The great COVID migration

You may have read conflicting articles about the mass “COVID migration,” in which big cities are seeing people flee to more affordable areas in the midst of the pandemic. As far as I can tell, those claims are a little bit exaggerated, even if the Bay Area as a whole is still seeing people leave.

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For example, this Bloomberg article tells us that fewer people are leaving big cities overall since the beginning of stay-at-home orders, even if interest in moving is rising again. That said, some big cities (namely New York City and San Francisco) are getting more out-migration than most…and many of those people are migrating towards other large cities like Seattle and Los Angeles!

This does seem to mean that some suburbs and more affordable large cities will likely see home values rise soon. Even if young adults are leaving certain cities, they typically are not doing it because of that city itself, but because they want to try another big city out!

And though it may be true that large corporations, including some based in Silicon Valley, are leaving California for cheaper pastures like Texas, there’s very little indication that it has anything to do with desirability in our state as a whole. While cost is definitely a factor, the rise in remote working during COVID has definitely prompted people to leave the Bay Area at a higher rate.

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So what does this all mean for you? If you live in a San Francisco condo, it means prices have dropped about 10% per sq. ft. Rents have also dropped, but the younger folks still gravitate to the city, so if you don’t have to sell right now, maybe wait. If you have been renting at the cities high rent rates and shelter in place means you are about to strangle your family as you need more space, then people are looking to the east bay where prices less that is a relative term – they are less then buying in the city and you get more space. The people who are moving out of the city to Walnut Creek or Sacramento, are driving prices up willing to pay in cash over the appraised value, because it seems relatively cheap or cheaper for them. If you currently have a condo in the east bay, they are sitting much longer. This is because rates are so low, and with no HOAs to pay, people qualify for a house, maybe not in the city they originally wanted i.e. Walnut Creek, but can get on in Concord or Brentwood. This is happening all over the United States. Austin TX, for a second year in a row has the hottest housing market in the country. I have seen friends that are retiring move out of California to TN, ID and Nevada. Having said all that the Bay Area remains a very attractive area to home buyers, and even with a slight uptick in move-out traffic, I don’t expect that to change anytime soon! As a side note, I do think California will need to get friendlier towards attracting and keeping business’s in the bay area and address the rising homeless population especially in San Francisco.

Silicon Valley: Moving East?

I came across a very interesting article in The New York Times recently about Silicon Valley attempting to find fertile ground in the Midwest. It’s a fascinating look at how the real estate market in the United States is rapidly changing.

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For example, Amazon is looking for a city to place its second headquarters. That is going to lead to a massive shift in where large tech companies start looking at places to re-locate. It’s well known that California is in a real estate a bubble. Silicon Valley, especially, is one of the richest areas in the entire country – if not the world – and one move could shake up a local economy in a huge way.

I think trying to replicate another Silicon Valley would be difficult; it is like the perfect storm – top-notch universities, a port, three international airports, the gateway to the far west and great weather. However, companies will look for more affordable areas to do business and states that provide tax incentives (think Tesla in Nevada). It doesn’t mean they will ditch the Bay Area completely.

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You know things are crazy here when even the tech elites in San Francisco are tired of San Francisco. They say it’s “congested” and “expensive” in the Bay Area, and are apparently mesmerized by the affordable homes and real estate in the Midwest. If you live in the Midwest I wonder how many hip spots would there be, not to mention the possibility of snow…what are your thoughts?

Moving? Save a tree!

Are you planning to move soon? Already initiating that process? Then you know you’ll need an endless supply of cardboard boxes to get the job done!

According to RecycleSmart.org, the average home move requires 60 cardboard boxes, or more than half of a one-ton pine tree. So, make sure when you’re done with your move that you recycle those boxes in the proper can. Don’t leave them in the regular garbage can, and only compost them if they were food boxes with grease that can’t be recycled.

Cardboard can be recycled over and over again, and you can even leave tape and labels on them to make the process easier. If you really want to save space in that recycling bin, break down each box so they’re flat.

Again according to RecycleSmart.org, the average person moves 11 times, which is about six trees’ worth of boxes. If you recycle those, you can still get the job done and save a few trees while you’re at it!

For more info on recycling cardboard and to order a bigger recycling bin at no charge, visit www.RecycleSmart.org.