For those of you who don’t live in “Flyover Country”….put down your triple soy mocha latte and cover your eyes.
The “Rural Exodus’ as we know it, is done. Yes, seriously, it’s done. Sure, kids will still move to the big city for “opportunity”, but they are going to find in most cases opportunity is moving to them. Three factors in this observation.
#1. Telecommuting: Yes, I’m one of those people. And I get ∞ miles per gallon on my commute to work since the Honda sits in the driveway and I wander downstairs to my office to work. And for a good chunk of businesses, this is going to be the future. Of course there are companies that need daily face-to-face interaction to actually run a business. But for the majority of white-collar businesses, this isn’t necessary.
#2. Cost of Living: When I bought my four bedroom, two plus bath house in 2001, it cost me around $130k. Today, that same house is still around $130k. What would a house like that cost around Los Angeles or Chicago? Probably in the neighborhood of $400k+. Yes, I have to deal with the occasional blizzard, but LA has the occasional earthquake. We’re even. šŸ™‚ And now with businesses looking to the bottom line, hiring an employee who costs a third less than one in a “major metro area” to do the same job looks very appealing.
#3. Pandemic/War/etc: We keep hearing horror stories about how we’re overdue for another “Spanish Flu” or a covert nuke thrown into the hold of a cargo ship. And it’s true, one of these days, that will happen. And when it does, just as people became hesitant to lease floorspace in new high-rises after 9/11; we will see people start to rethink the whole “living in the big city” lifestyle.
No, I’m not saying that the bustling subrubia surround major metro cities is going to disappear. It’s just not going to grow as it has for the past ten years. And we might see, because of that, downward pressure on home prices. We’re already starting to see home construction slowing down which could obviously be a blip, time will only tell us if it is a blip.
In the end, this is a siimplified view of where I see things going in the next twenty years. I don’t think we will see too much downward pressure on home prices because, well, everyone likes the prices where they are. What I do see ending is the vast overinflation of existing home prices over the next few years.
OK, someone discuss this. šŸ™‚