Every government leader across the world talks about having internet access across their country to allow the citizens to do more from where they live. It is a noble idea, for those of us who are from a smaller town, we like it as a policy. For generations there has been a shift from the rural or country towards cities for people to work to make more money and have greater opportunity to move up in their fields. As a society we thought this was normal, however as work for more people became in the service industries, the reality of going to the office everyday seemed it could be challenged. If you could have good internet that is secure, you could work from anywhere including not at the office. It was more of a pipe dream for millions of commuters and then COVID happened. People and companies adapted to ensure home internet was available and secure. However, most companies pay rent on office space, why would they pay rent on office space and not see someone in that office space?
In an article by Mike Schneider of the Associated Press, people working from home became younger, more diverse, better educated and more likely to move during the worst part of the COVID 19 pandemic. According to the US Census Bureau, working from home went from 5.7% in 2019 to 17.9% in 2021.
The increase in homebased workers corresponded with a decline in drivers, carpoolers, transit riders and most other types of carpoolers.
The two industry groups most affected by working from home were information from 10.4% to 42%; finance, insurance and real estate from 10.8% to 38.4%.
In the tech-heavy San Francisco more than 1/3 of their labor force worked from their home in 2021.
Linking to dividend paying stocks, if you live in an urban environment, you will see large office buildings which bring in millions of dollars in rent. If you added the vacancy rates which is generally well published, and as those rates are high do you believe they will fall? Most real estate companies buy on credit and the rents pay the loans, plus extra. If the plus extra is not included, do you still want to town the shares in the companies which open the office building? Trends happen to all industries and when you define how your investment makes money, you can take the next step of should I hold, buy more or find alternatives?
There are more questions than answers, till the next time – to raising questions.