Housing Inventory in Metropolitan Areas May Improve
While no one is celebrating Covid-19’s near takedown of the U.S. economy, we may see at least one positive impact of the pandemic on American work culture—that is, with more people permanently working from home, employees will likely move further away from the office, easing the housing inventory shortages in major cities.
According to a recent opens in a new windowWall Street Journal report, with employees being given the option to work virtually, we should expect to see people moving away from pricey neighborhoods near their corporate offices to less expensive areas further away from the city, which should ease the housing inventory challenges big-city home buyers have been experiencing.
Several major tech firms like Facebook, Twitter, and Square have said many of their employees who were previously office-bound will be allowed to work from home on a full-time basis. Those companies expect as much as half of their workforce to be working remotely within the next five to ten years.
Twitter announced it will allow employees to work from home permanently as it restructures its operations. In a note to staff, Chief Executive Jack Dorsey said most employees will be allowed to keep working from home even after the pandemic has largely passed.
Facebook’s CEO Mark Zuckerberg says 75% of his employees have already expressed an interest in moving elsewhere if they’re allowed the option to work remotely full time.
Nationwide insurance is another major employer that is following suit. The Columbus, Ohio-based company says it has transitioned many of its employees to permanent work from home status, with others being allowed to work on a “hybrid model” alternating between home work stations and smaller offices near them.
Single-Family Housing More Affordable in Rural Areas
These changes in work culture are expected to boost home-buying activity in areas of the country where homes are less expensive—especially among younger generations who have put off home buying due to cost.
According to U.S. Census data, less than 37% of under 35-year-olds owned a home last year because they could not afford the high price tags in areas such as Seattle and San Francisco where many tech firms are based. At Facebook, for example, the average age of its employees is 29 years and their median pay is $240,000, while the median home price in the Bay Area is $996,000.
Along with the shift to working from home, the COVID-19 pandemic has prompted many renters to think about social distancing themselves away from apartment living to homeownership. These trends will likely ease the single-family housing inventory shortage in larger cities and boost home sales in outlying suburban and rural markets.