This pandemic seems to have been good for real estate located in places that people like to spend time in, but maybe had to limit their time there in the past because of things they had to do like, you know, work in an office. This includes everywhere from "cottage country" outside of Toronto to sunny destinations like Miami.

Here are some figures that I came across for South Florida via Analytics Miami. Comparing November 2020 to a year prior, condo transaction volumes in Miami-Dade country are, interestingly, up 4.3% for condos less than $1 million and up 61.4% for condos worth more than $1 million.

Somewhat similarly, single family home transaction volumes in Miami-Dade county (for the same time period) are down 5.2% for houses worth less than $1 million and up 100% for houses worth more than $1 million.

Sometimes you see a decline like this (the -5.2%) because there simply aren't enough houses on the market for less than $1 million. But it could also be that more rich people are looking for expensive properties in Miami compared to last year.

As you may have gathered from here and here and here, I'm not all that bullish on the permanency of this whole working from home thing. But there's no denying that there's a very clear trend around people moving to places that are warmer. This was happening well before COVID-19.

There is also some evidence that rich people are starting (continuing?) to eschew high tax states like California for lower tax states like Florida and Texas. I don't have the data to be able to comment on how meaningful this trend is, but, for whatever it's worth, apparently Elon Musk just moved to Austin.

Photo by aurora.kreativ on Unsplash

I have a friend who is a big fan of Tesla. And judging by what's going on with the company's stock these days, he is not alone. This morning he sent me this article talking about how Tesla has introduced an entirely new business model for the automotive industry. The two key takeaways are as follows. One, Tesla is in many ways a software company. The hardware and software onboard each vehicle are continually getting better and oftentimes these improvements are delivered to their customers for free via over-the-air updates. This is not how the incumbent car companies work. And two, fully electric vehicles are going to crush after-sales revenue by virtue of the fact that electric vehicles simply don't require the same amount of service. So now you're in a position where the cars last longer (and apparently depreciate a lot less). This might seem bad for business, but if you can build an ecosystem of energy products and services around said car, then maybe you've got a big ass Tesla moat. Maybe. I have no idea what the company should be valued at today, but all of this is interesting to me and I'm fairly certain that the car I have right now will be the last combustion engine vehicle I ever own. Depending on when autonomy arrives, it may also be the last car I ever own.

Frederic Filloux publishes a regular newsletter called the Monday Note. It's generally all about tech and new emerging business models. His latest post, called "Code, on wheels," is about Tesla and the software revolution that is currently underway in the car industry. And it's a good reminder of just how unique Tesla appears to be as a car company and how software is bound to infiltrate all aspects of our economy. Already you're hearing people make a distinction around "pure" software companies. This is necessary because of how ubiquitous it has become.

Here is a a longish excerpt from Filloux's article:

But the ultimate leap in value will be the creation of an application ecosystem. The limit will only be the imagination of app creators. As an example, airport operators are likely to develop apps to manage car traffic and passenger flows. Here is a use case: Your flight departing from San Jose Airport leaves in an hour. Your dual app system — one in your phone, the other in the car — checks the flight status, the gate, and the traffic. It notifies you when it’s time to leave. Once in the vicinity of the airport, the app guides you to the parking space nearest to the gate. An alternative and slightly more futuristic scenario involves you dropping your car in front of the terminal, then letting the autopilot send the car to the long-term parking lot a few miles away (this will soon become feasible as geofenced environments such as airports will be well-suited for Level 4 autonomous driving).

Again, this implies major changes in the way car software is currently handled. These scenarios require the car and the phone apps working seamlessly, exchanging data in real-time with the airlines, the airport, the navigation system of the car, the parking infrastructure, and eventually, the autopilot. We are not there yet, but by that time, the dust will have settled: either carmakers will have developed their own OS — along with the SDKs to foster the development of third-party apps — and/or, tech giants will have taken-over, leveraging their current market positions in the phone sector to impose their own norms. I always thought that Apple had that in mind when it hired legions of engineers for its Titan project and filed applications for self-driving cars to the California Department of Motor Vehicles. I doubt that they completely gave up on the idea of replicating what they achieved for the 500 billion smartphone market with the 3 trillion dollar car sector.

There are many in the planning world who are quick to dismiss autonomous electric vehicles as being more of the same. They're still cars, right? For better or for worse, the internal combustion engine was massively transformational to cities -- just as previous advances in transportation were. But what comes next is still mostly unknown because, even if you assume that autonomy is a foregone conclusion, it's unclear how this and an app ecosystem could change how "cars" function in our cities. What will be the spatial impacts?

It is, however, clear to me that when things do start to really change, it will be because of software.

Photo by Jannis Lucas on Unsplash