DISCLAIMER: This article represents my personal views and not those of my employer or any affiliated organizations.
This year I’ll have driven east and west across the country twice. I’ll have visited over 23 states: California, Nevada, Arizona, New Mexico, Utah, Texas, Colorado, Wyoming, Montana, Idaho, Washington, Nebraska, Iowa, Missouri, Kentucky, Wisconsin, Illinois, Indiana, Ohio, West Virginia, Maryland, Pennsylvania, and New Jersey.
On a fateful night in March, immediately after returning from caring for my father (who was fresh out of the hospital) in Wisconsin, New York City was on the verge of a crisis. I narrowly made it back to New York for fear of a domestic flight ban, and here was NYC about to go into lockdown due to the virus crisis. So after just having been told nobody was going back to the office, we packed our bags, gathered as much as we could, and booked a flight to Palm Springs the next morning.
I’ve spent the last 8 months living on the road. It’s not something we’d expected to be doing this year, but it’s a pleasant surprise. I’ve been thinking about doing this for years, but kept waiting for the right chance to work remotely. The only limitation is that we can’t leave the country. So within these 4 borders, we’ve made the most of it.
A decade of cost of living increases in major metropolitan areas has exhausted urban residents, and often priced out new transplants. Those would-be transplants have settled on more mid-size cities that weren’t so prohibitively expensive. During the crisis, San Francisco has witnessed an unprecedented 35% drop in rent. The most high profile shifts recently have been Elon Musk‘s and Oracle‘s announcements that they’ll relocate to Austin, Texas. Another benefactor has been Miami, whose Mayor Francis Suarez has recently courted VCs from Google, Andreessen Horowitz, and others – ending the week with a discussion on the popular Clubhouse app. As much spotlight as that city receives, however, there are plenty of other areas that are making waves.
A recent U-Haul study catalogued which states their consumer base were making one-way moves to.
The list came out as follows:
1. Tennessee
2. Texas
3. Florida
4. Ohio
5. Arizona
….Continued.
As you can see here, Americans aren’t moving to any one place, and they’re largely avoiding coastal states (sans Florida). Middle America is going to see a boom like it hasn’t seen since WWII. Read more about that in my article “Why Are We Ignoring the Midwest?“.
What Are the Perks?
- Cheaper Cost of Living
The pandemic has resulted in an unforeseen real estate boom. Shortly after prices dropped in March 2020, buyers snapped up homes at a rate unseen since before the Great Recession. Note that those were permanent home purchases, not rentals. Mortgage rates continue to drop to record lows, even as we enter the new year. Will those buyers sell their homes and move back to the city when the pandemic is over? Highly unlikely. For the areas that benefitted, they will receive a longterm influx of commerce and development.
The real estate market will always have peaks and troughs, and with the next dip in the market, we may see even more buyers getting in on growth opportunities in those scattered areas. Think of it like an investment in a small, lesser-known company. They’re getting in at the ground level with a lot of upside potential.
2. Shifting Demographics
Any way you look at it, the country is more divided politically and culturally than in recent memory. A historic exodus of urban workers has rewritten the political landscape. This includes largely “blue” liberal urbanites moving to smaller “red” cities and states, as well as “red” conservative rural dwellers moving to mid-size cities with newfound opportunities. 2021 may look a lot more “purple” than any of us realize. And with that will come cultural shifts. We may find that mid-size cities feel a lot more like metropolitan centers, and that metropolitan centers become more focused on suburbs, much like how workers in San Francisco and Seattle have commuted to the outer reaches of their cities for work.
3. Decentralized Urban Areas & More Space
The “city center” is going to matter less, and we may see more compartmentalized “cities within a city” as the pandemic tapers out. Recent research has found that many companies realize the loss in time productivity and overhead they experience keeping an office, and mandating workers to take 1 hour-each-way office commutes. I recently wrote an article on the subject, “What Will Happen to Cities?“
With many post-pandemic return to office plans seeking to have no more than 50% of their workforce on-site at one time, that other half of the workforce needs to go somewhere. They’ll spend that time in their home communities, and hopefully will have everything in 15 minutes of where they live — Groceries, schools, shops, healthcare and more. Having a co-working space close to home can provide an in-person meeting space for much more intensive meetings. This can create the physical closeness with clients and colleagues we had before COVID, while providing socially distanced safety precautions.
4. “Work Anywhere” and Live on the Road
Services like AirBnB, Vrbo, HomeAway and other companies were some of the hardest hit by the pandemic. However, they’ve seen a surge in rural bookings. AirBnB’s remote area listings earned $200 Million in June 2020, a 25% increase from the previous year. One of their new slogans is even “Go Near”, emphasizing local travel. On our journey, we’ve stayed in these types of rentals the entire time.
While many have opted for mortgages outside the city, for apartment renters, the practicality of being tied down to a lease is just not there. Why have a set lease for a year, when you can live anywhere you want within the country for months at a time?
Conclusion
Being in a big city isn’t for everyone. Some love it, and will continue to. The biggest development of the past year is that now you have a CHOICE.
• Do you want to live in a big metro like New York or L.A.?
• Do you want to live in a mid-size city with more space to breathe, or for your kids to play?
• Do you want to take a “gap year” and travel without even having to quit your job?
Any of these options are yours. It’s 2021 and the year just started.
What are YOU waiting for?