Folks Are Shifting Again to New York and Staying Away From the Bay Space

• People are flocking back to New York and staying away from Silicon Valley, Jefferies analysts said.
• USPS mail forwarding data shows New York occupancy is growing as financial giants reopen offices.
• Big Tech’s late return of offices is likely to lead to a population decline in the Bay Area, Jefferies said.

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In the US, the second phase of migration from the pandemic era has begun.

The pandemic and associated lockdowns sparked mass exodus from densely populated cities as millions of Americans moved during the crisis and many fled metropolitan areas. The vaccine-assisted reopening is now sufficiently advanced that some of these trends are reversing their course.

USPS email forwarding data suggests Americans are returning to major east coast cities, Jefferies analysts, led by Jonathan Petersen, said in a note this week. In Manhattan, 4.3% of households moved out during the pandemic, but regained 0.31% of occupancy by May and June. That figure should rise, the team said, as “all signs point to further acceleration into July”.

The moves could be related to financial services giants encouraging employees to return to their offices, Jefferies said. The news sparked “a scramble for apartments” as those who left at the start of the pandemic returned to New York.

Read more: Dealmaker dinners are back and interns are ready to hit the bars. Wall Street’s appetite is returning and New York City restaurants prepare for a rush.

Boston has similarly seen a quickening of summer migrations, the note said, while that city’s population is lower than it was just before the pandemic.

Chart over Jefferies.

Jefferies

Northern California, on the other hand, is struggling to recover. The occupancy change in San Francisco was flat in May and June, Jefferies said, and the total population remains about 3.4% lower than in March 2020. The decreases in Silicon Valley stayed around 0.2% each month. The lack of population growth could be explained by tech companies postponing their return dates to the second half of the year, the analysts said.

Sunbelt cities like Raleigh, Jacksonville, Charlotte, and Austin remain clear winners of the pandemic relocation cycle. The strong population growth continued into the second quarter, and occupancy rates rose more than 1% in many of these cities due to the pandemic.

Every market that saw net immigration in the second quarter was either in Texas or the southeast, Jefferies said. Four of the five fastest growing cities were in Florida’s major hubs such as Orlando, Miami, Jacksonville and Tampa, the company added.

Chart over Jefferies.

Jefferies

USPS data also suggests that the city-to-suburb exodus wasn’t nearly as large as early narratives suggested.

Rural areas benefited most from lockdown-related emigration, with population growth increasing in early 2020 and only slightly decreasing in the following year. And while the urban population has recovered with the reopening of the U.S., suburban occupancy has largely remained unchanged.

The city-to-country shift is likely to be driven by Americans moving into second homes in the country, Jefferies said. Those expecting permanent teleworking likely also played a role in the population shift, the team added. This means that the urban comeback could get even bigger in the coming months, especially on the east coast.