The corporate culture has significantly transformed with the worldwide adoption of remote work. Employees are embracing the freedom to work from home (anywhere). This trend of the ‘new normal’ has triggered various changes in various sectors and the real estate market.
The added flexibility of remote working has opened up various options, like moving out of apartments and houses in the city to spacious suburbs. Today, homes are becoming more than just a place to eat, sleep, and chill— they have become spaces to work, learn, and recreate.
In this blog, we’ll discuss how remote work reshapes real estate, from changing housing preferences to reimagining urban spaces. Also, we will find whether remote working and housing real estate are interconnected.
Remote Workers and the Real Estate Market: How It All Began
Remote working was not new in the United States, but it was not a part of the mainstream work style. The trend of working from home became popular during the COVID-19 hit. Before that, almost all employees needed to go to office places.
During the pandemic, many businesses halted their operations temporarily or asked their employees to work from home (WFH). Now that everything is back on track, a few companies have issued orders for back-to-office, whereas others are continuing WFH. Also, some companies use a hybrid setup where employees visit the workplace a few times a week.
WFH: The Numbers
- According to the Gartner research company, 75% of big-name companies aim to permanently raise the number of remote workers.
- 60% of those who work from home would like to continue working from home, as stated by a survey conducted by Hanley Wood.
- Based on an analysis conducted by Morningstar Inc, 13% of the U.S. population is expected to work from home post-COVID post-COVID.
The WFH environment has increased employees’ quality of life in many ways. As commutes are virtually extinct, people can spend more quality time with family. Furthermore, another benefit of the WFH trend is that companies can take advantage of the now much larger talent base. Having said this, however, there are also cons to the WFH trend.
Relationship Between Remote Working and Real Estate
Remote working directly impacts the real estate world. Many people have moved to areas or cities with less strictness during the pandemic. People no longer need to live near their workplace but choose to move to a quieter lifestyle. They can have larger, more spacious homes unavailable in the cities. With this migration, the demand for properties in these areas has changed, increasing the prices.
Pros: Residential
Residential properties were on surge during the pandemic. Remote work has created an impression of a housing shortage, as many people were looking to buy homes then. But, the housing shortage was just an illusion, as the increase in demand was likely due to the rise in WFH. Here are the pros of remote working on residential real estate:
- Housing investment looks stronger than ever.
- Mortgage rates are at their lowest levels on record, and a boom in work from the home economy.
Urban lovers are giving up their city lifestyle to save on money. According to a Hanley Wood survey, over 36 percent of workers agreed that they would consider moving to a different place if given an opportunity of permanent WFH. Furthermore, Facebook CEO Mark Zuckerberg said that 75 percent of his workers showed interest in moving to a different city if they could work remotely. With remote working in mind, residents seek properties with a dedicated home office. It could be a spare bedroom, a basement, or even a sizable corner. Buyers are interested in purchasing properties that will allow them to separate their work life from home life. In multifamily properties, a coworking space is a good amenity option that residents and investors will consider.
Cons: Commercial (Office)
With the emerging trend of remote working, residential real estate and commercial real estate are also impacted. Many companies choose to downsize their office buildings as the employees work remotely or in a hybrid. Here are some cons of remote working in the commercial market:
- Companies no longer have to manage office spaces due to the pandemic. Therefore, cubicles, break rooms, and employee coffee or food are no longer necessary. Hence, this has adversely affected the commercial real estate market.
- Businesses now have the option to save a lot of money which they spend on rent each month, as there is no need for a big space to accommodate all employees. Even for hybrid patterns, companies can pick rolling schedules where all employees do not need to come together.
- Builders will choose to build smaller office spaces. Companies can also move to less urban areas to save on rent.
The workplace is going through a transformation. However, a recent JLL study found that companies would embrace hybrid models. Instead, the balance of remote work versus in-office work would be on the company’s shoulders, work nature, and personnel.
More People are Moving to the Suburbs
With the WFH trend, employees have realized that they can work from anywhere. All they need is an internet connection with a good speed. This means they no longer need to commute to the workplace every day.
Suburban areas and cultural hubs are experiencing an increase in new residents. People find these places more attractive as they find a higher quality of life with lower living costs. Remote working has redefined the way people look for their new homes. Now, their search has expanded, and they also look for the far areas, as they don’t have to go to the office daily.
The real estate market is growing in large cities and densely populated areas and has regions covered with fewer residents. People can move to their dream location or a place with lower tax rates or live anywhere they wish to.
Understanding Real Estate in the Era of Remote Working with BFPM
As you know, remote working has a clear relationship with real estate. The trend shift towards remote working was significantly noticed during the pandemic. This might impact the housing for remote workers even further. Let’s see to what extent it goes.
Our expert property managers at BFPM have updated data on market trends and investment properties. They will assist you with the investment options. You can reach us even if you are looking for a suburban property. If you are a remote worker looking for a house with remote working space, we will let you explore that area, too. You can list down your preferences and share them with our experts. They will assist you to get the best options.
Feel free to contact us at BFPM and explore the real estate world.
Ashley Robinson
Ashley Robinson is a content marketer and lover of all things real estate. As a professional, she thrives when questioning the status quo and prides herself on her creativity, idealism, and enthusiasm. When she's not busy conducting market research, Ashley…Learn more about how we can help. Customized solutions for large portfolios!