How is Remote Work Really Impacting the Real Estate Market?

These days, more people work from home than ever before, as 58.6% of people are classified as remote workers. This shift to staying home has brought a lot of changes for many people.

For some, staying home for a while has meant learning a new hobby, like baking homemade bread from scratch to enjoy while catching up on Tiger King and reality TV. For others, working from home has inspired them to move to new locations. Whether you fall into both categories or just one, you’re certainly not alone!

In fact, remote work has changed real estate in many ways. Here are the top examples of how remote work and real estate have affected each other in the last couple of years.

People Are Leaving Large Cities Behind

Before the pandemic, most people needed to live a short commute from their jobs since they were going in to work every day. This necessity led to people choosing to live downtown, or at least within a half-hour of a major city, where the highest number of businesses were concentrated. After all, the average commute to work was just under 28 minutes as of 2019.

But now, more people than ever have a much shorter commute, about ten seconds—approximately the time it takes to get from their coffeemaker to their computer at home! This means employees no longer have to worry about living close to downtown workplaces. As a result, ever since 2020, real estate professionals have noticed people moving out of big cities, showing a change in remote work and real estate.

More specifically, big cities with populations of 1 million or more lost the most residents during the pandemic. This includes New York City, Los Angeles, Philadelphia, San Francisco, and Chicago. Residents of these cities realized they could get more house for their money by moving to the suburbs or even rural areas while still keeping their jobs.

This is a big reason that so many suburbs have increased in population recently, pushing housing prices up and housing supplies down as remote work and real estate adjust to current needs. By contrast, it’s now slightly less expensive to live downtown because housing prices are flat or even dropping in urban areas while they’re still rising in the suburbs. So if you’ve always wanted to live in a bustling downtown area, this is the time to look for a high-rise condo or apartment that may be more affordable than usual.

Home Offices Are a Necessity

Another way remote work and real estate have changed is the need for a home office. A mere 6% of people worked remotely in 2019. This meant a home office was nice but not expected—much like a home gym or a wet bar.

Since then, remote work and real estate have evolved together, leading to an increased need for home offices. In fact, one survey showed that 63% of home buyers want a home office and over 20% say a home office is essential. That’s why in 2020, any good home description on a listing mentioned a dedicated home office or at least extra room to make one.

Built-in desks suddenly became a big selling point, as they could help buyers imagine themselves working remotely from those spaces. Even people searching for apartments to rent opted for two bedrooms instead of one so they could create their own home offices.

With remote work remaining so prevalent, you can expect this trend to stick around for a while. If you’re selling a house any time soon, make sure you can find a spot in the home that you can market as a home office—whether it’s a whole room or a little nook with just enough space for a small desk.

Buyers Are Putting More Thought Into Where They Live

People who work 40 hours a week or more—and then face a lengthy commute—are simply not home a lot. But remote work has changed that. Now that so many people spend all day at home, they want more space.

That’s partly why they’ve left downtown areas in search of the larger lots they can get in suburban cities and rural areas. They’re able to trade in their 1,000 square foot condo for a 2,500 square foot home where they can spread out—and save money at the same time!

It goes beyond just extra room. Many people realize they want to be truly happy in the place where they spend so much time, so they’re either upgrading their current homes or looking for new homes with fun or luxurious extras. Some examples of features buyers now look for include home gyms, dens, finished basements, game rooms, resort-style backyards, modern technology throughout the home, and upgraded kitchens and bathrooms.

More Real Estate Processes Are Done Remotely

Work is not the only task people do remotely these days. Many people have become so comfortable with getting work done while at home that they don’t even want to leave to buy a house. They expect at least some aspects of buying real estate to take place online. This is especially the case when they’re moving across the country, as they can’t easily take trips out of state every time they want to see the new house or sign paperwork.

Fortunately, most parts of the real estate process can be done online, showing that remote work and real estate can go hand in hand. For example, buyers can look for listings online, communicate with their real estate agent via phone and email, and attend virtual tours instead of in-person open houses.

Once they choose a house to buy, they can sign documents digitally and stay in communication with lenders and real estate professionals from anywhere. They can even attend an eClosing—thanks to new options like remote online notarization.

As you can see, remote work and real estate have evolved together over the last few years. If you work remotely now and are thinking about buying a house farther from your workplace, it’s time to talk to a lender about your loan options or even get pre-approved! Contact LemonBrew Lending today to find out how we can help you get approved for the home of your dreams within your budget.