Pending Home Sales Up 30 Percent in San Francisco, But…August 13, 2020
Having bottomed out at the end of April, at which point they were down nearly 50 percent on a year-over-year basis, the number of homes in contract to be sold started to rebound in May; turned positive, on a year-over-year basis, back in June; and were up sharply in July.
And in fact, pending home sales activity has been up around 30 percent over the past two weeks on a year-over-year basis, which should result in strong August sales figures and reports.
But as we noted last month, at which point pending sales activity was up closer to 40 percent on a year-over-year basis, the rebound in “pent up” sales activity appears to have already plateaued. Year-to-date sales remain down. And with “pent up” supply continuing to outpace “pent up” demand, listed inventory remains at – or above – recession-era levels in San Francisco.
Comments from Plugged-In Readers
From what I see and hear, people are buying in this pandemic, as they realize (or ration to themselves) its a temporary blip and a good time to get in. Folks who I think smart are doing this. Next year at this time, the economy will be stronger than ever, at least here locally in SF. There will be more IPOs and more pent up demand in 2021. Prices and rents will not drop, and like increase marginally, I suspect. It is yet too many high paying people with stock options and not enough housing. The average City employee makes more than any other US City employee, so this is not too surprising.
Also, renters in a financial position to buy might see the pandemic as a signal that they need more control over their home environment, where much more time is being spent.
This renter in a financial position to buy sees the pandemic as a signal that I should continue renting to preserve flexibility and mobility in an uncertain environment (plus the pricing disparity heavily favors renting over buying right now for my preferred neighborhood/unit type).
agree. i’m not a renter, but if i were, i certainly wouldn’t buy right now. prices are going to drop when the stock market eventually gets hit (no matter who wins election). and if the situation gets worse, its easy to pick up and leave. not to mention, if the new flurry of taxes on the ballot in SF this fall all get passed, it might be a reason to go anyway.
sure, housing prices could crash. stock prices could crash as well. However, if they go up 30% and then correct….is that a crash? Deep thoughts.
For some of us, non-financial considerations are also important. I was a homeowner in the 90s and rented for many years before buying again last year. I am very glad that I did and it wasn’t about money. The rental market got so tight that landlords had become overbearing. Maybe some of that power will move back to the tenants now but I don’t intend to be in that position again.
Completely agree – I could afford to buy an entry-level (in the Bay Area – or a manor house in the rest of the country…), but have no desire to do so. Sure I’m working now, but will that continue? Will the economy implode again / further (perhaps due to lack of stimulus), and suddenly I find myself without a job? Perhaps the economy will tank so much that the house I’d buy would lose value too (and I’m unemployed – now having to short-sell and ruin my credit)….
No thanks. I’ll take the risk that in a year or two I’ll be saying “shoulda, woulda, coulda” – while still having a lot of liquidity in the bank – than to put that liquidity into a 30-year wallet-emptying commitment that could turn south on me at any moment.
I wouldn’t be so sure that this is just a temporary blip. Pre-COIVD it already looked like were were on the backside of the economic cycle. Population gains had been trending down for a while and net migration already went negative. Prices had already peaked. And this was well after the Lyft/Uber IPOs which although were very large in size and very hyped up ended up having little impact on the market. SF City employees are very generously paid, but every indication is that this pandemic is absolutely devastating municipal budgets.
And I do think the economy will eventually recover, I don’t think it will be quick. Ever if there were a vaccine today I think it would take many years to fix the economic damage done so far. This has gone on so long it’s also changing people attitudes on urban living, density and financial risk. Those changes are going to last for some time.
1) City employees aren’t the major buyers of SF real estate.
2) ‘Rents will not drop,’ rents literally are dropping.
3) ‘Momentary blip,’ we are talking about the greatest shock to the global economy…EVER.
4) Remote work depressing demand for housing in metro centers.
Buying 3 months from an election as the country goes into an recession is not my idea of smart.
Actually, if Biden/Harris win and Democrats retake the Senate, I think there is a good shot that SALT gets repealed and then people will be able to fully deduct their income, local/state taxes, plus mortgage interest up to $1M. This would be a huge boost for homeownership. Of course, that’s a big ‘IF’, but could very well happen.
