Tech Workers Are Leaving Expensive Coastal Cities
As tech workers realize they don’t need to physically be in SF or NYC, cities like Raleigh, Denver and Charlotte will continue to see growth.
It's already apparent that the COVID-19 crisis has triggered lasting change in home buying patterns. The biggest change is the acceleration of outmigration from expensive coastal cities among young professionals — those 25 and over.
Here are four reasons why:
1. Remote work is becoming the new norm
What was once a sought-after perk by workers (before the COVID-19 outbreak, only 7% of workers in the US had the benefit according to the Pew Research Center) has swiftly become the norm, as city and state-wide lockdowns became policy. Employees had already been increasingly looking for roles that allow them the flexibility to work remotely in order to achieve a better work/life balance and that’s unlikely to change now that the lockdown is lifted. In fact, the outbreak expanded the pool of employees that demand more flexibility.
While there are many experts cautioning against the assumption that telework will become mainstream, these last few months of continued remote work will have a lasting impact on the standard of work, including for employers. Given the economic impact of the lockdown, employers will be looking to cut costs and getting rid of a major drain of resources like office space in prime locations like SF, NYC, and LA will look increasingly attractive. Employers will be incentivized to allow the employees already working remotely to stay remote and will be more open to hiring outside workers in labor markets they’d previously overlooked.
2. Emerging cities are embracing tech workers
Cities between the coasts have long tried to attract tech talent by touting their low cost of living or quality of life as a counterpoint to their more-populous peers which continue to struggle with a lack of affordable housing and traffic congestion. There are also a growing number of tech entrepreneurs and venture capitalists — early adopters — that have already moved and are trying to make it work in nascent cities, citing the benefits of being able to own a home, being closer to family and having a better work-life balance.
It should come as no surprise that an area like the Research Triangle, the North Carolina region comprising Chapel Hill, Durham, and Raleigh — has seen a rise in tech companies flocking to the region as investors and a hyper-educated workforce (it’s home to Duke University, the University of North Carolina at Chapel Hill, and North Carolina State University) make it an attractive city.
3. Being quarantined in a tiny apartment is making people dream of bigger spaces
When the coronavirus hit, the average rent was $4,210 in NYC and $3,700 in SF for a 1 bedroom/1 bathroom apartment according to RentCafe. That monthly rent for that amount of square footage is looking like a pretty bad deal for people who had to stay quarantined in their apartments for weeks on end.
It should come as no surprise that people are dreaming of a bigger space now that the lockdown is over. Combined with the newly-standardized policy of remote work, people are beginning to wonder whether they really need to be in NYC or SF at all. That’s when those emerging cities are going to look mighty attractive to these workers.
4. People want to own a home and they realize it’s nearly impossible in big cities
It’s become increasingly clear that even with the greater wealth in these urban centers, tech workers in SF and NYC are less likely to be able to purchase a home than in cities like Charlotte, Columbus, Austin, Salt Lake City, Phoenix, Denver and Raleigh. The average home prices in up-and-coming cities like Charlotte (302,570), Austin (540,086), Phoenix (340,341), Denver (529,269) (340,303) and Raleigh are bound to be attractive compared to New York City ($657,545) and the astounding San Francisco number ($1,463,979).
Coinciding with the last three trends, it makes sense that tech workers will be part of a growing subset of folks looking to move away and buy a larger, more affordable home in cities that are trying to woo them. Up against the skyrocketing housing costs, pricey child care, the crowds and relentless traffic of cities like NYC, SF, and LA, the attraction of a larger supply of houses in a sparser area will continue to appeal.
The circumstances for why people will need to move, couples getting married and needing a starter home, a family welcoming a new baby, or needing more space for elderly parents, are pushing many people to feel frustrated at the current competitive market, but perhaps there’s a new option for people that need a new home — designing and building it from the ground up.
As these tech workers continue to realize that they want to remain remote and that they won’t need to physically be in SF or NYC, cities like Raleigh, Denver and Charlotte will become more attractive.
Tech workers are used to using technology to upgrade their lives in a variety of activities like grocery shopping, car buying and even buying homes. It was only a matter of time before technology aided the process of homebuilding — from buying the lot to choosing a floor plan and being able to work with and communicate directly with builders and architects. This is where Atmos comes in — a startup that allows you to design and build your home through one platform seamlessly and easily. Click here to get started.
