Stay put or try to find remote work?

In reply to P3PPY :

The coasts pay more because their expenses are higher. 
 

If you are thinking of relocating to the coasts, your expenses will go up. If you are thinking of staying where you are but working from home for a company based on the coast to capture the higher wage, I think (like pellet said) it's only a matter of time before these coastal companies start lowering wages because they can higher people remotely who have lower expenses. 
 

But there is a window of opportunity for a while. 

Companies are taking this opportunity to set up a downward wage ratcheting mechanism: If you're hired from or move to a cheaper location, you'll be paid less, and I expect they'll soon reduce and eventually eliminate hires from expensive locations. This might initially sound like the Iron Law of Wages has unleashed its final form and you might not be wrong, but I think this could actually turn out to be a good thing because it will ultimately alleviate geographic income concentration by moving more jobs out of the hotspot cities, and in turn this could also play a small part in alleviating the decades-long runaway real estate price madness that people born before 1985 are only just starting to notice was an incredibly bad thing the entire time, if we play our cards right.

Canoe revival thread guys

In reply to GameboyRMH :

Interesting perspective. But I think it's optimistic. 
 

Everything yo said is correct. However, the opposite is also true. 
 

WFH opportunities have also enabled the vast majority of upper middle class people to choose where they want to live without considering proximity to good jobs. The people with money are spending on the most desirable properties. The pandemic has caused massive real estate value INCREASES. 

I think both will probably happen. Undesirable properties will decrease in value while desirable properties will increase even more and become more unattainable, both without consideration to employment opportunities. 
 

Sort of like it's always been. On steroids. 

In reply to I haven’t owned an SVX in a really long time :

Agreed. My house has doubled in value in the last 10 years, a large portion of that in the last two. Good for me. My eldest son and my eldest daughter are both looking for houses. Even with decent-paying jobs, they can't afford anything in the area. 

I think that's partly a residual effect (if those people keep working out of their glam-cabins they'll get pay cuts and then they'll have to rent or sell one of their properties) and partly caused by business properties being held in limbo for so long during the pandemic - big businesses are sitting on office space unsure of when or even if they'll use them again, while small businesses are hanging onto them with their fingernails through eviction moratoriums etc, so there's a lot of empty commercial space sitting idle and out of play right now which also drives up prices. If anything that's the primary cause of real estate prices going from transparent-hot to plasma-hot during the pandemic.

In reply to GameboyRMH :

You are assuming people are buying 2 houses. Some are, but not all. 
 

Some have traded up for a larger house to have home office space. Some have accelerated retirement. Some have actually downsized- selling 2 separate properties that can now be combined into 1 good one. Some (like me) have been buying vacation rental properties. Even though the price is high, I am confident rents will also stay high (because WFHers have learned the value of good vacation getaways that are in private spaces, not jammed into theme parks and resorts)

The ability to pay for higher real estate prices (especially vacation properties)  is not directly linked to wages for the middle and upper middle class.  

I haven’t owned an SVX in a really long time said:

pheller said:

Does anyone else think that as more and more people seek WFH arrangements, the average wage for those types of positions will stagnate, while office based positions will see a wage increase?

Yes. 
 

Many jobs will also ship overseas. 

Possibly. I know when I worked for TWG, under the Dover Corporation. They were already starting to see the limitations of using their cheaper overseas companies. 

For example, I handled most of the drawing change for Greer Electronics (1 of 6 companies under TWG and 1 of 4 in that particular building). They had the bright idea of starting to use the engineers in one of the Indian subsidiaries to start doing the drawing changes, because a Tech Writer in Oklahoma still made noticeably more than an engineer in India.

However, they quickly discovered it ended up costing dramatically more in real hours to use the Indian engineers. The production supervisor could walk upstairs, to me, with a redline drawing and have a corrected one within the hour. With India, email redline drawing, wait until the next business day, 8 out of 10 times, they couldn't handle correctly fixing a redline'd drawing, wait another day because of the time difference. 

So they went from a turnaround time of under an hour, to 2 days, because of the time difference. 

In my experience working in the tech world, when we acquire a new company because of their technology, they leave the employees and location in place, because that's where the expertise is. Regardless of what the news says, you can't just eliminate the 50-500 people who have the expertise in this particular product and ship it overseas. It just doesn't work that way. 