Also, remote work isn’t what it cracked up to be. Routinely I hear complaints from colleagues, I “miss in-person interactions” or “let’s do a hybrid solution of part work from/home part office” once time return to normal. So the notion of everyone is going to work from home forever is silly and will have to commute to the office sometime. That and if you work for a large corporation or tech company, you’ll be completely invisible if you’re hiding behind a screen. Career advancement doesn’t magically appear without in-person interaction and relationship building.
I think the SALT deduction is a very minor issue in the economic landscape. The stimulus & foreclosure/eviction stays are the big deal. It’s frankly shocking the level of rent declines and migration even with those in place and I think there is going to be another leg down when that ends.
Right now there is rare bi-partisan motivation to keep the stimulus going. Trump/Republicans don’t want to let the economy get any worse because they believe it will hurt his election chances. Biden/Democrats see that they are ahead in the polls and are clearly pursuing a strategy of running out the clock while avoiding doing anything with negative consequences. They might not be helped if the economy were to fully recover before the election, but they certainly don’t want to be seen doing anything to make the economy worse such as blocking further stimulus.
After November no matter who wins I think much of the political will to keep up the stimulus will evaporate.
Just to clarify, I think SALT deduction is important for San Francisco, given the prices of homes (e.g. mortgage amounts) and the tax benefits of not being able to deduct full income tax (plus property tax). High income and skilled workers are losing money, which could otherwise be recouped. The SALT issue is definitely not the most pressing one nationwide, but I think CA, NJ, MA, CT, NY, etc. all pay higher taxes than everyone else, and I could see democrats pushing this forward given the massive voting block.
Do you have stats on foreclosures in SF from March to current? Is there an uptick? I ask this as a question because really how many are at risk in SF? More curious about the trend. Most definitely fixed-income people in SF are likely the most vulnerable, while those with stable jobs aren’t…
I’d be looking at missed payments now, not foreclosures. My understanding is that its a minimum of 180 days of missed payments before there is even a Notice of Trustee sale. And with the federally mandated forbearance for Fannie/Freddie loans and voluntary forbearance by some private lenders that further slows the path from distress to foreclosure. I think it will be at least a year+ before we see many COVID related foreclosures hit.
Someone posted this the other day showing missed payments for CA as a whole, but I haven’t seen the equivalent broken down at the city/county level. It was explained to me that the Census data that this article is based on excludes mortgage payments made by investors. Only rent payments by renters and mortgage payments by owner occupiers are counted. I don’t know where you would get the missing data regarding the % of payments on investment property are being made vs missed. In a city such as SF with a high proportion of non owner occupied housing, this data might be very relevant.
Foreclosures since the pandemic are all down a lot because of the moratorium on unlawful detainers/evictions. No bank wants to be seen pushing borrowers out at this time. Even if one bought a home through a foreclosure sale, he/she would not be able to take possession given the moratorium.
Yet borrowers are falling behind and we are no doubt developing a backlog of defaults, so there will be a reckoning.
Will Biden and Harris support widespread protection for people with $1mm+ mortgages while half of America is scrounging for the next hourly job? Doesn’t sound like woke America. But it does sound like politics as usual, a hallmark of the Biden compromise.
The Democratic party will NEVER allow the SALT deductions back in, which primarily benefit the rich. They will want that money spent on their pet causes, not handed out to rich homeowners and people making $100K+ incomes living in high income states.
This is just wishful thinking by delusional realtors. SALT deductions are old Democrat thinking. The younger Democrats will allow that money to be handed to the rich over their dead bodies.
Hey, Nancy and Chuck (top dems) both have asked for it in the latest relief package! Also, Gov. Coumo has been trying to figure out a workaround. I don’t think it’s too delusional since they publically saying this.
Maybe someone like AOC doesn’t want it… but she is certainly not mainstream.
People making $100K in San Francisco don’t care about the SALT deduction anyway because they can’t afford to buy a home. SALT will go back in, in some form (they may maintain a ceiling, now that they have the cover to do so), as its absence hurts blue states too much. It’ll just be offset by higher marginal rates on very high incomes (as it should).
