The birth of the untethered class
That report continues: “Since jobs are not the only factor that keep people rooted, we propose a new concept — the ‘untethered class,’ composed of (generally well-paid, well-educated) workers (averaging around 32 years old) who are employed in remote-friendly occupations, but also are not tied down by homeownership or family obligations. As we’ve defined it, the untethered class consists of 8.7 million workers accounting for 5.6% of the total American workforce.”
Drawing on multiple data sources, the Apartment List researchers say that nearly a third of all jobs in this country are in occupations that can be performed remotely. There are significant regional variations, they add, but note that San Francisco already has the highest share of untethered workers at 13.5%. And, speaking to the potential for more to come, fully 46% of jobs in San Jose and Silicon Valley are remote-friendly.
A lot of people could be on the move
That’s a lot of people who, especially if they’re not living in their hometowns or near family, might just pull up stakes and move on to less expensive areas. The Apartment List report cites Los Angeles, Seattle, New York City, and Boston as other metro areas also vulnerable to that kind of exodus.
What does this mean to the real estate business, residential, commercial, and otherwise? The researchers write: “Given that so many untethered workers are living in the nation’s most expensive housing markets, many may choose to relocate to markets where they can afford to purchase homes and raise families more comfortably. While such a trend would be unlikely to lead to the demise of superstar cities, it has significant potential to reshape the markets that the untethered class moves to.”
History repeats itself, plague after plague
The phenomenon of people untethering themselves from their lot in life because of a pandemic is not new. The same occurred during the Black Death, the bubonic plague that wiped out a third to half of medieval Europe in the 1340s (and regularly resurfaced to diminishing degrees for 300 years).
In many large cities, many of those who could headed for the hills to wait out that initial storm. In another kind of untethering, the plague — largely known then as the Great Mortality — also largely eliminated the rigid class lines that divided folks into three estates: those who fight, those who pray, and those who work.
That’s because mass fatalities allowed access to professions such as the clergy and academia that had been largely unavailable to those not born into it, for example, and the merchant class began mixing with the nobility, who were largely landowners.
The Millionacres bottom line
This is a gross simplification, of course, and the differences between that pandemic and ours are far greater than their similarities.
But the point remains that in great tragedy there can come great opportunity, to those untethered enough from their preconceived notions to seize it.
In the case of real estate, those folks on the move are moving somewhere. Where they’re heading and what they’re leaving behind can both provide opportunity for alert investors.