UNITED STATES—A lot of homeowners are leaving San Francisco. How many? Well, according to a new report out of the real estate company Zillow, inventory in SF rose 96 percent between 2019 and 2020.
Remote Work Flexibility
The obvious reason behind this rapid rise in empty homes is the COVID-19 pandemic. As more Californian tech companies allow employees to work remotely, San Franciscans are increasingly interested in finding more spacious homes at more affordable rates.
Incentives to Leave
Interestingly, a few companies now offer employees incentives to move out of the Bay Area. For instance, the software company Zapier is now offering workers $10,000 to help them leave San Francisco. One of the goals behind this initiative is to reduce employee stress by encouraging workers to live in more affordable cities.
California Real Estate Trends
Although COVID-19 accelerated the move away from San Francisco, it’s not the only reason behind this trend. Indeed, real estate specialist, Eric Andrews points out that SF is an outlier compared with other American cities, most of which still have inventory shortages.
For example, Andrews pointed out that San Jose—another tech-centric city in California—hasn’t seen a significant uptick in home availability. When comparing SF with San Jose, researchers found San Jose seemed to attract more families.
Down with Culture, Up with Crime (and Mortgage) Rates
While cost and family appeal might have influenced San Francisco’s real estate numbers, there seem to be other reasons at play. For instance, ever since restaurants, parks, and theaters have been closed due to the pandemic, residents no longer have access to many San Francisco cultural attractions. While there have been some innovations in California cities during the pandemic to help promote health and wellness, for many residents, it just isn’t enough to keep them from moving on.
A few tech employees have also complained about an uptick in crime and homelessness. According to recent data out of the City of San Francisco, there are now at least 8,000 homeless people living in the city.
But perhaps the most significant reason driving residents out of San Francisco is the city’s high mortgage rates. The current median home value in San Francisco is set at $1.4 million. The Golden Gate City also has 13 of the nation’s priciest zip codes.
Where to, Next?
It’s clear San Franciscans are moving out—but where are they moving to? Well, it appears San Franciscans are moving anywhere they could find a good deal.
For instance, Pittsboro, North Carolina has seen many Californians trading in big city life for small town charm. Realtor Eric Andrews comments that Californian’s are amazed, not only by how much further their dollar stretches, but also by how drastically improved their quality of life can be. North Carolina offers green space everywhere and is never too far from either the beach or mountains.
Recent reports also suggest many San Franciscans are relocating to the Lone Star State. Indeed, the Texas Realtors’ Association revealed the number of Californians moving to Texas jumped 36 percent in recent years.
In response to this trend, many Silicon Valley companies are re-thinking their headquarters. For instance, Palo Alto-based Palantir recently decided to relocate to Denver. As remote work becomes increasingly common, most real estate experts believe this inventory surge will continue in San Francisco.