3) ‘Momentary blip,’ we are talking about the greatest shock to the global economy…EVER.
EXACTLY….. the economy shrunk more than 30% last quarter, and its not like this is over!
You can’t honestly think the economy next year at this time will be stronger than ever. We’ll be VERY LUCKY if there is vaccine available to non-essential workers at this time next year.
It depends on which parts of the economy. Tech and healthcare will be fine. Retail… maybe not so much.
you sir are incorrect, the economy will not be booming next year. it will be worse off.
Worried about going back to the 70s in terms of crime and out of control drug abuse, 20% increase in homelessness, huge encampments now that are going to be hard to encourage to disband after the pandemic and bankruptcy at both city and state levels shutting down essential services for us. Biden Harris is our only hope but what if they blow it like Hillary by being overconfident. Worst case scenario could be a military coup and Trump clearly has paid off them as much as possible. I own a home but I’m really worried. Also public housing plans. What if someone tears down Sunnydale and move the needy residents nearer to the city core/services and Trump’s next golf club goes in there (buying out Glen Eagles) with posh shopping center in demoed Cal Palace.. Don’t laugh, it could happen in the totalitarian future if we don’t get this thing under control in Washington DC with eyes on getting a under stress deal on our “valuable real estate”. Plan for a hard fight ahead the next few months.
You are right to be worried. I think homelessness is going to increase more than 20%, though. And yes, the huge homeless encampments will be hard to dislodge now that S.F.’s landlords are on their way to being able to kick people out onto the street with reckless abandon like there was never a pandemic.
Love the optimism but it’s frankly naive to think what’s happening in SF won’t effect our local economies for years to come. You can’t shut down small businesses for 6 straight months (& counting) and tell already mercenary Tech workers they can work remotely & expect them to stay in the most expensive place on earth while all services and advantages of city life are literally evaporating everyday.
Not to mention our city is being run by inept criminals with no background in running or supporting local businesses. As much as I love SF, and I truly do, we are an absolute laughing stock around the country; throw in a massive increase in homelessness that’s now overtaking neighborhoods outside Mission & Soma and we’re about to feel & hear a very loud and familiar sound- yet another bubble bursting!
Am curious about the demographics of the buyers. Your theory seems to be locals trading up and/or first-time buyers (probably local renters) getting in. Foreign buyers seizing the opportunity?
I am tempted to buy too, but I am not so sure of a speedy recovery in real estate… Those that got hurt in this pandemic will take years to build back up, not overnight…..
Pending sales can increase when banks take longer to approve loans or people need to sell one home to buy another and that home isn’t selling.
Weekly listings to weekly sales had been running about 2:1, but this week jumped up to 3:1, with listings increasing and sales falling. One week does not a trend make, so take that for what it’s worth.
And although Realtors are always quick to point out that “no one has a crystal ball” when prices are falling, their near-certain visibility into the future of the economy and the potential for a vaccine are amazing.
I have to agree with you here. I also believe this year we sill see inventory levels creeping up in the fall breaking the typical seasonal pattern of shrinking inventory levels.
While inventory levels usually drop in August based on seasonal patterns, they typically increase, not shrink, in the fall and peak in October.
Large inventory thus wider selection of homes. Slightly pentup demand due to spring pandemic restrictions. Apparently enough people with stable finances and longterm plans to stay in this part of Bay Area to go shopping and maybe finally see something worth spending on within the inventory. Not sure how long it’ll last though. There will still be unsold inventory, and the medium/long-term economic repercussions are still unknown, so I think prices and sales will trend down a bit, but as for a year later, who knows. World population is still growing.
Tech is one sector not suffering during this pandemic. Restrictions like this probably would not be possible if not for the Internet allowing people to work/school/shop/doctors appt from home, though I guess maybe it could’ve still been possible in a world with wired telephones and fax lines. “Dear Sir, I am writing this letter to inquire if there may be any returns upon the funds I submitted for the transatlantic voyage to London earlier this spring.” “Dear Sister Lizette, the educational packet you sent us last month was quite delightful, and my children’s learning is proceeding as best as can be, given our trying circumstances.”
