As more countries sign up to serve the growing digital nomad contingent, and as once affordable suburbs struggle to meet the demand for real estate, we find ourselves at the intersection of libertarian, entrepreneur, and nomad.
Sometimes it feels like the news comes as 1,000 pieces to four different puzzles. I’ll see one story and read it, but it feels incomplete; as if there’s a bigger story but that’s in a different article.
I’m as guilty of bias as anyone. It’s no secret that I see things through the lens of a libertarian, nomadic, entrepreneur… Or is it entrepreneurial, libertarian, nomad? Maybe it’s entrepreneurial, nomadic, libertarian. Depends on the issue and the mood, which order I evaluate it, but I make no bones about how my values influence my opinions.
This last year and a half was like someone took the real estate snow globe and put it in a paint mixer! I want to be careful not to draw too many correlations between the bubble forming now, and the bubble of 2008.
While there are parallels, 2008 was unique in that banks were giving loans to sub-prime borrowers who were not at all vested in the properties they were buying… along with record low interest rates.
This isn’t quite the same for a few reasons:
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The borrowing requirements became much more stringent because of the moratoriums and deferment plans offered during the lock-downs.
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But borrowing was being encouraged as a stop-gap for the uncertain re-opening of the economy, so interest rates were dropped even lower than they already were.
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As lock-downs persisted, those who could work from home, did… and then they started working from other locations. Maybe it started with working from their parents’ home to be with family. Then it shifted to working from an Airbnb because if you’re going to be cooped up somewhere, why not change up the scenery a bit?
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With all the equivocating on reopening phases in the larger metropolis, many businesses capitulated and just made working from home more permanent. This became a trend, which lead to a sort of diaspora from large, densely populated, expensive cities to smaller, less populated, affordable areas.
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A deluge of demand from new migrants with money hit areas that were not ready for that level of demand, and naturally, housing costs went up.
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So two things are happening: on the one hand you have people who are taking advantage of moratoriums on rent and mortgage payments, and on the other you have people gold-rushing less expensive areas ready to take just about anything.
And this is rocking markets across the US. Boise, Phoenix, Tucson, and Las Vegas all saw incredible leaps in the cost of rent alone. There is a literal shortage of housing in some of these places where it doesn’t even matter that you have the money to pay for it!
Houses are being swept up the moment they hit the market, with contingencies being waived left and right. And apartments are seeing a similar surge where it doesn’t matter how much you make, there isn’t enough supply to meet demand. There are people shacking up in hotels on wait-lists.
The dust will eventually settle once developers catch up, and moratoriums end. Between new housing and new vacancies from evictions, there will be a course correction. Still, the trends that spiked in 2020 and 2021 might wane some, but they aren’t going away.
Trends such as travel, digital based businesses with omni-channel offerings and working remotely are here to stay and grow. There’s some snap-back, but we aren’t going back to pre-pandemic times, that’s for sure.
Obviously, it’s not just little suburbs and hamlets in the US that are eager for some of this booming action. Little suburbs and hamlets around the world are hopeful to get these location-independent folks into their area as well.
As I’ve mentioned, a lot of countries are creating visas for longer term stays. Spain is the most recent addition to this list! I think this program is pretty cool because it’s not the country of Spain saying, “Get a visa! Here you go! Good luck!”
This program seems very thoughtful. It has a lot of similar feature to that of Italy and Portugal: smaller towns are particularly hard-hit in the wake of all the COVID response, so they are trying to find new money and jobs to come and revitalize their communities.
The program is called Red Nacional de Pueblos Acogedores para el Teletrabajo (or National Network of Welcoming Villages for Remote workers). Towns and villages country wide can opt into this program to take part in welcoming in digital nomads. Included in the program is a host who helps you get acquainted with the area and set up with amenities.
They even offer an interactive map to help you make plans!
All this to say that these trends that once occupied a back burner in the marketplace, are making their grand entrance and staking their claim. With these new markets in play, come new opportunities for business.
Even before the pandemic set in, we were seeing a general trend toward the experiential over the material. While retail was lagging, restaurants and hospitality were picking up. After a year of lock-downs, people are starved for the experiential again.
Digital nomads still have to work, but what can you add as an entrepreneur to make that experience richer? Spain, Portugal, and Italy are offering the experience of romantic provincial ambiance. This is probably particularly alluring to the city mice who would love to get out and away from the hustle and bustle.
Can you offer something better than an overpriced wait list for an apartment? Can you offer something to accommodate those who are waiting to buy or rent? Can you offer an alternative to what they are doing now? Can you make that wait a little more bearable? For people who have already set out on the digital nomad path, are there hacks and insights that can make things a little easier on them?
But there are so many things yet to be offered! This burgeoning and thriving sector is its own market. Their needs are particular and unique to their circumstances. The assortment of different apps and services they’d gladly pay for are endless.
Unlike other market segments, serving digital nomads opens up an opportunity to become one yourself as a service provider. The services themselves will mainly be virtual, so that puts the entrepreneur in an actionable position to set out on a nomadic adventure of their own.
This is the correction and adaptation of the market to the latest curveball tossed by central planners. Between a story about people scattering, to a story about housing shortages, to a story about the permanence and growth of the digital nomad community. You put it all together and you get a business and possibly a life altering opportunity to be part of something pretty cool.
Indeed three seemingly unrelated stories make for the perfect libertarian, entrepreneurial and nomadic concoction.
If you are interested in getting a business started, or seriously considering the digital nomad lifestyle, let’s talk!
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