Finance

More Americans leaving San Francisco, New York due to affordability concerns

Published

2 months ago

August 7, 2024

Business Finance News

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The exodus from major cities in states run by Democrats continues.

A growing number of Americans are migrating from predominantly blue cities like San Francisco and New York, according to a Bank of America analyst note that is based on aggregated and anonymous internal customer data.

In the three-month period from April to June, there were “large population declines” in many Northeastern and Western cities, continuing a long-term trend that began during the pandemic.

New York and Boston saw the largest net population outflows in the Northeast, while San Francisco, Los Angeles, Seattle and Portland, Oregon, saw the largest drops in the West.

WALL STREET’S FEAR GAUGE SPIKES TO HIGHEST LEVEL SINCE 2020 AS GLOBAL TURMOIL DEEPENS

New York and California have some of the highest tax burdens in the country. San Francisco has also been plagued by a spike in property-related crime, according to the California Department of Justice’s Criminal Justice Statistics Center.

A truck is parked in front of a U-Haul facility on Aug. 31, 2020, in New York City. (John Lamparski/Getty Images / Getty Images)

Among the top 23 major metropolitan areas in the country, Columbus, Ohio, saw the biggest influx of people during the second quarter of 2024. That was followed by Austin, Texas; Las Vegas; San Antonio, Texas; and Jacksonville, Florida.

Texas, Florida and Nevada do not have a state income tax.

RECESSION FEARS, MARKET SELL-OFF RAISE ODDS OF A BIGGER FED RATE CUT

Still, the findings from Bank of America also show that fewer households are moving between cities, likely due to the increased “hidden” costs of homeownership. Homeowners’ insurance and property taxes are among the “hidden” costs that have spiked in recent years, particularly in the Sun Belt.

Gen Z and lower-income households were more likely to relocate in the second quarter, likely due to financial necessity rather than choice, the report said.

A view of downtown Austin, Texas. (iStock / iStock)

“In our view, the current level of inter-city moves is being held back by the ‘hidden’ costs of homeownership, alongside more overt costs such as higher mortgage rates,” the report said. “At the same time, Gen Z and those on lower incomes, particularly renters, are continuing to move.”

Affordability and cost-of-living are most likely the top reasons behind younger Americans and lower-income households moving.

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“It’s also important to note that it’s easier for younger and lower-income households to change addresses because a greater proportion of these consumers are renters rather than homeowners,” the report said. The homeownership rate is just 35% for Americans ages 25 to 30, compared to a 66% rate across all ages.

Finance

After rejecting Google takeover, Wiz says will IPO when ‘stars align’

Published

54 mins ago

October 18, 2024

Business Finance News

Wiz co-founder discusses the company's expansion into the UK

LONDON — Cybersecurity firm Wiz is seeking to hit $1 billion of annual recurring revenues next year, the company’s billionaire co-founder Roy Reznik told CNBC, adding that the firm will go public “when the stars align.”

Wiz makes software that connects to cloud storage providers like Amazon Web Services or Microsoft Azure and scans for everything it stores in the cloud, helping organizations identify and remove risks in their cloud environments. It was founded by four Israeli friends while they served in 8200, the intelligence unit of Israel’s army, and most of Wiz’s engineering personnel are still based in Tel Aviv, Israel.

Earlier this year, the company rejected a $23-billion acquisition bid from Google, which would have marked the tech giant’s largest-ever takeover. At the time, Wiz CEO Assaf Rappaport said the startup was “flattered” by the offer, but would remain an independent company and aim to list instead.

Speaking with CNBC at Wiz’s new office space in London, Reznik said that the company has received offers from “many people that want to get their hands on Wiz stock” — but that, while “very flattering,” the firm still thinks it can do it alone by going public.

“We’ve already broken a few records as a private company, and we believe we can also break a few more records as an independent public company as well,” Reznik said.

Four-year-old Wiz has raised $1.9 billion in venture capital to date, including $1 billion secured this year in a funding round led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital at a valuation of $12 billion.

In 2022, Wiz said it had reached $100 million in annual recurring revenue (ARR), up from just $1 million in 18 months. At the time, the startup said it was “the fastest software company to achieve this feat.”

Reznik, who is the vice president of research and development at Wiz, said the firm now hopes to double from the $500 million of ARR it achieved this year and hit $1 billion in ARR in 2025, which CEO Rappaport cited as a key condition before the company goes public.

UK expansion

Wiz has been expanding its presence internationally, with a particular focus on Europe, from where it sources 35% of its revenues. Last month, the firm opened its first European office in London.

“I think the talent here is amazing, and the ecosystem is amazing,” Reznik told CNBC. “We have always been very much involved in Europe — and specifically the U.K. — and I feel like it’s a natural evolvement of Wiz to double down even more here in London and the U.K.”

The U.K. represents a major growth opportunity when it comes to cybersecurity, Reznik said, adding that recent events like the cyberattack on National Health Service hospitals and an incident affecting Transport for London have “roof topped” the level of interest in the kinds of products Wiz offers.

“The cloud market is going to reach $1 trillion over the next next few years,” Reznik, who moved from Israel to the U.K. just three months ago, told CNBC. “This year is going to be around $700 million, while security is just 4% out of that, I would say. So that makes it a $30 billion market, which is huge.”

Speaking about the U.K. market, Reznik said: “We see a lot of interest here. Many of the largest banks and retailers, are Wiz customers. But we’re also seeing a huge potential for growth.”

Wiz’s customers include online retailer ASOS and digital bank Revolut as customers in the U.K.