Sure for basic help support and such, but for the type of stuff we do, you aren't going to eliminate literally hundreds or thousands of years worth of experience to send the jobs overseas. You can't, unless you want the product to fail. 

Re: Housing costs, I don't think it is influenced all that much by people owning multiple properties. I think it the biggest factor is government interference - how long did we go without evictions and foreclosures, look at how much cash was pumped into the economy causing inflation. This is not a political statement, not a judgement of if it were right or wrong, or what could have/should have been done instead/in addition, just a statement about what is contributing to this.

What Toymans kids are seeing... That is happening in a lot of places. I think it is a warning of a bubble. My friends - college professor and an engineer - are living with her parents. They sold their house in 2020, and have been looking for a new one ever since. Can't afford it right now, despite saving like crazy, they're looking at what the prices are doing and just can't make it work. My parents just moved down the street, the people that bought their house (for $600k) had been living with their parents for a year and a half. 

This isn't sustainable. If the boomers don't start dying or downsizing quickly, something is going to break. And that isn't an "ok boomer" statement, it is just looking at who owns the houses that millenials and Gen Z want to buy, but can't afford. The problem with that... The boomers aren't really downsizing. My parents upsized when they moved (they wanted a first floor master, this house had it). My in-laws put in a chair lift for their stairs. I don't expect it to change, and honestly, if I were in their shoes, I wouldn't want to move either.

z31maniac said:

I haven’t owned an SVX in a really long time said:

pheller said:

Does anyone else think that as more and more people seek WFH arrangements, the average wage for those types of positions will stagnate, while office based positions will see a wage increase?

Yes. 
 

Many jobs will also ship overseas. 

Possibly. I know when I worked for TWG, under the Dover Corporation. They were already starting to see the limitations of using their cheaper overseas companies. 

For example, I handled most of the drawing change for Greer Electronics (1 of 6 companies under TWG and 1 of 4 in that particular building). They had the bright idea of starting to use the engineers in one of the Indian subsidiaries to start doing the drawing changes, because a Tech Writer in Oklahoma still made noticeably more than an engineer in India.

However, they quickly discovered it ended up costing dramatically more in real hours to use the Indian engineers. The production supervisor could walk upstairs, to me, with a redline drawing and have a corrected one within the hour. With India, email redline drawing, wait until the next business day, 8 out of 10 times, they couldn't handle correctly fixing a redline'd drawing, wait another day because of the time difference. 

So they went from a turnaround time of under an hour, to 2 days, because of the time difference. 

 

In my experience working in the tech world, when we acquire a new company because of their technology, they leave the employees and location in place, because that's where the expertise is. Regardless of what the news says, you can't just eliminate the 50-500 people who have the expertise in this particular product and ship it overseas. It just doesn't work that way. 

Sure for basic help support and such, but for the type of stuff we do, you aren't going to eliminate literally hundreds or thousands of years worth of experience to send the jobs overseas. You can't, unless you want the product to fail. 

I completely understand this, but it's not a direct comparison. 
 

In the past, the comparison was between working in-office and outsourcing overseas. Now, companies will have to consider the inefficiencies of WFH compared to working overseas. Some of the in-office efficiencies will already be lost. 
 

If companies have to consider ways to train staff and exchange information with people who do not work in the office already, there will be new reasons to reconsider the overseas opportunities. 

In reply to mtn :

I don't think the boomers even enter into it. The problem in my neck of the woods is the lack of available houses. 

The last report I read said 7 families move into the greater Charleston area per day. That's not 7 people, that's 7 families. So that's 7 houses or apartments per day being occupied. Houses are hitting the market and selling in under 3 days for $20k to $40k over the asking price.

In reply to Toyman! :

But it could be boomers moving into your area driving up prices AND creating the shortage. 
 

I'd think the greater Charleston area would be a desirable area for boomers/ upper middle class people .

I haven’t owned an SVX in a really long time said:

z31maniac said:

I haven’t owned an SVX in a really long time said:

pheller said:

Does anyone else think that as more and more people seek WFH arrangements, the average wage for those types of positions will stagnate, while office based positions will see a wage increase?

