There’s an old folk song originally by Pete Seeger where he asks Where Have All The Flowers Gone? Where Have All The Young Men Gone? Where Have All The Young Girls Gone? Although originally a protest song, the question of where have all the Young Men and Young Girls gone is a question that has been on the minds of real estate investors for the last few years. For several years now the US has seen some significant migration trends away from high priced coastal markets and into lower priced markets around the country. The current COVID19 pandemic seems to have only exacerbated this trend.
While San Francisco, Los Angeles, and New York were once the prime destinations for young professionals looking for an exciting career and a better life, these same places are now seeing huge net losses as young professionals struggling to get a start to their careers or start a family flee to states with lower taxes and a lower cost of living. I can’t say I blame them, as I’m one of them. The question on the minds of real estate investors has been and continues to be Where Have All the Young Folks gone?
COVID19 has brought a lot of changes with one of the most significant being the widespread adoption of remote work policies. Many companies have implemented complete work from home schedules with many claiming that they will not be requiring workers to return even after the pandemic is firmly under control. A new study by Upwork finds that anywhere from 14 to 23 million Americans plan to move as a result of this newfound location freedom. But where are they all going?
In February 2020, CNBC reported the ten cities with the highest net inflow of new people for Q4 2019. These cities were
Phoenix
Sacramento
Las Vegas
Atlanta
Austin
Dallas
Portland
Tampa
Boston
Nashville
In December of 2020, Bloomberg reported that the cities that have gained the most new residents between April and October 2020 were
Austin
Phoenix
Nashville
Tampa
Jacksonville
Charlotte
Dallas
Denver
Charleston
Seattle
While there are some changes to the list, we can see that the trend of migration away from many high priced coastal markets has continued with many of the top destination cities prior to the pandemic continuing to be hot destinations. At the same time that these cities have seen an incredible run up in population and prices, San Francisco and New York have seen staggering drops in the price of rents and real estate assets.
At the end of the day, I believe coastal markets like San Francisco, Los Angeles, and New York will continue to be economic and cultural hubs, however it’s exciting to see smaller cities grow as well and these migration trends provide a great opportunity for investors such as ourselves. Tomorrow is Christmas Eve, so I’ll end here by saying Happy Holidays to everyone. Stay safe out there!
Sources:
https://www.cnbc.com/2020/02/20/americans-fleeing-expensive-us-cities-and-moving-to-these-affordable-places.html