The COVID-19 pandemic devastated many major industries across the world. Restaurants, tourism, and airlines are just a few of the industries that saw a major decline in revenue since 2020. On the other hand, technology companies like Zoom and Amazon were major beneficiaries of the pandemic.
However, remote work has also had a substantial impact on the housing market and continues to wreak havoc on housing prices and interest rates today.
Continue reading to find out the impact of remote work on the real estate market and how you can prepare when deciding to buy or sell your home this year.
The Shift to Remote Work
Remote work isn’t a completely new concept. In fact, 25% of employees worked remote jobs prior to 2020 and many employers allowed workers to work a hybrid schedule.
But the rise in remote work started to take off shortly after COVID broke out in the United States. Home values soared while interest rates dropped to historic lows. This ended up being the catalyst for record-high appreciation and an unprecedented increase in home values.
The Impact of Remote Work on the Real Estate Market
According to the Bureau of Labor and Statistics, the surge of remote work increased home prices by 15% from November 2019 to November 2021.
Here are some additional ways remote worked affected the real estate industry:
Changing Location Preferences
With the flexibility to work from anywhere, many employees have reevaluated their living preferences. Suburban and rural areas have seen an increase in demand as individuals and families seek larger homes, more space, and access to nature.
Rise of Remote Work Hubs
Certain cities and regions have adapted to the remote work trend by becoming attractive hubs for remote workers. These locations offer incentives, infrastructure, and amenities tailored to accommodate remote work, leading to an influx of new residents and potential economic growth.
Rental Market Fluctuations
The rental market has experienced fluctuations due to remote work. Some renters have chosen to move away from expensive cities to more affordable regions, leading to decreased demand in urban rental markets. On the other hand, rental markets in suburban and rural areas have seen increased demand, potentially leading to rising rental prices in these regions.
Housing Policy and Planning
The surge in demand for housing in specific areas due to remote work has prompted the need for updates in housing policies. Policymakers must address issues related to housing affordability, supply, and urban planning to accommodate the evolving housing demands.
The impact of remote work on the real estate market is likely to have lasting effects beyond the initial shift. As remote work becomes more ingrained in work culture, it may continue to influence housing choices, population distribution, and regional economies.
The Bottom Line
Overallt the transition to remote work has brought significant changes to the real estate market by influencing housing preferences, property values, and housing policy.
As remote work continues to evolve, the real estate market will need to adapt to meet the changing needs and demands of remote workers.
Are you looking for a real estate agent in Massapequa? The Kim Holland Homes team is the #1 real estate team on Long Island. Contact us or call Kim today at 516-236-6303 to start the process of finding your dream home.