Yes. 
 

Many jobs will also ship overseas. 

Possibly. I know when I worked for TWG, under the Dover Corporation. They were already starting to see the limitations of using their cheaper overseas companies. 

For example, I handled most of the drawing change for Greer Electronics (1 of 6 companies under TWG and 1 of 4 in that particular building). They had the bright idea of starting to use the engineers in one of the Indian subsidiaries to start doing the drawing changes, because a Tech Writer in Oklahoma still made noticeably more than an engineer in India.

However, they quickly discovered it ended up costing dramatically more in real hours to use the Indian engineers. The production supervisor could walk upstairs, to me, with a redline drawing and have a corrected one within the hour. With India, email redline drawing, wait until the next business day, 8 out of 10 times, they couldn't handle correctly fixing a redline'd drawing, wait another day because of the time difference. 

So they went from a turnaround time of under an hour, to 2 days, because of the time difference. 

 

In my experience working in the tech world, when we acquire a new company because of their technology, they leave the employees and location in place, because that's where the expertise is. Regardless of what the news says, you can't just eliminate the 50-500 people who have the expertise in this particular product and ship it overseas. It just doesn't work that way. 

Sure for basic help support and such, but for the type of stuff we do, you aren't going to eliminate literally hundreds or thousands of years worth of experience to send the jobs overseas. You can't, unless you want the product to fail. 

I completely understand this, but it's not a direct comparison. 
 

In the past, the comparison was between working in-office and outsourcing overseas. Now, companies will have to consider the inefficiencies of WFH compared to working overseas. Some of the in-office efficiencies will already be lost. 
 

If companies have to consider ways to train staff and exchange information with people who do not work in the office already, there will be new reasons to reconsider the overseas opportunities. 

I would agree with both of you based on the experience in my company.  We realized the same inefficiencies in outsourcing to countries who's time zone did not align with ours and abandoned that process because of it.  However India isn't the only place to outsource.  We now utilize a lot of resources in Brazil as they are on the same time zone.  With WFH becoming the norm for my team I am seeing more jobs done offshore.  However it has not cost me headcount.  Rather it has increased my headcount as upper management was reluctant to pay for a new full time employee at the US cost but are more than happy to let me hire 4 for the same price out of Brazil.   We still have a need for boots on the ground, even if they are WFH as my US based employees are.  They still need to be available to be on site for projects which gaurantees they won't be displaced but we are getting augmentation from offshore and now having it in the same time zone its been very effective.

I haven’t owned an SVX in a really long time said:

z31maniac said:

I haven’t owned an SVX in a really long time said:

pheller said:

Does anyone else think that as more and more people seek WFH arrangements, the average wage for those types of positions will stagnate, while office based positions will see a wage increase?

Yes. 
 

Many jobs will also ship overseas. 

Possibly. I know when I worked for TWG, under the Dover Corporation. They were already starting to see the limitations of using their cheaper overseas companies. 

For example, I handled most of the drawing change for Greer Electronics (1 of 6 companies under TWG and 1 of 4 in that particular building). They had the bright idea of starting to use the engineers in one of the Indian subsidiaries to start doing the drawing changes, because a Tech Writer in Oklahoma still made noticeably more than an engineer in India.

However, they quickly discovered it ended up costing dramatically more in real hours to use the Indian engineers. The production supervisor could walk upstairs, to me, with a redline drawing and have a corrected one within the hour. With India, email redline drawing, wait until the next business day, 8 out of 10 times, they couldn't handle correctly fixing a redline'd drawing, wait another day because of the time difference. 

So they went from a turnaround time of under an hour, to 2 days, because of the time difference. 

 

In my experience working in the tech world, when we acquire a new company because of their technology, they leave the employees and location in place, because that's where the expertise is. Regardless of what the news says, you can't just eliminate the 50-500 people who have the expertise in this particular product and ship it overseas. It just doesn't work that way. 

Sure for basic help support and such, but for the type of stuff we do, you aren't going to eliminate literally hundreds or thousands of years worth of experience to send the jobs overseas. You can't, unless you want the product to fail. 

I completely understand this, but it's not a direct comparison. 
 

