As Brooklyn and San Francisco empty out, Los Angeles, Palm Springs, and Miami are booming thanks in part to tech workers’ hunger for space and amenities. And the shift might be permanent. “All the start-ups here are realizing that they don’t need to be in the same place all the time,” says one tech executive
t’s a common sight in the era of coronavirus: people lined up six feet apart, masks covering half their faces as they anxiously wait to enter a grocery store, bank, or coffee shop. In Los Angeles, however, lines have also popped up in front of homes and all the way down driveways as potential buyers wait patiently to see a new and coveted property on the market. When it comes to the housing market, the effects of the pandemic have varied widely. In places like New York, real estate prices have dropped as thousands of the city’s highest earners have discovered the joys of suburban life.
Places like Nantucket, Palm Springs, Austin, and Miami seem to be seeing similar booms. And in Los Angeles, some brokers say it feels as hot as it was in pre-recession 2007.
In Martha’s Vineyard, for instance, there was a 206% increase in the total value of all land sales in September compared to last year, and the average sale price rose by an astounding 47%, according to a recent report from the local deeds registry. In L.A. county, the median price of homes was up 12.2% in August from a year earlier, and more expensive home sales comprised 22% of all homes sold in California, up from 16% last year, the Los Angeles Times reported. In Brooklyn, home sales have plummeted, reportedly falling by 43% compared to the same quarter last year. In San Francisco, the number of homes sitting unsold reached a 15-year high, per the San Francisco Chronicle. So, why the discrepancy? In short, the old adage still rings true: location, location, location. Only, in the age of coronavirus, location means something completely different than it did eight months ago.
At least part of the spike in Los Angeles, Palm Springs, and Austin might be attributed to tech workers divorcing themselves from the astronomical San Francisco housing market. Ironically, the industry that created the technology that allows us to shop for homes on our phones and work from our kitchen tables is the one least likely to return to the so-called normal of massive tech campuses and huge office spaces. “The tech workers are never going back to the office,” one tech executive told me this week. “Twitter, Facebook, and all the start-ups here are realizing that they don’t need to be in the same place all the time. They can be just as productive, if not more, working from home.”
The theory among people I’ve spoken with in Silicon Valley is that tech workers trapped in their houses will start to develop new, better technologies to facilitate the process. Google Maps and Gmail, for example, were built as side projects at Google because the engineers saw a need for these tools. Now that tech employees are working remotely, they are finding new problems in the work-from-home lifestyle and creating new solutions to allow them to be more productive. Which means that these products could eventually make their way into our hands, and could justify us never going back to the office. In which case, the diaspora that has taken place from cities like San Francisco and New York to Los Angeles, Austin, and Miami will only continue. Many tech employees and executives I’ve spoken with have said they’ve left San Francisco and Palo Alto for homes in Sonoma and more remote locales. While some of the highest-paid tech moguls have owned homes in L.A. since before the pandemic, several are now there permanently, or at least until there is a cure for the virus. Read more via VanityFair