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.

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?

Anna Swartz-Lopez

CA · Member since 2020 · 63 posts · 62 votes

6y

Originally posted by @Brian Ploszay:

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.

As someone living in the Bay Area, I totally agree with this perspective. Housing is just too expensive, and so people commute to work each day - 40, 50 even 100 miles EACH WAY is not uncommon. Increased telecommuting will greatly ease the burden of living here. Even for those who wish to stay, having a long commute a few days a week, rather than every day, will be a tremendous benefit.

2 Reply

Kyle J.

Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes

6y

I thought this was an interesting article about some long-time Bay Area residents leaving the Bay Area, why they were leaving, and where they decided to move to:

SF Gate: 'I'm finally leaving': Stories of Bay Area residents moving because of the pandemic

1 Reply

Jon S.

Member since 2020 · 21 posts · 10 votes

6y

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 :)

6 Reply

Brandon CohenPro Member

Real Estate Agent · New York, NY · Member since 2014 · 160 posts · 45 votes

6y

Can only give my sense from what I’m seeing as an agent in NYC. I have 3 clients that are leaving NYC and are choosing to sell their homes (once we get to Phase 2 here). All of these are people that have known they would move at some point, the pandemic just accelerated the process. I have a handful of Buyers who haven’t changed their position, still looking just Now hoping for a better deal.

The rental market has been VERY active. We have some high end and some middle of the road homes that have all seen a lot of traction and leases have been signed and people have moved during this time.

1 Reply

Phil Wells

OP

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

6y

Originally posted by @Jon S.:

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 :)

You're the second person on this thread that's suggested a new nomad lifestyle. How bizarre is it that you'll actually save money doing that?!

0 Reply

Tom Kastorff

Rental Property Investor · Las Vegas, NV · Member since 2014 · 137 posts · 118 votes

6y

Originally posted by @Phil Wells:

Originally posted by @Jon S.:

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 :)

You're the second person on this thread that's suggested a new nomad lifestyle. How bizarre is it that you'll actually save money doing that?!

When rent for a 2b/2ba apt in the SFBA is $4500/mo, it is not hard to save money literally anywhere else, especially the very low cost cities he ripped off. All of those are at least half the cost, although he must have found really good airbnb monthly deals. Sweden is the only expensive country, but even then very much worth the cost, lovely place. Go to Copenhagen!!!

1 Reply

Jennifer S.

Investor · London · Member since 2017 · 160 posts · 82 votes

6y

https://www.bloomberg.com/news/articles/2018-03-27/the-extreme-geographic-inequality-of-high-tech-venture-capital

I forget if we are allowed to post to articles - but Bay Area over time has taken roughly half of venture capital funding and Bos-NY-Wash corridor takes another third. So the remaining metros take very small shares (at least in the recent past). I wonder how the work from home trend will affect VC funding that creates the future job / wealth pipeline typically?

As for finance, I have read some articles from top bankers who say that yes they could work from home for a time but it's because relationships had already been established deeply. They are not sure how it will work going forward. I do agree though that the price effect of the expensive city outflow seems to be stronger on how it impacts the cities who get the inflows (Boise, Arizona etc). I'm in cash right now except for my primary UK home so I have no regional axe to grind.

Separately, about entering Sweden, not sure when you plan that but currently EU is closed to USA arrivals unless you have a EU passport. This is true even though some EU countries have vastly fewer cases than some US states. Doesn't seem like there is a big appetite in the US to open borders to the EU so I doubt the reciprocal will be happening soon, but call me bearish! :)

1 Reply

Jennifer S.

