Remote work has become one of the most popular trends worldwide, altering both social and business landscapes since 2020. Having swept over most industries, the impact of remote work appears to be its continuance following the pandemic, wherein those same companies appear reluctant to resume in-person work functions. Due to the rising number of businesses opting for strictly remote or remote-optional roles for employees, the real estate industry now faces an influx of abandoned office buildings on top of its current painful lack of residential listings available. So, what does the impact of remote work mean for the real estate industry? Truthfully, the impact of remote work offers a chance to revitalize the real estate industry from a potential crash. Together, let’s look at the impact of remote work on three areas within the real estate industry along with what buyers can expect when searching for their next property.
The Impact of Remote Work On:
Commercial Real Estate
One impact of remote work on office buildings has shifted how businesses run in-person. Since giving employees the choice to work from home or in-person, organizations have developed effective means to cut real estate costs by reducing office personnel while keeping their usual workforce. By opting to downsize their real estate space with smaller offices, businesses can save on office utilities while allowing easier rotations between remote and in-person shifts. Through this practice, typical office spaces could be reduced by 30-50%, allowing for social distancing, easier movement, and better communications between personnel.
At the same time, these abandoned office buildings provide new housing opportunities to the real estate industry. City centers across the country have begun to refurbish and renovate empty office buildings into livable, affordable housing complexes right in the heart of urban activity, striking particular interest from young homebuyers or workers looking to remain close to the office. Modern, unique, and upgraded according to current housing codes, these office buildings serve as great resources to renew existing properties on the market for buyers looking for local residence without the high competition or construction rates of building new complexes.
In short, the impact of remote work shows renewed hope in city properties as more office buildings are turned into potential apartment or condo units to sell within the real estate market.
Just as commercial real estate has changed, so too has the purchase of residential properties faced the impact of remote work. Now with 62% of workers between 22-65 being allowed to work from home, homebuyers are thus given more freedom to select the location and type of home they want without considering commuting to their place of business. As a result, though, the real estate industry has significantly surged towards rural living, particularly generating housing competition in small towns and suburbs.
One key impact of remote work on residential living has been prioritizing costs. With housing prices up more than 30% in the last couple of years and inventory lacking by over 3.8 million homes, buyers face insurmountable bidding prices in a market lacking sufficient resources to meet demands. Prices in cities remain high as properties are limited, forcing buyers to consider lower-priced homes outside city life. Additionally, buyers looking to rebuild and secure their savings after losses during the pandemic perceive rural areas as more economically stable in terms of tax or insurance rates. People are encouraged now more than ever to buy or rent in areas which are traditionally not as popular.
Before the pandemic, first time homebuyers mostly considered their workplace location as the determining point along with price for buying a new home. Now, though, buyers who work remotely are free to select a home outside of such restrictions, only to have new requirements for closing a home sale.
Whether you’re buying an apartment from a refurbished office building or in the suburbs, homebuyers need to prioritize their workspace quality at home. Therefore, more residential properties within the real estate industry need to account for more rooms or spaces to ensure buyers have a separate, private home office. While remote work has fundamentally changed industries worldwide, work quality hasn’t, making dedicated work spots at home just as essential as having home security or functional bathrooms.
Another impact of remote work appears in real estate buying patterns. Rural suburbia has suddenly gained an influx of buyers from major cities, altering not only the real estate but demographic landscape to bring more income within small areas of America. However, these developments also lead to a sudden inflation in housing prices, as little inventory makes bidding for new homes much steeper than before. As this trend continues, residents looking to buy and move are urged to start now before home options run out; at the same time, listing your home could potentially ensure higher profits in such a competitive real estate market.
Strategize Homebuying with Metropolitan Title
Due to the impact of remote work, the current real estate industry perceives a shift in priorities for property owners regarding commercial, residential, and homebuying practices. As fewer people return to in-person work and lean toward living in suburban areas, opportunities to buy properties in rural areas or restored offices promises hope for new lifestyles for buyers despite the limited market. No matter if you work remotely or in-person, let Metropolitan Title’s experienced team help secure your dream home with our professional title services. To learn more about homebuying or real estate property ownership, contact Metropolitan Title today.