Long term ramifications on Bay Area Real Estate and Economy (San Jose: sales, rentals)

[Dave Coe]

Interesting to see what happens as more tech companies like Twitter will allow their employees to work from home and if other companies will follow Tesla out of the state.




"Tech Workers Consider Escaping Silicon Valley’s Sky-High Rents

After major companies announce their employees won’t need to come in, many are recalculating the cost of living near the office."

https://www.bloomberg.com/news/artic...t=businessweek

[ssmaster]

Yes tech companies may find computer scientists in India or China who will work for a quarter of what they are paying now. A win-win for stockholders. Workers not so much

[CorporateCowboy]

Originally Posted by Dave Coe

Interesting to see what happens as more tech companies like Twitter will allow their employees to work from home and if other companies will follow Tesla out of the state.

Actually, in all likelihood, Tesla will not be leaving the state; there has been discussion all along (prior to Elon's recent tweets) in re: adding another plant to produce the new cybertruck pickup and Model Y. In other words, he's ultimately looking to expand, not replace or 'move'. Allegedly, it's between Tulsa and Austin; my guess would be Austin based on previous reports.

[Netflix]

There are lots of moving parts:

airbnb rentals now on the long term rental market
governments laying off employees and cutting services.
vacation rentals coming on the long term rental market and sales market.
add in the tens of millions who have lost jobs and the additional people who will loose there jobs (many of these people will have no choice but to move to stretch their savings).
plus other stuff I have not thought of.

With all this happening nationally, I'd guess we're looking at reductions in real estate sales and rental prices nationally. Houston is going to plummet for sure with all the job losses in the oil industry.

Some companies, just like the laid off people, will leave the bay area to cut costs in an effort to survive. The financially strong one aren't going anywhere but they will be cutting costs too.

[Dave Coe]

https://www.linkedin.com/feed/news/s...xodus-4112561/

"The looming exodus isn't just happening in San Francisco — many people in crowded cities are eyeing moves to less densely populated areas amid the pandemic. A new Zillow-Harris Poll survey found 66% of people teleworking would consider moving if work-from-home flexibility continues."

[Vision67]

Originally Posted by Netflix

There are lots of moving parts:

airbnb rentals now on the long term rental market
governments laying off employees and cutting services.
vacation rentals coming on the long term rental market and sales market.
add in the tens of millions who have lost jobs and the additional people who will loose there jobs (many of these people will have no choice but to move to stretch their savings).
plus other stuff I have not thought of.

With all this happening nationally, I'd guess we're looking at reductions in real estate sales and rental prices nationally. Houston is going to plummet for sure with all the job losses in the oil industry.

Some companies, just like the laid off people, will leave the bay area to cut costs in an effort to survive. The financially strong one aren't going anywhere but they will be cutting costs too.

I'm interested in the effect because my kids live in the Bay Area. It seems to me that this pandemic will not have a big negative impact on houses that cost $1M+. Service workers impacted don't own that type of property.

Actually, it might increase demand for housing in suburban areas, e.g. Walnut Creek because if companies allow mostly telecommuting, there will be less need to get into the city for work. Indeed, people might want bigger houses to flee the city and have room for 2 offices.

[Electrician4you]

Originally Posted by Netflix

There are lots of moving parts:

airbnb rentals now on the long term rental market
governments laying off employees and cutting services.
vacation rentals coming on the long term rental market and sales market.
add in the tens of millions who have lost jobs and the additional people who will loose there jobs (many of these people will have no choice but to move to stretch their savings).
plus other stuff I have not thought of.

With all this happening nationally, I'd guess we're looking at reductions in real estate sales and rental prices nationally. Houston is going to plummet for sure with all the job losses in the oil industry.

Some companies, just like the laid off people, will leave the bay area to cut costs in an effort to survive. The financially strong one aren't going anywhere but they will be cutting costs too.

Air Bnb will come back. Just like Hotels. In fact 8 bet AirBNB will be even better as hotels will cost even more. Some people may curtail their vacations but eventually people will still go on vacations. They may want or demand the host/hotel have a guarantee of disinfecting the unit.
Social distancing may be a whole new market.

[Dave Coe]

Originally Posted by Vision67

I'm interested in the effect because my kids live in the Bay Area. It seems to me that this pandemic will not have a big negative impact on houses that cost $1M+. Service workers impacted don't own that type of property.

Actually, it might increase demand for housing in suburban areas, e.g. Walnut Creek because if companies allow mostly telecommuting, there will be less need to get into the city for work. Indeed, people might want bigger houses to flee the city and have room for 2 offices.

Walnut Creek is fairly expensive with a limited supply of new houses.

The issue will be whether it is complete remote work or semi.

If it's complete than you will likely see an exodus out of the Bay Area to cities like Boise, Portland, and Austin with the greatest decline in inner ring suburbs plus more outsourcing abroad.

A replacement of H1Bs with outright outsourcing.

If it's semi you'll see workers moving from San Jose to Gilroy or from Oakland to Benicia.

[vunderbar]

I really believe that deep down employers don't like WFH. All too many of them feel if their workers aren't being actively supervised, they're not working. Some segment of tech workers will stay at WFH... but in the corporate suite, all that infighting, politics, brown-nosing, back stabbing, and ladder climbing is most effectively done in person.

I think once the covid thing subsides, more workers will return to offices than is predicted... return to gauge their competition, see and be seen.

[CorporateCowboy]

Originally Posted by vunderbar

I really believe that deep down employers don't like WFH. All too many of them feel if their workers aren't being actively supervised, they're not working.

People who are able to WFH are typically white-collar employees; it's not a factory or warehouse where 'supervisors' are supervising, lol. In fact, it's more than common for many to not even work in the same building (or even the same state) as the person they report to.