Investor · London · Member since 2017 · 160 posts · 82 votes

6y

@Jon S., that digital nomad plan sounds awesome and it is something I would love to be able to do in the future. One thing you may want to research before going abroad is to check how your travel/health insurance would work. If you haven't bought a policy yet, there may be a coronavirus exclusions in the new policy meaning a lot of things like flight cancellation / extra hotel costs due to borders closing etc may not be covered. More importantly, if you need medical care for coronavirus those costs may be excluded. It's unlikely you would need that but not being covered either would be problematic. Another point is whether the US government advice not to travel abroad invalidates any part of the policy if you already had an existing policy. It may be all ok but these are some things to iron out before you go. I was hoping to visit family in the US soon-ish and I have had to read about this stuff. Sorry to be over cautious but it's better than getting a big medical bill

1 Reply

Michael Gilman

Investor · Westchester, NY · Member since 2014 · 96 posts · 57 votes

6y

Seconding the astronomical increase in buyer demand here as well in Northern Weschester, as well as in rural traditional vacation areas such as the catskills and Vermont. Inventory is now at an all time low in many of these places. This is a large scale demographic shift away from the NYC core. We have a rental condo in a high rise in midtown and the broker said its essentially unrentable until at least late summer because of closure of amenities and elevator restrictions

Originally posted by @Michael Masters:

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

Cory Clasen

Member since 2020 · 1 post · 3 votes

6y

I live in Montana and it seems like the "a mass exodus" is coming here! It is crazy here, even when we were in Phase 1.

3 Reply

Mitch Kennedy

Rental Property Investor · Waupaca, WI · Member since 2018 · 89 posts · 30 votes

6y

@Phil Wells

I absolutely agree with you, why? Because I’m literally having that conversation with my leaders right now and am looking to move to a more rural area.

2 Reply

Phil Wells

OP

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

6y

Originally posted by @Cory Clasen:

I live in Montana and it seems like the "a mass exodus" is coming here! It is crazy here, even when we were in Phase 1.

Note to self - look at REI opportunities in Montana.

That's awesome - Montana is stunning.

2 Reply

Phil Wells

OP

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

6y

Originally posted by @Mitch Kennedy:

@Phil Wells

I absolutely agree with you, why? Because I’m literally having that conversation with my leaders right now and am looking to move to a more rural area.

Very cool - I'm hearing it from every corner of the country in my real estate sales business.

0 Reply

Jon S.

Member since 2020 · 21 posts · 10 votes

6y

I'll be visiting Boise, Idaho in late July/early August and then Livingstone, Montana in September. If anyone is interested in startups or tech, hit me up, I'm interested in real estate entrepreneurship and technology and down to chop when I'm in town.

2 Reply

Jonna WeberPro Member

Moderator

Investor · Boise, ID · Member since 2011 · 1k+ posts · 736 votes

6y

@Cory Clasen - Feeling it in Idaho too. Very thankful to already be living where we are!

208-608-4884 Podcast Guest on Show #80

0 Reply

Account Closed

Lender · Palm Beach Gardens, FL · Member since 2016 · 9 posts · 10 votes

6y

I think you are going to see a shift away from cities to the suburbs and more rural type areas in response to covid. If you are couped up in a city environment on lockdown, and see others on social media spending their lockdown in spacious backyards, private swimming pools, etc., that would have to affect your mindset. "Am I comfortable in this setting if another lockdown happens ?" will have to be considered.

A lot of people and industries figured out ways to work remotely during the last few months. Proximity to employment may not be as much of a factor going forward.

These factors will lead to at least a short term shift to suburbs and rural.

4 Reply

Phil Wells

OP

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

6y

A snapshot of the data is in. Right now people do seem to be leaving the super cities for less densely populated areas and smaller cities.

https://www.redfin.com/blog/ap...

0 Reply

Jason Taliaferro

Real Estate Agent · Baltimore, MD · Member since 2014 · 113 posts · 71 votes

6y

Probably not. I have been hearing the city exodus argument for a while. COVID is just reigniting discussion.” IF you ever wondered why cities are so expensive it is because people are willing to pay for the cost to live there. It is all about supply demand and scarcity. There are people who live in cities despite the cost and the crowds and people who live in the burbs live there despite the sprawl, traffic, and uniformity. Typically, people shift from one to the other due to families. Space is expensive in the cities and people begrudgingly head to the burbs because they need more space. Likewise, when a person who prefer the suburbs has to relocate to the city possibly due to work, they do so begrudgingly.

