residents, spurring some exodus of that region into other low cost states. Facebook's Mark Zuckerberg echoed this, saying telecommuting will be increasing in their company. Keep in mind, many companies cannot perform their work load without close collaboration. Employees who work from home usually need to occasionally go to the office, and this limits the distance that employees can live away from their base.

4 Reply

Jason Weeks

Specialist · Member since 2019 · 32 posts · 22 votes

6y

@Phil Wells it’s an interesting prospect.

The answer is yes and no. Cities are not just about work, they’re also about collective identity and cultural gathering - think NYC and Broadway.

There will be some people who don’t value this and we’re in a city ‘just for work’, and they will definitely be looking elsewhere.

There will be others who’s job is a physical delivery of a service, and eventually will resume person to person interaction - albeit perhaps slightly reduced and with controls - and they will want to minimise commute, so they will still be on the city.

And there will be those that love the city life. They will not trade away being in and around a city for anything.

There’s also a missing piece here which is the adaptability of cities to reshape to be a post Covid environment.

From my perspective what we’re seeing at Vendorable is a lot more pressure on traditional office commercial and single business tenancy cluster commercial, less so on residential.

Hope this helps, it’s a moveable feast at the moment though it seems - so my thoughts could change next week based on new info!

1 Reply

Jason Weeks

Specialist · Member since 2019 · 32 posts · 22 votes

6y

@Ujwal Velagapudi - great point about companies expecting to adjust salaries.

0 Reply

Bruce Runn

Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes

6y

I think people will gravitate from expensive big cities to less expensive big cities. When I tell people where I'm from (population 50,000), I tell them it was a great place to grow and probably a good place to retire but quite boring in between. I expect to see people from the coasts that work for tech companies/finance to move out of CA/NY into places like Austin, MPLS, Denver so I think demand will go up.

1 Reply

Jason Raymer

Member since 2020 · 10 posts · 2 votes

6y

@Phil Wells — One thing I think is worth considering is the condition of the government they are currently experiencing. For example, how the state government is dealing with COVID❓ Are they opening up? Do they have a good reason to stay locked down or not? Some people are leaving a state that is incredibly poorly managed and how the state with COVID was the final straw. So, the decision itself wasn’t solely based on COVID alone. Some of these states were already seeing people leave before the COVID event started. This gives more opportunity for people who already wanted to leave, but we’re stuck with leaving = Losing job.

0 Reply

Justin Thorpe

Member since 2020 · 437 posts · 675 votes

6y

@Michael Gansberg

You said it well.

The analogy someone explained to me was take a good stock of a great company, say Google or Amazon. Every few quarters they will miss their Wall Street estimates and the stock will tumble 10 - 15%. Now some people (and there is no shortage of that mindset) will take this as the “beginning of the end” for these great companies and write trendy and bearish views on their future. The wiser ones however dive into history and look at the fundamentals and double down on the stock.

I see bets on SF, NYC, London etc the same way.

A pandemic hits and there is a cloud of bearishness and a fatalistic attitude towards these iconic cities. A riot hits and people feel NYC is the next Detroit and write an obituary.

Like you I encourage people to look at the history of these mega cities and their tendency to survive and thrive through shocks like huge earthquakes (SF), Massive regional business shock (SF via dot com crash), biggest terrorist strikes ever (NYC), massive regional business shock (Bank failures in 2008 - NYC). Many folks have written obituaries albeit too quickly only to look back in a few years and say WTF!

2 Reply

Drew Slew

Rental Property Investor · Union city, NJ · Member since 2016 · 203 posts · 43 votes

6y

@Charlie Anne i agree, im from NYC too and work in tech / invest in real estate. im starting at a new company in july, and low and behold it will start with...WFH!!! damn, i never worked from home and im literally 10mins from NYC in jersey. but as i heard them talk, it will be a mix of WHF and office, which i think will be adopted by most tech firms soon. Come in the office a few days a week and work from home the rest. At least july-aug for sure. Fall, winter..who knows.

i used to rent in chelsea when my company paid for it a studio for over 2k, it was about 200sqft, couldnt fit on the toilet without my head touching the door (it was slanted to fit into the apartment).

i started buying in NJ, Hudson county condos and 2 families in 2016 when all my friends thought its a joke to move to jersey. what others said, esp in NYC, luckily the shift is now necessitated, due to millenials trying to afford some place to live (cant do it in Manhattan, even a studio is 400k), and covid makes them want more space, maybe a backyard? walk the dog? welcome to jersey, just 15mins away from the city w skyline views etc for 3-4th the price, 2bed condos can be bought under 200k, 2family in south jersey city some can still be bought under 400k.

so my guess would be surrounding areas of large citites will boom more, esp pockets that are more affordable. But then again, wasnt this always the case? U got stamford, westchester, in LA u got the valley etc. Ppl w families always opted to be close proximity to cities.

to move somewhere 2+hrs to any major city, probably unrealistic. Id put my money on any area that is within 30min-1hr to a major city where the JOBS are, and has more space and is still UP AND COMING. Basically the bad areas where investors are piling in. I dont think this is really applicable to already suburban feelins areas like LA, Houston, and basically anywhere in the US outside of NYC...

