Bay Area Exodus Leading Edge of Pandemic Housing Reshuffle
Long one of the nation’s “it” destinations, San Francisco was already a land of unaffordable housing before the coronavirus hit. With the median single-family home price still hovering above $1.5 million even as of December, thousands of residents leave the Golden Gate city.
Data from high-tech sources like cellphone location trackers to old-school change-of-address forms have started to put some scale around the reversal of fortune the City by the Bay now faces, with anywhere from 1.5% to perhaps 3% of its population exiting for surrounding counties or other states over the past year. Housing prices are beginning to follow suit.
A coyote stands by the roadside as the spread of coronavirus disease (COVID-19) continues at Golden Gate Bridge View Vista Point across San Francisco, California, U.S., April 7, 2020. REUTERS/Shannon Stapleton/File Photo
“The Bay Area is hurting,” cellphone data firm Unacast scoreboard said in an analysis concluding that about 46,000 people had left the Bay Area’s 10 counties, with more than 13,000 leaving San Francisco itself. “The exodus from both city centers and Silicon Valley is very real” and may have resulted in a blow to local incomes of around $12 billion.
In a separate analysis, Oxford Economics, citing U.S. Postal Service change of address information, said the decline in the city’s population might have topped 27,000, the fourth highest in the nation and part of a broader population reshuffle from major cities during the pandemic.
That has been feeding through higher home sales in places like Texas and North Carolina, where people have been moving.
Housing in San Francisco
According to data posted online in San Francisco, it meant a nearly 7% drop in the median home price from November to December, a 23% decline in rents over the year, and a 15-year high in available condominiums Norada Real Estate Investments.
The pandemic has triggered a number of changes in housing, work, and migration patterns – from major cities to the suburbs, from dense office buildings to working from home – and the persistence of those trends are likely to shape what the economy looks like after the health crisis subsides, according to economists and policymakers.
For example, the Unacast data is based on vast amounts of information gleaned from cellphones, and in particular to changes in a phone’s overnight location. The firm has noted similar population declines in New York and Houston – the nation’s first and fourth-most populous cities.
While those new patterns may reverse, many analysts feel they are likely to endure to some degree – and the adjustment may not be smooth.
Kansas City Federal Reserve bank President Esther George on Tuesday said she saw a “worrying scenario” if jobs, population, and work locations reshuffle to such a degree that homeowners cannot pay mortgages and businesses can’t afford leases.
“Any significant change in the location of economic activity, regardless of its specific form, has the potential to affect the valuations of residential and commercial real estate significantly,” George said, with implications, for example, to the stability of financial institutions.
(Reporting by Howard Schneider; Editing by Dan Burns and Bill Berkrot)
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