It seems we’ve come to the “you’re lying, no you’re lying” phase of the fleeing San Francisco narrative, which was inevitable. To this point we’ve been tracking it via anecdote, story after national media story based on interviews with people who’ve left, followed by pointed (and maybe a bit defensive) rebuttals from local media who have just as much access to people who aren’t leaving San Francisco as the national people do to people who are. When everyone retreats to their neutral corners we’re left with the sinking feeling that there’s hype, there are stories, and there’s not much actual data that might tell us what’s really going on.
So here’s some data, and I’m going to be straight with you: It doesn’t look good for the “no, you’re lying” crowd.
The Bay Area Council Economic Institute wanted some answers, so they did a study that tracked job growth in major and minor U.S. metropolitan areas between December 2019 and December 2020. During that time, white-collar job growth has migrated away from places like New York City (a loss of 7 percent), Los Angeles (6.2 percent) and San Francisco (not as bad at 2.6 percent) and toward the darlings of the “America’s Next Hot Spot!” set — Nashville, Boise and, of course, Austin, Texas. These are high-paying jobs and the study doesn’t consider population loss due to full-time remote work.
The numbers definitely show a shift in where people want to work, but still, 2.6 percent? That and a quote from Jack Dorsey will get you 30 seconds on CNN, but how big is that actual impact?
Do you want bigger numbers, then? OK, let’s talk about a different dream, because the Austin dream, the one that gets all the ink, is only one of the dreams. There are other dreamers.
They’re the urbanites who’ve had it with all cities, not just ours; they imagine taking their Zoom calls against a backdrop of towering redwoods and they seek the kind of serenity that can only come with the knowledge that they can leave their car unlocked at night and not assume that someone looking for change will rifle through it before morning. Everyone in all of the New York Times “great migration” stories is moving to Austin, but if you believe Redfin, they’re only a small part of the story — maybe the most insignificant part.
Redfin did its own study. It tracked real estate markets in rural U.S. areas for the first four weeks of January 2021. During that time, pending sales in these areas were up 43.5 percent from January 2020 — 43.5 percent! Median home values were up 16 percent. Homes were taking 29 percent fewer days to sell and overall inventory was down by almost half: 44.5 percent. I’m not sure how the math works on this, but it seems like if you have a 43.5 percent increase in sales and a 44.5 percent decrease in listings and you’ve been sitting there in your Upper Haight flat imagining your spacious life in Nevada City, you’d better get going before there’s nothing left to buy.
“It’s literally a sold-out market,” said broker Pete Belcastro of John L. Scott on a recent episode of the “Southern Oregon Real Estate Show” podcast, “and I don’t know if it’s going to change anytime soon.” Full disclosure: The Oregon part speaks to me because last summer, in our own effort to find occasional refuge from the madness of city living, my wife and I bought a home in an Oregon small town. Six months later, it’s looking like we were pretty lucky to do so.
On that same podcast, Belcastro noted that the majority of remaining for-sale inventory is priced at $500,000 or above — the top of the local market. It can’t be long before they start doing the math and figuring out who’s buying these homes. So far — anecdotally — it sure seems like a lot of people just moved here from California.
Hopefully we’ll be well-behaved. A recent realtor.com story told a cautionary tale of ex-pat New Yorkers moving to tiny Rockaway, N.J., and bringing with them all of their boorish city habits: loud parties, late nights, poor pet etiquette and, of course, plummeting real estate inventory and increased prices.
Last week I asked my new neighbor, a local Realtor, about demand in rural areas. Her eyes turned into saucers. “It’s crazy,” she said. “Especially homes on acreage.” I swear she had chills.
So far — anecdotally — nobody where we bought seems too concerned about Californians or that the influx of post-urban dwellers will change the nature of their hometown. I hope they’re right because this place is fantastic, and if you think I’m going to tell you where it is, you’re crazy.
Larry Rosen is a San Francisco-based writer, editor, podcaster and recovering former Realtor. He is a guest columnist and his viewpoint is not necessarily that of the Examiner. The Market Musings real estate column appears every other week.