San Jose and San Francisco could be big losers, with the wider adoption of remote work causing a flood of migration away from metropolises, researchers say.

Migration rates are expected to be three to four times higher than normal in the coming years as more companies allow employees to work from home. The highest share of movers will be leaving expensive cities for lower-cost cities, and rural communities, a survey by Santa Clara-based Upwork found.

At least 1 in 5 residents in high-priced cities say they have already moved or expect to — a possible harbinger of signficant change in the Bay Area. More than half of all those surveyed are looking for lower housing costs, and are willing to move more than two hours away from their offices.

“This is the biggest, fastest transformation of how we work since World War II,” said Adam Ozimek, chief economist at Upwork. “It’s an extraordinary change.”

The exodus from high cost cities is already showing up in the Bay Area, with softening demand and plummeting rents hinting at a shift in work and home life. The median price of a one-bedroom apartment in San Francisco fell 20 percent in October from the previous year, and dropped 9 percent in San Jose, according to listing site Zumper.

The Upwork survey looked at 20,000 people nationwide, asking if they expected remote work to change where they planned to live. The analysis showed between 7 and 11 percent of workers expected to make a big move outside of their county or state, Ozemik said. That equates to roughly 14 to 23 million people.

The report did not break down results by demographics or geography.

More than half of the people surveyed said they were looking for a lower cost of living. About half said they were moving more than two hours away, and 40 percent said they were moving more than four hours away. “They want to move somewhere else entirely,” said Ozimek.

The results mirror similar surveys in the real estate industry. Far more California residents this year than last searched for properties outside California between July and September on Redfin, according to the listing website. About 53,000 more Redfin users in California looked at properties outside the state, a 62 percent increase from the previous year. Redfin found a similar trend of users looking to leave New York City.

Upwork, a digital platform connecting freelancers to businesses, has found corporate clients more willing to extend work-from-home policies for employees. Ozimek said remote work has offered businesses a deeper and wider pool of talent from which to choose.

Smaller communities left behind in the rush of highly educated professionals to tech hubs like the Bay Area, Seattle and New York will likely benefit from the dispersal of employees, he said. Skilled professionals can choose to stay in so-called “Zoom-towns,” working with colleagues through video meetings while enjoying a lower cost of living in small cities.

“This is great news for these places,” Ozimek said. “It’s highly educated people. It’s entrepreneurial people.”

The pandemic has warped the residential real estate market in the Bay Area. Despite widespread unemployment amid a national recession, suburban home prices have soared to near-record levels on strong demand for more living and work space. San Francisco home prices have lagged behind the greater region, and a flood of condominiums have gone up for sale.

Outer suburbs and resort regions like Lake Tahoe and Sierra Foothilll towns have seen rapidly rising demand and prices, as Bay Area workers seek respite from the pandemic. Home and condo sales around Lake Tahoe in the third quarter nearly doubled over the same period in 2019. The median sale price of a single-family home in Truckee jumped 29 percent, from $725,000 to $937,000, according to the Tahoe Sierra Board of Realtors.

Zumper CEO Anth Georgiades said “there could be further to go” on rent declines. Entrepreneurs have been hesitant to re-open offices and businesses, and many younger workers have chosen to ride out the pandemic away from the city.

The peak San Francisco rental prices in recent years may not be reached again anytime soon, he said. But Georgiades expects the Bay Area to bounce back with another wave of workers in their 20s and 30s seeking good jobs and big city life. “The exodus we’ve seen now is temporary,” he said.

Ozimek also does not expect remote work to turn the Bay Area and similar high-tech hubs into ghost towns. New residents will still be attracted to the cities, he said, and perhaps take advantage of falling rents and housing costs.


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