But Bend was already hot, and on people's radar. Yesterday I saw an article about housing heating up in Baker City Oregon. This is a small town of 10K people that is certainly in a nice area, but hasn't been known as much of a 'hip' place to be.
https://www.bendbulletin.com/business/realestate/baker-count...
There are quite a few smaller towns here and there throughout the west. It'll be interesting to see if the dispersion to these kinds of places is fairly uniform, if people stick more to already 'hot' places, and of course what happens when the pandemic is mostly played out.
Interests rates are at their lowest and the rise in property value should more than pay for it.
[0] https://www.dwell.com/article/prefab-home-office-accessory-d...
Although Bend's internet offerings are extremely sad, and I'm surprised the political power of the tech crowd hasn't forced municipal fiber to be a thing yet.
I think some people are more comfortable with less of that stuff. I could get by without Costco and REI.
The rest is a chicken and egg problem. If you start attracting high income remote workers there should be more stores setting shop.
The Mom & Pop coffee shop and hardware store.
The ability for their children to live down the street, because they have been priced out of the market.
There are many things that change when your house and land are worth more money.
I mean, yes, nice place. Not near anywhere. If you like ranching/farming communities with mountains nearby, it's pretty good. But how are internet speeds? And if you need to come back to "civilization", where's the nearest airport with commercial flights?
But you can buy a lot of house for the same amount of money that would get you a dumpy, nondescript place in an anonymous part of Bend:
https://www.realtor.com/realestateandhomes-detail/2405-2nd-S...
To say nothing of the Bay Area.
It doesn't take a lot of people moving in to start changing prices in a town that small.
Good place to stop if you're passing through to Baker City :)
There's a large swath of people who want to work in an office for many different reasons. I don't think it's going away.
NYC is still NYC for example. It will suffer for awhile but people will continue to want to be there because being there is different than anywhere else. It doesn’t rely on an industry or on locality of an industry. It will rise as it has many times before as a capital city of the world. The surrounding suburbs in NJ and CN are well served by trains which the Bay Area can’t really say.
The Bay Area is just another sprawl of highways, strip malls, and parking lots. You could be anywhere if it did t happen to be there.
I think there will remain a certain prestige in the Bay Area though. But maybe not a monopoly like today. Sort of like how Wall St. is more a legacy than an actual locality that matters in the finance world.
Except when the annual wildfires make the air unbreathable for days or weeks at a time.
Some will, some won't! Truth is, those who decide to offer compensation based on value added instead of a magic HR approved formula will get interest from everyone else. I expect some companies to use this CoL-based compensation as a way to let go underperformers and others to attract talent that was previously unavailable.
> Will smaller firms elsewhere have to raise salaries to compete with locals taking non-regional salaries?
They'll have to.
You're leaving out "what the candidate will accept"
People working remote in other locations will have higher salaries from SV companies since they are used to paying those salaries.
People moving from SV to other locations should expect moderate drops (10-20%). In my own experience moving to a 0% state income tax state, it effectively canceled out the savings from CA tax but the cheaper housing more than made up for it.
Longer term:
Tech salaries will come down as employers hire from a larger talent pool that is cheaper on average. This will make it hard for people in SV to work remote as they won't be as competitive. This probably means SV will become more affordable.
> be compensated the same as those in SV?
Generally speaking no, compensation has an aspect of location. Companies are going to have a harder time paying SV rates if they know you are in a cheaper area.
No. At larger companies, they already have these types of adjustments and will just be making more of them. For smaller companies, they’ll very quickly start to implement these types of adjustments.
Depending on where you go, the trade-off can still work in your favor, even with a lower salary. But COL calculators aren’t perfect and don’t change as often as the areas can. So you can be in a position where your COL rises but your salary, per the calculator does not.
When I moved to Seattle from NYC, I got a lower salary because of COL differences, even though the real COL is the same (and in some ways, is higher than NYC). Yes, rent in Seattle is going to be lower when directly compared to New York City (so same type of area/amenities/size), but your options are lower too, which can push you towards a higher priced house or apartment than you might choose in New York. I pay a lot more in rent in Seattle than I did in NYC. It’s a nicer place and the equivalent in Williamsburg would be higher, but I’d have more options that were less than what I pay in NYC that still fit my needs and are close to the places I need to be. Food prices and cost of good are the same (sales tax is higher in Seattle and there are fewer food options for delivery). It’s the state income tax that is the differentiator. That’s 10% of my income a year I don’t lose as I did in New York. And that can be significant.
If I left Washington for a place with LCOL, I’d need to calculate my lower salary against the real-world costs of the new place, plus any additional expenses (like owning a car and gas money and maintainable/insurance), and the tax implications of the new place. Going from California to Texas will be a big change tax wise, but going from Washington state to Iowa, which has a 9% state income tax and a LCOL, I’d need to calculate whether that lower salary would be a good enough deal for me to leave. And of course, you have to factor in the cost you personally value the place you live from a culture and opportunity point of view.
I like big cities. Cities have suffered tremendously with COVID because all the things we love about cities have gone away. But I’m still (perhaps stupidly) bullish on cities. I grew up in the suburbs of a major city but haven’t lived outside of a major metropolitan area since I was 18 years old. I have no desire to live in suburbia, even if the housing prices are low and space is plentiful. That just isn’t my thing. So the trade-off to do that would be require a significant increase in compensation.
But I don’t have children and I understand that lots of people don’t have the same affinity for big cities that I do. They are happy with those tradeoffs. To be able to buy a home or a condo for under $1 million. And for those workers, going from a $300k SF salary to something like $180k might be just fine.
But anyone expecting to make that $300k in Montana or Texas is fooling themselves. There will always be outliers who will be compensated more or the same, regardless of where they live. But those are outliers. It’s not the norm.
There are some that predict the move away from big cities will depress tech salaries in general. I think there might be some of that, but it just depends on how many people actually move. Part of the reason you have hubs in various industries like SF and Seattle and NYC and DC and Boston and LA is because that’s where a lot of the talent has decided to congregate. And talent!= company HQ. Atlanta probably does as much production work as LA does, but Hollywood and the film and television and streaming industries are still centered in Los Angeles. No studio executive is moving from Malibu to Buckhead (an actor or producer might buy a second house there, sure).
For tech, maybe there will be a wide dispersion. But I don’t think it’s a guarantee.
Once its safe, you can be sure I'll be going into the office every day getting IRL "facetime" with managers.
I love to see my colleagues face to face but I also hate the commute time to the core.
I think there are many people who are in the same shoe as I am.
If the COVID situation brings the whole corporate world to accept a level of flexibility, where proximity to the team is encouraged but not necessary, that would be a win for everyone, IMO.