0 Reply

Drew Slew

Rental Property Investor · Union city, NJ · Member since 2016 · 203 posts · 43 votes

6y

but what is actually a more interesting question is commercial real estate.. because that WILL DEF hit a big hit, as many companies wont need that many people in the building in the future.

Taking a city like NYC or other dense CBD areas (SF?) i would think should get major bankruptcies soon, luxury condo high rise developments will crash etc. so from that side, real estate should see some major shifts.

what some can sense is a NEW NORMAL is forming. self driving cars, zoom happy hours, docusign etc. yes, many people dont work in tech, but those who work in office settings.. this tech enablement has been present for a while and in the future the mantra will be.. well we can have half the size office we had, save some costs and drive up profits..

at least if i had a company like Goldman sachs w 5000 ppl tower, id just cancel half my lease, have 2500 rotate WFH and office and drive down major costs..

0 Reply

Brian Briscoe

Real Estate Coach · Salt Lake City, UT · Member since 2017 · 272 posts · 414 votes

6y

@Phil Wells

People have been leaving the cities for years... looking at general trends. It’s not only from city to suburb, but it’s also from regions.

Can’t post the pic from my phone... but check out my favorite site for how populations are moving based on annual IRS data. Zoom in around DC where I live, and the migration trend is outward. Now, this is aggregate data, so if someone with $1m salary moves away from DC and someone with a $500k salary replaces them, it’s a net loss.

https://www.howmoneywalks.com/irs-tax-migration/

Pretty easy to see why I’m bullish on apartment investing in the Southeastern US. Money and people are GENERALLY moving from high to low cost of living areas.

On the micro level, most people are making shorter moves... it’s like someone else posted, from Manhattan to Brooklyn...

5 Reply

Selena Scott

Flipper/Rehabber · Decatur, GA · Member since 2020 · 5 posts · 3 votes

6y

@Phil Wells this is why I moved from Philadelphia to Georgia. This may become the new norm.

2 Reply

Mark Sewell

Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes

6y

Originally posted by @Calvin Thomas:

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?

Just play the Mariners more often. And the teams in FL.

2 Reply

Phil Wells

OP

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

6y

@Selena Scott I’ve heard a lot of stories just like yours lately!

0 Reply

Jason Hartman

Rental Property Investor · Scottsdale, AZ · Member since 2012 · 314 posts · 146 votes

6y

Thanks @Phil Wells - Yes, we will witness a mass migration away densely populated cities to suburban markets. As we experience a generational PTSD, people will try to escape the two biggest danger zones - mass transit and elevators. Back in 2012 I was predicting the rise of suburbia, on my podcast, due to the emergence of autonomous vehicles and Covid-19 & riots will accelerate this trend. Real estate investors will profit by providing good suburban homes. Happy investing!

1 Reply

Christopher Canzoneri

Rental Property Investor · Cornwall, NY · Member since 2018 · 14 posts · 6 votes

6y

Here in the area north of NYC the market is on FIRE from everyone getting out of the city.

1 Reply

James CarlsonBusiness Member

Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes

6y

@Phil Wells As some others have already noted, this is a trend that is already in the works, pre-Covid. Millennials especially are starting to move to the suburbs in larger numbers. (See here and more locally to our market, here.)

We're seeing this with our clients in Denver and Colorado Springs. Heck, though my wife Erin and I ride the line between Gen X and Millennial, we are part of this trend it appears. Have always been Denver and city snobs but recently moved to a house in less-urban Colorado Springs (though still pretty close to downtown). Why? Well, supposedly to get a house ready for a house-hack/rental, but then we found we like the yard (as does our dog) and we like the space.

So yes, we will likely continue to see that trend continue, and Covid will be just one small factor in that.

[email protected]720-460-1770

James Carlson Real Estate

Website View Page

1 Reply

Justin Thorpe

Member since 2020 · 437 posts · 675 votes

6y

People are saying that dense cities are bad because they are ground zero for Covid and hence people will escape large cities and do a mad dash to suburbs.