Reasons it will rebound:
1) SV investors do business locally. Startups will have to go to them, not the other way around.
2) There’s no such thing as “work from home forever” if half the company goes back to an office. Decisions are going to be made without you.
3) Strong networks are fundamentally important to startup culture. You’re not going to build a strong network or attend a great talk in Nebraska.
Taco is right here. We’ve disagreed in the past, but Taco is on-point here. Buying a place in Tahoe/Petaluma (especially at these values) and planning to permanently work from home is the express train to nowhere. It’s working OK right now, but in 6-18 months you’ll be forgotten. We’ll have an effective enough vaccine, and the Silicon Valley/SF hard charging type A’s will rush back to the offices for power moves. Sure you’ll still have your job in Tahoe and might even get to keep your salary. You’ve said to everyone, “I doesn’t matter where I live as long as I get my work done.” Congratulations, you’re now a cog with zero value add. Prepare to be left out of decision making loops (and hence, promotion hype). You’ll sour on the company or they’ll sour on you and ways will be parted.
Now what? Well, you’re just a cog. You just did your work but nothing spectacular that made you stand out. You’re now in competition with engineers in Austin, Minneapolis, and Ukraine for outsourced cog work. Is that why you moved to SF/SV in the first place? To be a cog?
Everyone in higher ed knows that locality and proximity are major catalysts for learning and making big leaps. It’s the same way in the workplace. Megatech has enough of a monopolist advantage in all of their spaces that they can coast by on sub-par execution for the next 6-12 months. They know where things were, where they are, and where they could be. They’re champing at the bit to recall everyone because they know fast moving startups could chip away at their soon-mediocre moats. No megatech company is really killing it right now. They’re just managing and waiting for things to return like the rest of us. Right now, tech companies are about as efficient as your kid’s school Zooms.
You cracked me up with that school zoom comment !!! But you are 2000% correct…
As a upper middle manager in “mega tech” with 2 high schoolers at home now, I don’t see how companies can survive with this work from home thing…. they will have to call employees back the minute there is a vaccacine
And then there are the “hard charges type A” who can’t wait to go back to office and power grabs
What you are missing is that the majority of workers in these mega-tech companies are already cogs. Every company has a small cadre of superstars, but for the bulk of workers their costs to the company are always at the forefront. Every time the economy has hit a rough patch corporate America has responded with a wave of belt tightening. Layoffs, outsourcing, offshoring were the tools of past downturns. And megatech is very much corporate America, their startup days are long gone. Companies will surely use some of those tools this time around, but WFH is emerging as one of the best alternatives. For the small fraction of workers being groomed for leadership roles your points about WFH vs getting face time makes sense. But the majority cases will be comparisons of WFH vs other cost cutting alternatives. People talk about communication issues with WFH, but compare that to offshoring. Offshored workers were often in very different time zones, with language and cultural barriers. Often they were not even directly employed by the parent company with CYA and voluminous contracts replacing the spirit of collaboration. Misuse and leakage of IP was common. Yet in spite of all these problems outsourcing still happened on a mass scale because the cost savings were irresistible.
WFH is providing a middle way with costs much less than on site SF/SV, though still more than offshore. But the employer employee relationship is maintained, with both parties under the protection of US law and existing team relationships are maintained.
The Facebook article said they are currently operating 95% remote. The amazing thing is how well things are working at that level of remote. No one expects 95% remote to be the norm, but going to 50/50 as Facebook plans would still be a significant change. And its hard to believe that even 50% of workers are either critical to have in the office or are being groomed to move up. These companies have a lot of cog work that needs to be done. Someone who does nothing spectacular is not suddenly going to become a superstar programmer when thrown into a SV cubicle pit, they will simply be a nothing spectacular programmer with a high price tag.
The schooling though is the real issue. Anecdotally schooling/child care is by far the biggest issue with WFH. You can WFH fine, some can home school. But doing both is killing people, particular with two working parents. Where/when schools open is going to be a key thing to watch for.
You are missing a big point here – offshore workers are $20K year, take it from me as a finance director in a megatech. Your WFH workers are still costing companies $200K a year. So, no, WFH is not an alternative to outsourcing until companies can bring the salary (and bonus, and RSU) down to $20K.
