Posted on 07/23/2020 6:41:03 AM PDT by cuban leaf
I moved from Seattle to a "hobby farm" in rural Kentucky nine years ago. Two years ago, my daughter and her husband followed me here and bought a spectacular home east of Louisville for around $600k that would have cost millions in King county, WA. They were able to come here because his job allowed him to Work From Home (WFH) full time - and still earn Seattle wages.
I've said for years that once technology allowed the concept of WFH to reach critical mass, we'd be seeing our cities drain into the burbs and rural areas of the nation. Little did I know the catalyst would be not technology, but a ginned up over-response to another flu pandemic scare.
But here we are.
And now my other daughter and her husband, who were solidly planted in Seattle because he owned his own business, just visited her sister. They were blown away by the people, the environment, and the prices. Even though they were here during the most miserable hot and muggy weather that we can have, they said it was completely acceptable. Now they are looking for a home here.
But why can they do it? Because all of his employees are working from home now and he's seeing no drop in productivity. And now he doesn't have to be the "first to arrive and last to leave" at the office, which actually frees up a lot of his time.
But wait, there's more!
He was here in Kentucky looking to hire some more WFH people. He said he has hired his last Seattle employee because they are simply too expensive. He will not let any of them go, but when one goes, he will replace them with an equally qualified candidate from a "lower tier" market, like Louisville, Nashville, etc.
But wait! There is even more!
I've been trying to get electicity to my new building here in Kentucky, but there is a huge construction boom going on right now and electricians are swamped. Even the local Lowe's has actually run out of some construction materials like 2x4 studs. And to drive the point home, when I called the local electrical inspector, he confirmed that there has been a boom going on since late last year but it really ramped up after the lockdown started.
But here's the interesting part and what inspired this vanity:
I told the inspector my theory about the pandemic causing WFH to boom and that I expected it to impact the rural areas of Kentucky. His response was that it is already happening in our rural county. He went into detail about all the inspections he's been on and the reasons for them - people from cities moving here permanently. He spoke of old buildings being revamped and new electric requiring inspection, new construction in the sticks, etc. He then went on to discuss his predictions that mirrored mine: We're going to see real estate price hikes in these rural areas as more and more city dwellers realize what we have out here and couple that with their newfound (and in many cases, permanent) ability to WFH. It's changing our culture.
And if they are moving here, they are leaving somewhere else. I believe we are seeing a fundamental shift in the living arrangements and lifestyles of the American public similar to what we saw when our boys returned from fighting in WWII. It's going to leave a mark.
But this time it's not suburbs. I believe it will be many, many new cities around the nation with populations under 100,000 within their outlying areas. The needs and culture of the inhabitants will be fed and supported by "quaint" downtown cores for personal contact with other residents, and the internet and companies like Amazon to meet their general shopping and other needs. And they will work for companies all over the world, but never leave their small town except when they want to.
This is the problem. I have hoped they would just nucleate around the cities they are fleeing instead of changing rural America. But no, they have to spread like a cancer bringing their affluence to areas that have none changing the economy for people who can’t join them.
All those office buildings? They become low income housing and homeless shelters.
Ask your wife whether you're printing as you go through several natural motions.
Since they are anonymous here, I don’t mind sharing numbers. :)
I like to share my RE tax numbers - 32 acres and a nice house and huge barn, not to mention two streams, two hollers and two knobs: $250 a year.
In places like Seattle, nobody owns property. They rent it from the government.
Vanities belong in chat. Just saying.
Yes. The cities will not “dry up”. But there may be a VERY serious adjustment in rents and businesses in some, an only a serious adjustment in others.
And what does this protend for the commercial real estate market??? A major bust in my opinion.
What does your daughter make per year?
I wonder if this will make small to mid-sized cities to be desirable and the big cities will shrink to their core, more or less. And maybe rather than a city becoming huge and unmanageable, new cities will pop up and small cities will grow to mid-sized No one will want cities to grow beyond a certain size.
And what does this protend for the commercial real estate market??? A major bust in my opinion.
I work for a large company that rents a LOT of space in downtown Louisville. Not only will we be working from home for the foreseeable future, but this WFH thing is working out so well that the company is wondering why they needed all that space in the first place.