In the past, the comparison was between working in-office and outsourcing overseas. Now, companies will have to consider the inefficiencies of WFH compared to working overseas. Some of the in-office efficiencies will already be lost. 
 

If companies have to consider ways to train staff and exchange information with people who do not work in the office already, there will be new reasons to reconsider the overseas opportunities. 

Our company's WFH efficiency has actually gone UP compared to being in the office. To the point our Senior VP told us to step away from the computer some and take time for ourselves because we have been getting so much done. And just my team has offices in California, Washington, Waterloo, Atlanta, DC, Montevideo, London, Barcelona, and Brno. California to Brno is an 8 hour time difference. 

I don't know if this is normal, as I only have my personal anecdotal experience to go off. But I know the more you produce the more you are rewarded. We've all been WFH since March of last year, and now it's permanent, yet I received another raise and another 200 RSU's this summer. 

So regarding gear's point earlier, I don't think WFH is going to make wages stagnate. It's going to make it even more competitive for those of us with specific skills companies are looking for, because I no longer have to live in that city. However, I can see it being an issue for people who lack specialized skills. 

I was recently invited to apply for a similar position with a cybersecurity company that likely would have been at least a $40k/year raise, still working from home.  But I like my current job and would have left hundred's of RSU's on the table. 

In reply to I haven’t owned an SVX in a really long time :

We get a lot of both. But if all the boomers are moving south then the north should have plenty of cheap housing. 

I would bet there are more than a few WFH people moving south as well. 

In reply to Toyman! :

The North will always be a difficult place for lower income people to live. Even if rents dropped, they still have to pay for home heating oil, winter clothes, snow removal, higher taxes, etc, etc. 
 

Are you suggesting poor people could move from Charleston to the North?  Then they'd also having moving expenses, etc.  Ain't gonna happen. 
 

Northern property prices won't drop. It's much more likely they would fill with more people per unit to share the costs. Which creates other problems...

The growth in YOUR area is because your area is a nice area that is perceived (by some) to be modestly priced, and people are moving there because they can afford it (which pushes prices up). That doesn't necessarily create opportunities in other areas. 

In reply to I haven’t owned an SVX in a really long time :

I don't know anyone from the south that is interested in moving north.

My point was that if the older crowd was moving south in enough numbers to keep our prices inflated, then there should be plenty of housing in the north and pricing up there would be stable. That's obviously not the case so blaming the housing prices on the older crowd is probably wrong. 

You would probably have to look at it on a national basis to see where people were moving from and too. https://www.northamerican.com/migration-map

Then to chart the housing prices to see where they are going up or down. This only goes through 2017 but it's the best I can find. 

In reply to Toyman! :

I agree. It's complex. 
 

Toyman! said:

In reply to I haven’t owned an SVX in a really long time :

I don't know anyone from the south that is interested in moving north.

My point was that if the older crowd was moving south in enough numbers to keep our prices inflated, then there should be plenty of housing in the north and pricing up there would be stable. That's obviously not the case so blaming the housing prices on the older crowd is probably wrong. 

 

I'm in the North. I don't see many older folks moving south, in my circle. There are a few, but the majority are either staying where they are, finding places with a first floor master, or moving elsewhere in the midwest (Illinois to Wisconsin or Indiana)

They're contributing to the housing cost because they're not turning over the inventory. They're not downsizing. All anecdotal though. And this isn't blaming them - why would they move if they don't want to and don't have to? But the supply hasn't kept up, and part of that supply has been turnover. Life expectancy keeps going up (though we'll have a slight blip with Covid, I doubt it'll be enough to impact the housing from the supply perspective).

In reply to mtn :

I'm trying to follow you on this one...

I think Toyman and I both thought you were saying boomers were contributing to inflation because they were bringing lots of money to the market. You're not saying that... you're saying they are affecting inventory by NOT selling. Hmm.. ok. Let me chase that one for a minute...

So, let's say there are 4 primary housing types. Starter homes, move-up homes, and "forever" homes, and retirement homes. 
 