Will it happen and will it be a good decision in hindsight are two separate questions. All the questions about WFH regarding communication, collaboration and talent pipeline were also raised about outsourcing/offshoring. But none of those issues prevented it from happening on a mass scale. As it turned out, the cost savings from outsourcing were gigantic, but so were the problems.
WFH is a middle way. You are right that the cost savings will not be nearly as dramatic, but neither will the problems be nearly as big. And right now there is a forced experiment going on with nearly everyone doing WFH. No need to theorize about what will and wont work, experimental data is coming in every day.
Of course every company is in a different situation and will make decisions accordingly. I’m sure Apple knows exactly how much profit they stand to lose if a new phone rollout is delayed by a few months. But will Google’s fortunes in the cell phone market change much if their new phone slips by a few months? With Uber losing almost $2B in a single quarter do you think their most pressing concern is making sure some new app feature doesn’t slip its ship date? What game changing technology do restaurant & travel sites have in store to offset the massive decline in revenue? Did Yahoo’s fortunes improve when they called everyone back to the office?
It’s a myth that you can always (or even most of the time) innovate your way out of any business problem. Cost cutting provides a real and immediate improvement to the bottom line. Innovation sometimes works, but results are slow and unpredictable. Time and time again corporate America has show a preference for the immediate tangible path of cost cutting.
It is abundantly clear by now that things are not going back to where they where ….
You are ignoring the fact that the Bay and Sili Valley have worked off of an ‘infinite growth’ model which was both unrealistic and unsustainable. An example discussed around the world …
For the next year or two, there will be v little local business activity in person.
And all the great talks are online now … not to mention tech advances (not even out of Sili Valley) supporting remote work, collaboration, meetings, conferences. Plus most work was already distribute geographically, we are all just getting that much better at it.
Lastly, speaking to the unsustainable model, SFUSD already had a 150M$ deficit before COVID. The municipal budgets will be feeling lots of pain, much as the rest of the country – but poorer regions will get much more help from fed and state, jumbo loans included.
Despite their huge $$ commitment to SV campuses (and in the City), both Google and Facebook are already committed to being closed until July 2021. A savvy employee would have rented a place in any state income tax free state for more than six months in both 2020 and 2021 and increased their high-bracket income by > 12%. Not a bad reason to change one’s scenery and try a new market.
To the comments about now being a good time to buy… I don’t understand that at all. Reports all over about rents being down 10% just in the past 2 months. It was already a losing proposition to buy vs rent at market rate before SIP. Repealing the SALT deduction will help but not enough to cover the spread – and it certainly feels like it’d be foolish to bank on one’s property value making up for it in appreciation anytime soon.
So here is the thing about your comment on being savy. There is one technical issue with this, what is FB and Google’s guidance on taxes and income. If their payroll/HR system is all fired-up and ready to go to pay different tax rates in each state, then sure everyone can work remotely be paid to accommodate this. However, that also means they can reduce your salary to the market rate that you work in. So if you move to work remotely from Austin that means your salary (as average engineer) from $150K to $80K. I’m not sure I would necessarily want to take an $80K pay cut.
Suppose if it’s a permanent move the company could take that approach. I think under these circumstances, if an employee was changing their primary residence location while we dealt w/ SIP/Covid… maybe bc they could use help from parents/friends in another city while they worked from home for the next 12 months… I have a hard time believing a tech firm would take such punitive action as you describe. Maybe after offices reopen and the employee then declares they are not coming back it could be a different story.
Besides, and I don’t know the answer to this, but isn’t state income tax dependent on how you declare it on your tax returns – not where the company declares your residence to be as they’ve been paying you? Meaning, if you could prove to the state of CA that you moved and lived in another state for > 6 months of the year, then they would have to comply w/ your tax return status?
I know CA will do everything in their power to prove against you including making you provide air travel receipts, utility bills, leases/mortgage statements, credit card activity, etc. but presuming you had that, how could they deny it?
