Since the beginning of the COVID War, the Trends Journal was the first to forecast a sharp exodus from metropolitan cities to suburban and ex-urban areas. A year later, new data supports this historic shift.
New census estimates for the year ending 1 July 2020 showed population losses for urban counties plunged at a faster rate than rural areas, according to The New York Times. The paper reported that of the 110 cities with over 500,000 residents in the U.S., 29 lost residents in 2020. Cities have been shedding residents for the past couple of years. In 2019, 26 reported fewer residents.
The report pointed out that the timeframe in the census survey ranged from 1 July 2019 to 1 July 2020, so the full effect of the coronavirus shift is not fully reflected in the data.
On 9 February, the Trends Journal published the article, “AMERICANS: GOING BROKE, MOVING OUT,“ which cited a Pew Research poll from June 2020 that showed 28 percent of those fleeing big cities cited fears of the virus as their main impetus. In November, a follow-up poll found a third were leaving cities due to financial constraints and an unsure job market.
A month later, we published the article, “MOVING OUT, WON’T EAT OUT,” that cited a Bankrate/YouGov poll showing some 26 percent of millennials and 10 percent of Generation Xers packed their bags during the outbreak.
Zach Wichter, a Bankrate analyst, told Yahoo! Finance that these individuals “are going places where they may be able to get a little more space, a little more bang for their buck, but not going to the middle of a cornfield for the most part.”
TREND FORECAST: As we have forecast, the move out of big cities will continue to escalate as crime rises and office occupancy rates decline, which will, in turn, create a commercial real estate plunge. And when interest rates rise, the commercial sector will dive deeper.
Moreover, there will be a significant drop in commuters, which will push down the big city real estate sector.
For example, Sundar Pichai, the CEO of Alphabet, the parent of Google, told his employees that the “future of work is flexibility” when he announced plans to change the office dynamic at the tech giant.
The Wall Street Journal reported that Pichai wrote an email saying about 20 percent of staff would be allowed to work from home, 20 percent would move to new offices, and 60 percent would be working from their current locations.
Pichai also announced plans for a hybrid work week to allow employees to work from “wherever they work best,” whether that means going into the office three days a week or working mostly from home.
On 9 March, we published the article, “OFFICE WORKERS’ SLOW RETURN ENDANGERS LANDLORDS, CITY FINANCES,” which pointed out that only about a quarter of office workers sent home during the pandemic have returned to their desks.
On 16 February, we published the article, “SALESFORCE.COM TO PERMANENTLY SHRINK ITS OFFICE SPACE,” which noted the major tech company announced that it expected about 65 percent of its 54,000 employees to be in the office one to three days a week.
Thus, with fewer commuters, there will be fewer customers for retail, restaurant, hospitality, and other businesses that rely on commuters.
