Remote Workers Are Transforming Housing Markets
Since they can live and work anywhere, they’re heading to mid-tier cities nationwide, leading to a surge in home and rental price in these areas.
NEW YORK – Remote work since the pandemic has fueled the flexibility for Americans to leave larger cities near job centers and move elsewhere to farther-out locales.
“They can live and work anywhere, and that’s what they’re doing,” Mark Zandi, chief economist at Moody’s Analytics, told Barron’s.
They’re flocking to mid-tier cities nationwide, leading to a surge in home and rental prices in these areas. For example, in Boise, Idaho – one locale seeing a jump in remote workers’ relocating – saw its median home price surge by 41% compared to a year earlier. The median sold home price is $469,100 there.
Home prices rose by more than 35% compared to a year ago in the second quarter in pockets across the country, such as the Gulf shores of Florida to Idaho’s Treasure Valley and Massachusetts’ Berkshire County, according to National Association of Realtors®’ data. All three of these locales have a higher-than-average share of out-of-state views of their real estate listings.
Also, New Yorkers, for example, are increasingly shopping for homes in Connecticut’s Fairfield County. Los Angeles residents are increasingly looking in Riverside and San Bernardino for housing.
The pandemic accelerated migration to more affordable areas from pricey city centers, Zandi told Barron’s. When employees do have to return to work in person, more Americans say they’re fine with having a longer commute too. Sixteen percent of consumers said they’re willing to have a longer commute now; 22% of millennials said they’d be willing to extend their commute, according to a realtor.com® survey.
Some remote workers are showing a willingness to live further than just the suburbs or exurbs of the metro area where they currently reside. For example, West coasters are showing a greater desire for areas in Boise and Las Vegas. New Yorkers are increasingly hunting for listings in Miami and Tampa. In Washington, residents are looking at Baltimore and Philadelphia.
The new remote work migration is helping to grow small housing markets that don’t have strong economic centers. “Ghost towns of the past now have a future again,” Susan Wachter, professor of real estate at the Wharton School at the University of Pennsylvania, told Barron’s.
Source: “Remote Workers Are on the Move. What It Means for the Housing Market,” Barron’s (Sept. 13, 2021)
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The COVID-19 pandemic paved the way for the further growth of remote work arrangements in the country. The increasing acceptance of this setup allows workers to pursue more flexibility and productivity in the comfort of their homes. Inevitably, this huge shift has affected the real estate industry in many ways.
With homes doubling as offices now, working professionals are more particular about what they are looking for in their residences. Aside from affordable housing, they want home offices, spacious areas, walkability, and more.
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