Isn’t the point of a lot of people on this thread is that move is “permanent” and hence why there won’t be a quick rebound in SF? If you’re saying it’s not permanent then everyone will be coming back to SF within the next 6-8 months which means rents and home values continue again on their trajectory upwards.
I think if you declare your residence outside of CA when you file your taxes, but your employer has been paying taxes for xyz months in CA, someone will red flag this. Then the new state would ask for taxes for your wages too because you are making that declaration. Again, this really complicates things.
I’m pretty sure CA would go against you because we are running a tax deficit and they need a windfall of cash to make up for the gap.
Right now the majority of tech companies are on a hiring freeze indefinitely. I don’t see drastic changes there in the next 6-8 months. While tech is big in SF, it’s not the only industry. Law, finance, engineering, transport, hospitality, energy are all getting hammered. The only reason there has not been massive layoffs is the CARES government stimulus package. When that ends this fall we will begin to see more layoffs including high income earners. And somehow we are going to see SF real estate prices surge in this environment? No.
@Anonoly, that’s patently not true. Most places are definitely hiring, and hiring at the same pace they were before. The covid19 hiring freeze has long since thawed.
Also, FB said they would reduce pay:
“And those who choose to work where the cost of living is less should expect to be paid less.
“That means if you live in a location where the cost of living is dramatically lower, or the cost of labor is lower, then salaries do tend to be somewhat lower in those places,” Zuckerberg said.
Facebook already pays based on location, but Zuckerberg said employees working remotely must notify Facebook if they move to a new area before Jan. 1, 2021.
“We’ll adjust salary to your location at that point,” he said, noting it will be necessary to take taxes into account. “There’ll be severe ramifications for people who are not honest about this.”
Wouldn’t be surprised if other Tech companies follow suit.
You seem to have conveniently missed the part where FB said they expect long term that 50% of employees will be remote:
“We’re going to be the most forward-leaning company on remote work at our scale,” Zuckerberg told employees in his weekly staff Q&A session, which was publicly posted on Facebook.”
“Zuckerberg said Facebook will “aggressively” ramp up the hiring of remote workers, though not all employees would be allowed to permanently work from home, at least at the start.”
What you are missing is that the perfect storm for WFH is that there is both a “pull” from employees who want to work from home/different areas and a “push” from companies looking to reduce costs.
As someone pointed out above, this pandemic is a huge hit to the global economy. Some companies will be sunk, but even successful companies will be looking to cut costs wherever they can. The key is that costs of living are so much lower in other areas that companies can save money by paying less AND employees can have better QoL/net savings.
And that is just direct compensation. In the article Zuckerberg says it is an “open question” if the support costs of a SV worker is more or less than remote. But from what I heard it is slam dunk cheaper to support remote workers. Remember it it not just paying SV/SF rents for office space for the worker, but for the apportioned space of all the local support employees, common areas, cafeteria, shuttle buses. Once an employee is no longer on site in SF/SV, there isn’t much reason for their IT/HR/Admin support to be on site in an expensive area.
I don’t think it is that easy to avoid CA state taxes. You would have to show that you permanently moved to Nevada including changing your car registration, voter registration and so forth. CA is known as a very aggressive state in not letting go of a taxpayer.
You are correct about CA’s aggressiveness. I had friends move to another state and CA pursued them for 4 years about their vehicle registration even though (a) they no longer owned any property in California, (b) bought a house in another state and re-registered their cars and re-registered to vote in the other state, (c) did not earn any money in California since they moved, and (d) did not even set foot in California for 2-3 years after they moved.
I’m no lawyer, but this just sounds like a question of fact. I’m sure plenty of people try and lie about no longer living & working in CA to avoid taxes. And I have heard that CA is aggressive about checking on this. Sometimes where income is earned is tricky (i.e. you write a great piece of software for your employer in CA, then move to NV and get a huge stock grant) But if you have legitimately moved out and no longer live or work in CA I can’t see why CA would be able to subject you to income tax.
You’re correct. It takes planning and you have to be thorough. If you don’t have all your ducks in a row it’s going to backfire.
The CA FTB is particularly aggressive with part year residents the year they claim to have left. Also, “returning” to CA the next year is another red flag that will get their interest.
