San Francisco faced a huge population exodus during the first year of the pandemic, but new research from LinkedIn suggests that younger, professional workers—who helped power the region’s economy in the Before Times—are starting to trickle back.
The Bay Area ranked second out of all U.S. metros in the number of professionals settling in the area, according to the data. The study—which tracked where LinkedIn users set their location—found that out of every 10,000 San Francisco users, 88 moved to the area over the past 12 months.
LinkedIn also recorded where those people were coming from, with Los Angeles at the top of the list. Ranking second and third, respectively, were the Dallas-Forth Worth area and Washington, D.C.
The only area to attract more professionals, according to the Linkedin data, was Austin. As it happens, Austin was also the most popular destination for folks leaving the Bay Area, ranking above Sacramento, Seattle, San Diego and Denver.
San Francisco Chief Economist Ted Egan said that residents moved around the Bay Area as remote work became the norm. But many workers are still positioning themselves for an eventual return to the office, he said.
“The housing data says people are moving further away from office centers, but upper-wage workers are not en masse moving to lower-cost metros as if they didn't care where their job is physically located,” Egan said. “They’re positioning themselves for a longer commute; they’re not positioning themselves for a longer work-from-home.”
Put another way: The era of digital nomads permanently decamping to Hawaii appears to be largely over.
The San Francisco metro area had one of the steepest population declines over the first year of the pandemic, with a roughly 2.5% drop according to census data. That loss was even starker in San Francisco proper, which lost an estimated 58,000 people, mirroring a larger national movement away from dense, urban areas.
Monthly change-of-address data from the U.S. Postal Service shows that the pace of outmigration from the city has slowed considerably since its peak in August 2020. The numbers are currently in line with figures seen in the pre-pandemic era.
The city’s status as a travel hub from Asia, along with demand for highly skilled technical workers, made it a popular destination for international immigrants prior to the pandemic. Pandemic-related travel restrictions largely put a stop to that influx of new people.
But a U.S. Census data estimate released last month found that net migration to the U.S. from abroad in 2022 reached its highest level since 2017. California is expected to be the biggest beneficiary of this uptick, with more than 125,715 new residents coming to the state last year.
Hans Johnson, a demographer at the Public Policy Institute of California, said international migrants are vital in filling labor gaps by countering the number of Californians aging out of the labor force.
“Over the last 15 years or so, immigration from Asia has become the leading origin of migrants to California,” Johnson said. “A lot of that is tied to opportunities in tech. [...] Immigrants from Asia tend to be some of the most highly educated residents of the state.”
The Bay Area remains the center of the tech world, even amid larger volatility in the sector.
In San Francisco, interest in artificial intelligence has created a bumper crop of “hacker houses” in the Hayes Valley neighborhood filled with young techies working to build the next big thing in AI.
"We’ve seen some exodus, but it’s cyclical. In the past eight weeks, I’ve had six texts from friends saying they were moving back,” said James Currier, a general partner at the venture capital firm NFX in a recent interview.
The San Francisco Bay Area remained the top market for receiving VC funding during the last quarter, capturing 35% of the total, nearly three times the proportion of New York, according to CBRE research.
San Francisco itself was responsible for more than half of the nearly $61 billion funding total.
Kevin Truong can be reached at [email protected]
Noah Baustin can be reached at [email protected]