TENS OF THOUSANDS of people left Silicon Valley during the COVID-19 pandemic, but local housing and economics experts aren’t too worried about the mass exodus.
The metro area encompassing San Jose, Santa Clara and Sunnyvale lost nearly 43,000 people between April 2020 and July 2021, according to recently released census data. That’s almost eight times more than the year before the start of the pandemic when the region lost roughly 5,400 residents.
“One way to look at it is, ‘Oh my gosh, the sky is falling, people are leaving,’ but that’s not happening at all,” Russell Hancock, president and CEO of Joint Venture Silicon Valley, told San José Spotlight, adding people moving away is a positive development for the region’s traffic congestion and housing shortage. “Instead, (the exodus) spreads the Silicon Valley footprint further and spreads that opportunity over a larger swath of territory.”
The trend is mostly driven by people moving away from the area, data shows. Silicon Valley also saw a big jump in its death rate, likely exacerbated by the pandemic. More than 13,000 people died between April 2020 and July 2021 — a jump from nearly 3,000 deaths the previous year.
Alleviating the pressure
Local experts agree the exodus is a trend to watch, as it reflects the reality of the growing number of dissatisfied residents, a drop in quality of life and the rising cost of housing. But some think it might be beneficial for the area, alleviating some pressure on scarce resources such as housing.
Hancock said many workers laid off or furloughed from their jobs at the beginning of the pandemic moved, as they could no longer afford the sky-high rent in Silicon Valley. Tech workers who got sent home also relocated to neighboring areas for more affordable or bigger homes once remote work became common.
“If companies are pulling up stakes, relocating some other place and taking their workforce with them, that’s a very big deal, but that is not happening.”Russell Hancock, Joint Venture Silicon Valley
The trend is not isolated in the South Bay. The greater areas of San Francisco, Los Angeles, Chicago and New York also lost large numbers of residents over the same period, with San Jose being the fifth largest metro area in the nation to experience an exodus.
Areas surrounding the Bay Area where it’s more affordable, such as Contra Costa County and the eastern side of Alameda County, had an uptick in residents in the first year of the pandemic, Hancock said. Joint Venture doesn’t have data on the demographic of the workforce that relocated during this period, but Hancock said the 2021 number isn’t a big concern from an economic standpoint.
“If companies are pulling up stakes, relocating some other place and taking their workforce with them, that’s a very big deal, but that is not happening,” he said, noting the area has 1.7 million workers. “So 40,000 is actually a minuscule percentage.”
During the pandemic, companies such as Apple, Google and HP all initiated plans to expand their footprint in the South Bay, he said. San Jose is teeming with high-rise tower and mega campus projects.
Rental market cools
For Brett Caviness, president of the Silicon Valley Association of Realtors, the exodus is most evident in the drop in rental demand during the pandemic.
“What we did see was heightened demand for single-family homes, where people were gaining outdoor space and also interior space,” Caviness told San José Spotlight.
Caviness said the census data is already outdated in Silicon Valley’s real estate market, as realtors are seeing a surge for rentals and condos again. Single-family homes are selling roughly 12 percent over asking price on average, he said, noting he’s seen some recent offers come in 30 percent over asking price.
“Even 30 days ago was kind of ancient history in our real estate market,” Caviness said. “Tenants have seen maybe a bit of relief in the last 24 months, and people were able to purchase properties below values that we saw in 2018 or 2019, but that window may have closed now.”
Contact Tran Nguyen at email@example.com or follow @nguyenntrann on Twitter.