The sf wealth creation engine is not relocating out of the bay area anytime soon. Rents will come down. But we’re talking about drops from historic highs in both the residential and commercial sectors largely driven by scarcity. SF was bursting at the seams and while certain people benefited from this situation; I’d argue quality of life was suffering.
There will be Housing decreases due to lower demand as shifting workforces happens, and companies will rethink their commercial needs, but SF has been wonderful these past few months aside from the devastation of small business. SF will continue to have housing shortages and will continue to be a desirable place to live and competition for housing will be strong even in softer markets.
Buying without a plan to hold for a decade will always be risky. But if you think the housing market in 2030 is going to be weaker or stable, I’d say you haven’t been paying close enough attention. That’s not to say the CA and SF local governments couldn’t make some pretty bad decisions but those tend to work themselves out over time. The local tech economy will continue to thrive.
There will be a sweet spot to buy if that is your plan. It’s probably post election/pre-inauguration or 2nd quarter 2021 depending on how / if companies recall employees and the response. With any luck we will see more new housing and fewer people and a more sustainable quality of life overall.
Thank you, Eddy! I think this was nicely said.
As a reality check, it has only been a few months and already 1/3 of Californians are struggling with rent/mortgage payments and many small businesses are in distress/have failed. And you’re talking about hanging on for a decade. And this is even with a huge economic stimulus both directly to workers and the PPP for businesses.
Great WSJ article this morning on the remote worker trend. 40% of Facebook employees were interested in remote work. This trend is happening and it’s happening quickly. Already companies stating all employees can work remotely until summer of 2021 and then what? Companies are magically going to say everyone must come back in the office?
The smarter companies will use Work from anywhere [as] the new perk. I think people would prefer that to free lunches. Will there people who would like to come into an office and engage with others, of course. (Me included). But I think what we will see (Amazon is looking into this) is more smaller regional offices around the country for remote work.
-Twitter offers work from home permanently
-Slack offers work from home permanently
-Numerous smaller tech firms offer work from home permanently
-Facebook hiring Director of Remote Work
-40% of employees at Facebook interested in permanent remote work
-42% of all tech workers would leave Bay Area if offered remote work permanently
SF boosters can’t deny what’s happening anymore.
Friedman argued in “The World is Flat” that location wouldn’t matter any more in a digitized age. That was 15 years ago. Since then, location now matters more than ever and spatial distribution of capital investment has only concentrated. He was wrong. And so is everyone proclaiming that this is the end of cities or nexuses of professions. Social capital and its ability to foster innovation and entrepreneurialism will be impossible with a forever work from home environment. It won’t happen overnight but people will slow, again, concentrate in work places and cities.
Couldn’t agree Wiseguy! It’s true if the world was flat, then we would have done it by now. We had telephones and VPN before (ZOOM/video chat is basically the same thing), but didn’t move in that direction.
Sure, companies can set up satellite offices or offer remote work, but ultimately will it offer a career advantage to be in the same location where the bosses are? Eg, can you truly advance your career at Facebook et al if you work out of, say, Indianapolis rather than MTV/SF/NYC. Facebook’s execs aren’t leaving Menlo Park.
This is correct. Anyone that is a working professional knows good and well that this is the only way to really advance in a company that still has considerable in-person operations. Networks and on-going networking matter. Remote working FT will be a dead-end career wise in such situations, imo. That may be fine for some folks here and there but I doubt it wrt most type A’s running around SF.
I am also highly dubious of those moving to the burbs with their primary office still being located in SF. Is no one even thinking about what the horrible commute is going to be like once their company says to start coming back in? This will happen and the happiness of those that fled SF in a short-sighted manner will plummet. Personally really glad to be living in the city where I can still bike to work rather than be relegated to bart. No thanks.
Couldn’t agree, only work from home 100% of the time is career dead end. You might as well be invisible and not expect to pay raises, nice bonuses, and manager support for new positions.
If you want career progression you need interactions and a network.
It’s a steep pyramid and Mark isn’t leaving anytime soon. How many are there to grind up the ladder and how many are cashing paychecks and job hopping when opportunities are there. If they go 1/2 remote your boss might be remote as well.
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