New York City and Silicon Valley have already reported population reductions as skilled workers who are now empowered to work from anywhere opt to do so. But will these changes stick? And will employees who can work for top tech and finance firms from anywhere choose to do so?
The Wall Street Journal recently reported on how the pandemic and remote work has reshaped America’s urban geography. Rural-sourcing, or hiring highly qualified workers who live outside of major metropolis areas, has slowly been adopted by finance and tech businesses across the U.S. over the past decade. The WSJ reports that a year ago, prior to the pandemic, 10% or less of the U.S. labor force worked remotely. Today, more than half of U.S. workers work remotely, Gallup polls state.
The article cites smaller metro areas including Miami; Denver; Austin, Texas; Charlotte, North Carolina; Nashville, Tennessee; Gilbert, Arizona; Boulder, Colorado; Bentonville, Arkansas; and Tulsa, Oklahoma, as attracting workers who can now work remotely, yet want a city vibe. Additionally, places like Bozeman, Montana, Jackson, Wyoming and Truckee, California, have gained the moniker of “Zoom towns,” where workers have relocated for the lower costs of living and the attractions of rural life.
Pew Research revealed that 5% of Americans had moved in the months prior to November 2020 solely as a result of the pandemic. In 2018, only 9.3% moved for any reason. Studies also reveal that remote workers tend to be more productive — with a report from Employment Hero finding that 32% of remote workers are more engaged at work, compared to 28% of office workers.
With lower costs of living, increased engagement and enhanced productivity, many firms and employees alike are hard-pressed to find a downside to remote work.
However, investors and real estate professionals should be prepared for a decline in rent and housing prices in what were previously consider major cities, as the work-from-home revolution unfolds before us.
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