So, normally 40 somethings are moving from their move-up homes into forever homes, and 60 somethings move into retirement homes. The only thing the construction industry does is build for increased population or lost inventory. Now, with 60 somethings  staying put, construction can't keep up with the demand for forever homes. And it would roll downhill. 40 somethings would not be vacating their move-up homes, which would effect prices for twenty somethings wanting to vacate their starter homes. Etc, etc. 
 

Ok. That makes some sense. 
 

Here's what doesn't make sense.. That scenario would also imply that retirement homes would be sitting empty, and prices would be dropping because no one would be buying. THAT is most certainly NOT the case. 
 

It would also mean that construction would not need to be building move-up homes. It could focus their energy on starter homes and forever homes. Again, not the case. 
 

So, I'm hearing you, and tracking with you, but I think that is way too simplistic an answer to explain the entire dynamic. 
 

Prices go up because there is lots of money available. The boomers have some effect, and inventory is not rolling over, but 40 somethings who are willing to spend much more to try to push out boomers also effect the issue. As does government stimulus money. And PPP money. And commerce. And low interest rates. And the stock market. And the overall economy.  Etc etc. 
 

Inflation has to do with money, not age.

But thanks for the perspective regarding inventory rollover. It's another interesting angle. 

I haven’t owned an SVX in a really long time said:

In reply to mtn :

 

So, I'm hearing you, and tracking with you, but I think that is way too simplistic an answer to explain the entire dynamic. 
 

Prices go up because there is lots of money available. The boomers have some effect, and inventory is not rolling over, but 40 somethings who are willing to spend much more to try to push out boomers also effect the issue. As does government stimulus money. And PPP money. And commerce. And low interest rates. And the stock market. And the overall economy.  Etc etc. 

Note that I mentioned the lack of evictions and forelosures (taking out the bottom of the market), as well as the influx of cash into the economy, in my original post. 

I'm just looking at the average home owner in my area. The average home owner is a Boomer, on my street. Same with my parents (or an elder Gen X). Heck, my street only has 3 Millenial/younger Gen X families. I know a lot of millenials that want to buy here, but can't. 

But my town has no more lots, we're an old landlocked town that can't grow anymore. So we're getting condos downtown, that are being bought primarily by Boomers moving out of the city. 

This is just one upscale suburb of one city in the midwest though. Obviously an anecdote. 

We've had 13 years of below average new house starts, as in new build activity is not enough to house new population and hasn't been for over a decade. There just aren't enough houses, condos, and apartments. That combined with some people having higher than average investment returns and helicopter money and reduced spending due to lack of entertainment and travel spending and spending more time at home so wanting an upgrade it's the perfect storm for houses to spiral in cost. Who knows if it's here to stay my crystal ball is notoriously cloudy, but I doubt prices are going to return to their 2019 levels any time soon. 

I found a couple charts I'd seen previously that were pertinent:

housing starts:

population:

interest rates:

I know there's so much that goes into house prices, but even just those three factors combine to make a "omg houses are going to skyrocket in cost" scenario. Add in all the other factors pushing in the same direction and I'm not surprised we are where we are.

Also, the average person shops on monthly payment alone. And that really makes sense for something like housing. With rates as low as they are the average home buyer can afford a significantly higher purchase price and still be totally safe on the monthly payment. Unfortunately so can everyone else so it's not that they're getting more house than before, just more of the payment is going to principal than previously. 

In reply to dculberson :

That's what is driving prices locally. Supply and demand plus an excess of cheap loans. My daughter-in-law works for an attorney doing closings. She says it's kind of insane right now. People are buying houses for $30k+ what the houses are appraising for. The buyers are having to bring that much cash to the closing and are that far upside down in the house from day one. 

In reply to dculberson :

I think it has more to do with options and choices.  We Boomers are staying put because the rewards of choosing a retirement  home are not there.  
      A traditional retirement home is a smaller, single level home with payments  that can be made on Social security and or a retirement income.  Or paid completely from the proceeds of the "forever" home.   Often in a more friendly climate.  
      My neighbors. ( Boomers all ) who survived the 2008 recession are all in a place where our houses are homes. Family and friends are nearby as is our social network. 
     Since a winter is 6 months long and sometimes bitterly cold here. Several of us are buying ( have bought) homes in warmer climates. Thus removing a home from the market rather than replacing one.