That is my take. Large cities become very difficult to manage. One of the big advantages of small cities (under 100,000) is that they are still in that small town sweet spot of “everybody knows evrybody”. At least, full anonymity is more difficult. It’s harder to get away with stuff when people recognize you or your car.
Of course, if towns are too small and bereft of opportunity, there are drug problems.
He says of his son: They were able to come here because his job allowed him to Work From Home (WFH) full time - and still earn Seattle wages.
The he quotes his SIL: .He said he has hired his last Seattle employee because they are simply too expensive.
Contradictions aside, he has had a blinding glimpse of the obvious.
I was raised in a rural county and now live in a small town with very little quaintness which is over rated. Decent school, plenty of churches, a DQ, and neighbors armed to the teeth.
A friend called to say the have new neighbors from Queens. The family is utterly shocked by kids playing unsupervised, open garage doors (they probably have not seen the garage TVs and refrigerators), and friendly caring neighbors. They will not understand why we will insist that they arm themselves.
Unemployment rates:
Massachusetts: 17.4
New Jersey: 16.6
New York: 15.7
California: 14.9
Michigan: 14.8
Illinois: 14.6
Missouri: 7.9
Wyoming: 7.6
Georgia: 7.5
N Carolina: 7.5
Alabama: 7.5
Montana: 7.1
Nebraska: 6.7
Maine: 6.6
Oklahoma: 6.6
N Dakota: 6.1
Idaho: 5.6
Utah: 5.1
Kentucky: 4.3
Just noticed the vanity. So my comments are for you. Over all a decent vanity.
We enjoyed our visits to Seattle back 10 or more years ago.
Duke’s Clam Chowder House was usually our first stop.
Yes. The contradiction is there. However, one is about now and the other is about what is to come. The guys that are able to WFH and keep their big city wages now are the true winners here, but they will be a dying breed. Some will keep those golden handcuffs as long as they want. Others will actually be let go, but usually because their companies fold. Companies rarely do wage decreases. It generally happens through attrition.
Interesting trend.
One thing that deserves mention. The high salaries in the cities are generally based on the high costs of living nearby. Companies aren’t paying it based on the goodness of their hearts.
If the employees aren’t tethered to the city, then it won’t take long for the companies to realize they don’t need to pay urban wages for remote rural workers. And there are plenty of us rural people who could do a lot of city peeps’ jobs if we were able to do them remotely.
Something to keep in mind to those considering purchasing land and a home based on what you’re making now. Best to look around at the area you’re moving to and seeing what your job would pay if you had to work at a local business before you sign a mortgage based on your current arrangement. We may have lower costs in the country, but we also have lower salaries for the same jobs if the company is local.
A big downside to all this, is after corps have outsourced to us country folk working remotely, it’s only a small step to outsource offshore remotely...
A large amount of “office” work can be done at home, but the number of “hands on” workers far out distances office workers...Most all the products that we buy to use, eat, drive, look at, play with, are made by blue collar workers at the site...
Also, the liberal, democrat minded people who actually do move from “downtown” in to the suburbs or the rural areas do NOT change their voting habits...They still vote THEIR way whether in cities or the country...
We still love to, every time we go there, go to Ivars, buy a bunch of fries and feed the seagulls. :)
All true.
There is another aspect: I’ve got friends here that have a pretty nice place to live and have been working at the same place for decades, for sub-$20 an hour wages. If all the city folk move here, even with “lower tier” wages, they will earn a lot more than these people, driving them out regarding housing prices. I don’t really know what can be done about that.
It kinda reminds me of the implementation of a higer minimum wage. It only helps those that see an immediate wage increase and no cut in hours - until the economy catches up to the “new floor” and they are back where they were, relatively speaking.
i.e. it’s great for the early adapters, but eventually the whole thing will be sort of leveled off. Cheap places will become more expensive, and the local wages will have to increase to match, while expensive places will become cheaper, with the lower wages to match.
But I’ll say this: I think cities steal people’s soul. Getting millions of people out of megalopolises into 100k sized cities will make everything a little better - especially in the age of the internet, Amazon, etc. These places are just more “liveable” and “human friendly”.
IMO, of course.
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