One of the industries that have done well throughout most of the pandemic is residential real estate. A few months into the pandemic, housing markets took off. Why did many homeowners take advantage of this fact to move to lower-cost urban and suburban areas? How, where, and why did this happen?
The personal migration trend in the U.S., in fact, was already underway at the beginning of the last decade. And by late 2020, mid-tier cities like Austin, Denver, Boise, and Phoenix continued to grow at the expense of major metropolitan areas like New York City, Chicago, Philadelphia, and the Bay Area.
We’ve all read about tech and other companies in B2B industries that had strong years in 2020, despite the pandemic. That’s due in part to the efficiencies they enjoyed over the past year from several factors, including more productive (at-home) personnel. This employee productivity was enhanced thanks to the absence of commutes, fewer work-related distractions (but, granted, there were many cases of home-related ones), meetings that were more efficient, and of course far less time lost to business travel.
Many of these efficiencies will continue to bear fruit for the longer term and that’s why major companies have announced the continuation of working from home, especially in the tech industries. With that kind of assurance, employees will increasingly move to smaller urban and suburban locations. More Americans will have the opportunity to live where they want to live, not where their office is/was located. They’re free to choose cities based on climate, recreation, schools, taxes, housing options, cost-of-living, and other personally important factors.
Where are they going? They’re heading primarily west and south. According to research sponsored by CHUBB®, successful families over the past 12 months are making somewhat lateral moves – from one urban area to another urban area (smaller, but with similar amenities) and from a suburban town to another suburban town.
It should be noted, though, that while some of the moves represent lifestyle upgrades, more than twice as many of the pandemic-driven moves come with a less happy story. Financial stress forced many people to move to smaller homes, less expensive locations, and into rentals. Many more people moved in with family members to form multi-generational households.
Americans are on the move.