I think a double click on that will make things clearer.

NYC & NJ were the hardest hit places. NYC is densely populated. NJ not so sure but NJ had a lot of cases.

Then when you dive into the data for NYC, you notice that Covid was harsh on 1) Elderly people 2) People with preexisting conditions 3) Obese people 4) Low Income people.

In fact in NYC, there are heat maps which will clearly tell you that the outbreaks were in lower income areas north of the city and likely not many people caught Covid riding their elevator in a posh high rise.

Ok let’s put NYC aside.

We now we see a hyper spike in cases in areas that are not dense like Arizona or South Carolina. What is going on there?

What’s also interesting to see is the number of cases in a dense city like SF have been low whereas a more spread out area like Riverside county has seen a massive outbreak.

As we speak home prices and sales continue to rise in Manhattan and even more so in SF.

0 Reply

Cody Barna

Real Estate Agent · Member since 2019 · 285 posts · 149 votes

6y

It's definitely an interesting question to think about considering the current situation. Similar to what others have mentioned I believe there's many different factors that dictate a persons living situation. However I think determining what a specific area (night life, restaurants, activities, etc.) has to offer is more important to most people rather than basing their decision on the cost to rent or own a home there. Which would mean even if they were able to start working remotely post Covid-19, most people would still choose to live in the same location based on the factors above. Not to mention it may put the average person in a better financial position if they're able to reduce one of their largest expenses being transportation.

0 Reply

Jason Hartman

Rental Property Investor · Scottsdale, AZ · Member since 2012 · 314 posts · 146 votes

6y

Thanks @Phil Wells - Yes, we will witness a mass migration away crowded cities to the suburbs. The rise of suburbia is back - happy investing!

0 Reply

Phil Wells

OP

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

6y

Originally posted by @Jason Hartman:

Thanks @Phil Wells - Yes, we will witness a mass migration away crowded cities to the suburbs. The rise of suburbia is back - happy investing!

Suburbia and those smaller cities is my prediction for sure.

0 Reply

Jason Hartman

Rental Property Investor · Scottsdale, AZ · Member since 2012 · 314 posts · 146 votes

6y

@Phil Wells Yeah, you nailed it! The only questions are, how BIG (# of households) will this trend be and what specific markets will see the highest in-migration?

1 Reply

Michael Masters

Rental Property Investor · Westport, CT · Member since 2017 · 176 posts · 183 votes

6y

More anecdotal information on the upper end of the spectrum. Our local real estate market (NYC suburbs) has exploded recently. Our area was seeing declining values but now people are getting above asking for their homes with all-cash offers from families looking to move out of Manhattan. I think the main demographic is young families who were considering moving and this has accelerated their urge to move out with young kids.

Another local trend is to rent your home out to Manhattanites for summer vacations at almost extortionary rents. We're seeing homes renting for $2,000/day (not a typo) here in Westport. The main complaint we got when we put ours up for rent was that people wanted to rent it for the entire summer, not just a few weeks.

0 Reply

Keith A.

Rental Property Investor · TX · Member since 2019 · 236 posts · 392 votes

6y

i think what people are now begging to consider more than COVID is if their city is susceptible to arson, looting, riots and a movement to disband the police.

Could you imagine yourself staying in such a place? I can't.

0 Reply

Michael Masters

Rental Property Investor · Westport, CT · Member since 2017 · 176 posts · 183 votes

6y

Not looking for a political discussion, but I think there was rioting and looting in the first few days but since it's been mostly peaceful protesting. I wouldn't be scared away from living in a city that protests racism in police departments. And just to be clear, defund does not necessarily equal disband. Defund means just diverting some funding for police departments to other city departments that provide assistance to the less fortunate. I'm not sure many cities want full disbanding of police.

1 Reply

Mike CumbieBusiness Member

REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes

6y

I know of 5 people leaving NYS for other states (The area we live in is not big by any standard and about 6 hours from NYC). My circle isn't that big either. None of them have a fear of the virus, it seems to be more the response to the virus. Small business owners put in lockdown for over 3 months. Seems twice a week I get the "We love our customers but we will not be reopening" posts coming in. I have a number of "Out of state referrals" going on. So my gut says that high density areas will lose some property value, areas with some space will raise up some. Some states not use to experiencing an influx of people will start to see that too.

2 Reply

Will people leave cities post COVID 19?

Will people leave cities post COVID 19?

Most Popular Reply

196 Replies