• How Working Remotely Will Impact the Future of Real Estate •
The workplace, as we know it, is dying.
Those returning to the office following COVID-19 are doing so under new guidelines that include masks, rotations, and consolidated or shared workspaces. And while many jobs require people to be in a particular physical environment, one of the pandemic’s lasting impacts will be companies who will shun office space entirely in favor of work-from-home (WFH) scenarios. A recent survey of CFOs noted that they planned to permanently shift 20% of their employees to remote work to reduce costs.
So what do these WFH scenarios mean for an employee’s home base? Because the commute is no longer an issue, we think it means more freedom for people to live wherever they please–places that aren’t geographically dependent on one’s HQ.
Working from Home Changes the Where We Live
In a permanent WFH scenario, the real estate adage, location, location, location now means the freedom to live wherever you like. Individuals and families now have tremendous flexibility. This new rent anywhere, buy anywhere mentality is one that’s gaining traction.
“The next thing is the nature of housing is going to change. With all of this video conferencing, I think we’re starting to realize we don’t have to necessarily be tethered to one city. And so because of that, I think you’re going to see a generation of people that are less tethered to any one city and they’re going to want to live around the world. And so what we’re going to do is provide longer term stays, monthly rentals.”
—Brain Chesky, CEO of Airbnb on Masters of Scale Rapid Response Podcast, April 2020
For employees at tech companies like Twitter, Facebook, Google and others who have announced permanent WFH conditions, it is clear that in the next six months of 2020, more people will look to move either to or from their employer’s official offices.
Combined with historically low mortgage interest rates, supply and demand in the housing market will change. While no one can predict with certainty– Stay-at-Home orders in many cities and counties remain in flux, and a COVID-19 vaccine is still an unknown number of months away–there are some patterns we can expect to see.
Home buyers are looking for more space. During those moments when they aren’t tied to wifi and Zoom, now is their moment to flee cities in favor of suburbs and places they truly love. Always loved Tahoe but feared the commute? Worry no more. Surf every day but couldn’t be near the ocean because of the commute? You now have the freedom to move.
A Harris Research Poll found that two-thirds of employees working from home due to the pandemic (66%) would be at least somewhat likely to consider moving if they had the flexibility to work from home as often as they want.
In California, we know the high cost of living in major markets like the San Diego and Southern California gives people pause about where they buy a home (though these areas are still seeing strong demand). However, if you can get more home for your money in other parts of the state, who wouldn’t do at least some research and rethink their original home buying plan?
In case you’re curious… here’s what a 2-bedroom and 4+ bedroom home will cost you around California…
On Selling a Home If you’re thinking about selling your home but not sure if now is the time, consider this: home buyers fleeing urban markets are looking for homes in more-spacious suburban and rural areas. Sonoma State University Economist Robert Eyler believes “we might see some people who want to take their job and go someplace that’s less urban.”Also, there’s an ongoing housing shortage in California impacting supply. Sellers who took their homes off the market are beginning to list again, which is great for potential home buyers. More on this subject here. New Trends & Hot Spots Some things never change. Even during a pandemic. Home buyers are still looking for turn-key homes in good school districts, and with remote work and new task of home schooling, there’s less time than ever for fixing up a home. Given this new reality, it’s no surprise that:
- New home sales in California are up, with a 9% market share in the last 12 months.
- Urban families are looking for yards and suburban properties.
- San Diego is still a hot spot. Popular markets to buy a home include: North Clairemont, La Jolla, Point Loma, Linda Vista, El Cerrito, Carmel Valley, and Rancho Santa Fe.
What’s Next for California’s Housing Market? It’s clear there are profound changes taking place that should help states like California ease pressure on prices and inventory. People are on the move, and home buying and selling is rebounding since bottoming out in April, during the height of COVID-19. Now, it’s up to newly-untethered professionals to decide what’s important to them, given their new WFH reality has provided new ways to live and work, one of the few silver linings the pandemic seems to offer us all. Have any questions about buying or selling in your home city? Or maybe a new one?Connect with our team now or request a city market report!