3 Reply

James De Stefano

Real Estate Agent · Houston, TX · Member since 2017 · 290 posts · 233 votes

6y

Very interesting thread... I think Suburbs will continue to be big pulls if ppl can continue to work from home for the coming years.

The way schools are handled this fall will be very impactful too. Will kids be stuck at home if there are out breaks? will the liability be too great to have public schools back in session?

I don't have kids but trying to balance a REAL job working from home while having your kids in another room/ unsupervised, will be a massive issue coming up.

0 Reply

Jason Weber

Member since 2016 · 3 posts · 0 votes

6y

This seems relevant to this thread... Here's the best source I can find on the pandemic projections. You can select your country and state at the top. It's from the data scientists and researchers at IHME. They update it every day: https://covid19.healthdata.org/

I've been keeping an eye on it for a while. They just recently started displaying projection lines with/without masks. It would be interesting to see these charts mapped to rents over the next year. Some states are in trouble.

The charts above are on country and state level. It would be nice to see on a city/county level. Does anybody have a good/trustworthy source to get these kind of charts for cities or counties?

0 Reply

Matt I.

Architect · Philadelphia, PA · Member since 2016 · 50 posts · 36 votes

6y

People move to cities for more than just employment. I grew up in a monotonous NJ suburb and my quality of life has improved dramatically living in a city. I'll try not to generalize, but suburban living exemplifies a lifestyle that people have been moving away from. No walkable amenities, traffic (cities have traffic, but you usually have the option to bike or take public transit), less of diversity and culture... Still living in my hometown at the age of 25 made me feel twice my age, and miserable. So I left.

As we possibly enter a second wave of covid, I wouldn't be suprised if more people left urban centers short term. But that's only because they can't reap the benefits of what cities have to offer. I don't think its going to change the hearts of artists, visionaries, and entrepreneurs who just can't get off on the unexciting, plain vanilla cone lifestyle that exists in the burbs.

The bit about digital nomads is also interesting, and I think supports the argument in favor of cities.

0 Reply

Robin Krieb

Real Estate Agent · Portland, OR · Member since 2019 · 36 posts · 9 votes

6y

Great points! I have to admit, as someone who lives in a major city, I kind of miss having a yard to go to reset/center myself a bit in nature during this pandemic time. I previously lived in the suburbs. But being a vegan, I do still enjoy ordering food delivery from my fave city spots.

Aside from myself, I know people who work in tech especially are now being given the chance to work from home more. But, to the point someone brought up about people vacating expensive cities to move cross country to cheaper cities, if they work remotely, they're often paid based on where they live, not where the company is located....so this might come back to bite them in the behind.

I suppose only time will tell. Will some city-based companies go back to having employees report physically to work? If so, this might keep people in cities versus having that time-sucking commute.

0 Reply

Eric James

Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes

6y

Depends what happens with the virus. If it disappears within a couple years all will be forgotten. If this sticks around as another perpetual virus (like the flu) there could be big changes. Not just because people can work remotely, but because they want to avoid highly dense population areas where drastic countermeasures are perpetually being implemented and /or people are tired of getting sick. Even a few percent decrease in the population of large cities could have huge ramifications.

1 Reply

Tanyal Bricthorn

Member since 2020 · 8 posts · 8 votes

6y

Has anyone mentioned the riots and looting? I doubt anyone is chased away by peaceful protests, but turning the cities over to anarchists would be enough to drive me out.

2 Reply

Mark Franklin

Glen Burnie, MD · Member since 2020 · 12 posts · 8 votes

6y

I believe cities will always be attractive to younger, single people. Young, single people are typically renters, and the age at which people are getting married is increasing, so the need to "settle down" is being delayed. Also I saw an article not too long ago that claimed many millenials who are buying houses, are doing so for their pets, and not necessarily for starting a family. So properties in the city with a small fenced yard could have a lot of potential.

1 Reply

Will people leave cities post COVID 19?

Will people leave cities post COVID 19?

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