Now, what'll happen to wages?
https://www.bloomberg.com/news/articles/2020-10-13/san-francisco-studio-apartment-rents-plunge-31-most-in-u-s
12 replies (most recent on top)
If you rented in CA and you could work from home anywhere in the world. Why would you stay in CA when your lease ran up?
I am getting tired of how dem Houston is becoming I couldn’t imagine how bad CA is. If they let me WFH for good my stuff in houston would be gone and I would move elsewhere, away from a big city with a every growing homeless problem.
Rent tends to go down in areas where people are $h1tting all over the sidewalk, and public “servants” don’t follow their own rules. After awhile sane people get sick of this and leave
What you will probably see is many of these companies will start hiring overseas cheap labor where they can get some competent to do the job for less than half of what they will have to pay a US worker.
Anyone that has taken supply/demand macroeconomics course knows that, just like rents have to drop, wages will also have to drop.
Their labor supply is now the entire US and not just the SF metro area.
@1ifx+17qqQY7Z I would like to see full remote for many/most positions. The past 7 months have shown that being in the office is not necessary to run a business. However, I suspect that Chevron will probably go the route of Microsoft, who just announced a hybrid policy of 50% remote/50% in office. This would still be much better than pre-Covid times, where I had to sit in 45 minutes of traffic each way to SR, 4-5 days per week.
“ As such, they are leaving for more affordable places to live because they can work from anywhere that has an Internet connection.”
I really hope Chevron can sustain the work-from-home workstyle/lifestyle. I would love to live somewhere in the Midwest or up north where it’s cooler or even snows. It seems like such a waste to commute to the office just to sit in a cube all day and have virtual meetings with your stakeholders because they’re in other BUs or in the field. All of the companies that I have interviewed with have said their positions are remote. They said I can live anywhere.
if anything places like SR might see increases as people move away from SF
The migration to the suburbs may actually raise rent in outlying areas of SF Bay. It will be temporary for couple of years and then the migration back to city centres will resume again. Then in about 20 years the waters will start rising to levels that compromise the sewer system and other infrastructure and SF will slowly be a ghost town like Miami will. Welcome to the new world. I wouldn't buy property in a low lying area if you want your kids to inherit it. Then again you can carry on denying global warming and live in IGNORance until you wake up.
The rents in SF were caused by artificial tech bubble, and likewise have fallen because of the COVID are leaving, it won't affect house prices much though
That is only rent, not if you want to buy a house. The home prices have gone up and will go higher regardless due to muti story building code restrictions in most of bay area. The population will still go up as many find bay area ideal to live simply because of weather, top schools and attractions. So this will have little impact on those who really want to settle in that region.
Chevron salaries were already somewhat below market for the Bay Area (especially compared to what our Houston colleagues were earning at the same salary sans state income tax). This will hopefully make housing more affordable for the entire Bay Area. I doubt Chevron will ever go permanent remote work, but a hybrid model may be adopted. In that case most SR folks will still need to live in the Bay Area. But it would be much more tolerable with shorter commutes (due to less employees commuting every day) and lower real estate.
Rents drop as a reaction to the market.
In this case, in high tech San Francisco. Many workerS have been able to work from home because of COVID-19., and in many cases it is becoming more permanent. As such, they are leaving for more affordable places to live because they can work from anywhere that has an Internet connection.
It is possible some of these firms will now be able to attract talent elsewhere and pay less because they won’t have to move them to high cost SF and thus lowering rent in area.
I think this will have little effect on Chevron as they don’t tend to pay any different in San Ramon then Houston. They had some Housing subsidies, but that’s it.