The coronavirus pandemic has caused population movement out of large, urban markets. Many large cities such as San Francisco, Los Angeles, Chicago, and New York have seen many people moving out over the last several years due to the high expense of housing and high urban density. This trend was exacerbated this past year during the health crisis as people looked to get away from densely populated areas in favor of more suburban and rural locations. The ability to work from home and attend school online has given people a lot of flexibility to relocate. Although some of this flexibility is short-lived and might change as we recover from the pandemic, many companies are making the decision to allow workers to continue to work remotely. For these workers, the desire to return to expensive urban areas might be less appealing. Suburban and rural markets tend to be less expensive and more attractive, especially by those workers whose income was negatively affected by the pandemic. Companies are also benefitting from a work from home policy as this lowers their costs for expensive office space in downtown urban locations.
The migration away from some of these large cities has favored smaller markets in the South and Sunbelt markets. Cities like Phoenix, Austin, and Dallas are some of the fastest growing markets in the country. Labor markets in these cities have strongly outperformed the more expensive coastal cities on the East and West coasts during the pandemic. Many markets in the South are luring business activity with a lower cost of living, business friendly conditions, quality leisure facilities, and high quality of life. We expect to see companies expanding their employment base in these markets and a continued migration of people into these markets to take advantage of lower cost housing and good job opportunities. This is especially true for younger workers who have traditionally been shut out of homeownership in more expensive markets on the East and West coasts. We are seeing increased apartment activity in many of these markets and expect this trend to continue in the future.
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