Rents are falling in San Francisco.
It's both scary and awe-inspiring. And DailyWealth readers saw it coming.
Three months ago, I told readers a "wealth redistribution" was underway. We examined the first sign of this trend – remote work.
I predicted that the push toward remote work would redistribute highly paid tech workers around the country. The idea was based on simple economics...
People always prefer to spend less, if given the option. So it's smart to assume folks would flee San Francisco... if their employers allowed them to work remotely. Well, now we have hard evidence that it's happening.
Let's go over the details together. You might be surprised to learn this is a bullish trend for America...
I never expected this trend to get moving so quickly. I first wrote about it in May. And changes are already happening.
In San Francisco and San Jose, rents have fallen roughly 7% since March. Together, those cities make up the north and south side of California's Bay Area.
Now, you might be thinking, "Aren't rents falling everywhere?"
The answer is unequivocally, no.
In fact, rents have gone up in Sacramento. That's the California state capital, and it's only about an hour and a half north of San Francisco.
That's not all, either. A recent survey of 300 landlords in the city found that 7.5% of renters broke their leases in the past three months. That's much higher than normal.
So what does this mean? It's simple...
Money, not idealism, is why folks live in California's Bay Area. And money is the force behind this trend, too.
The mainstream press would have you believe differently. For some, California is a political hot button. Even if you've never been there, you know where you stand on San Francisco... So everything that happens there, good or bad, must be a result of politics. At least, that's what the pundits want you to think.
That's bogus, though. Economics are the real driving force here. This is a trend made up of real people, making decisions about their lives and their money.
Most folks haven't stayed in San Francisco because they're crazy idealists... They live there because of the economic opportunity.
Now that those folks can work elsewhere, they're getting the heck out. And rents are falling as demand falls. Simple.
I don't blame them, either. They'll be taking their high-paying tech jobs to smaller cities. Those salaries will go further. And the money they put to work in their new communities will be a rising tide all over the U.S.
So don't let the media fool you here. The people fleeing America's most expensive cities are just people.
They have high-paying jobs. And they now have the ability to take those high-paying jobs elsewhere... So they're doing it as fast as they can.
This is the kind of change that America needs. It will make economic activity less concentrated. It will spread wealth out among more communities.
Over the long run, this is a bullish trend. And I'm looking forward to seeing the innovation it spurs.
"Robots could soon replace real estate agents as we know them," Vic says. And if that kind of shake-up in the housing market sounds crazy to you, get this – it has already started happening. Get the full story here.
"Soon, your smartphone will be all you need... no matter where you go," Chris Igou writes. The pandemic isn't just spurring on the trend of working remotely. It's also accelerating another shift that's been building in the U.S. for years... Learn more here.
NEW HIGHS OF NOTE LAST WEEK
Thermo Fisher Scientific (TMO)… life sciences
Apple (AAPL)… iconic tech giant
Amazon (AMZN)… online-retail king
JD.com (JD)… “China’s Amazon”
Best Buy (BBY)… electronics retailer
Target (TGT)… big-box retailer
Procter & Gamble (PG)… consumer goods
McCormick (MKC)… spices
Williams-Sonoma (WSM)… cookware and decor
Lowe’s (LOW)… home improvement
NVR (NVR)… homebuilder
D.R. Horton (DHI)… homebuilder
Lennar (LEN)… homebuilder
Deere (DE)… heavy machinery
FedEx (FDX)… shipping
J.B. Hunt Transport Services (JBHT)… shipping
Booz Allen Hamilton (BAH)… “offense” contractor
Flutter Entertainment (PDYPY)… “vice” stocks
Boston Beer (SAM)… beer
NEW LOWS OF NOTE LAST WEEK
Not many… It’s a bull market, you know!