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Impact of Remote Work on the Real Estate Industry
Posted by Insightlink on 02/23/22
For quite some time now, remote working was cited as one of the most far-reaching trends moving the mountains across the business landscape. This unrelenting development was, however, considerably sped up by the outbreak of COVID-19 that literally brought the world to a standstill and made remote work the only viable option for keeping the economy alive.
This development swept over all existing industries. Now when the world is slowly moving towards the end of the pandemic and our lives slowly fall back in line the business world we will find will not be the same as the one we left.
Let us take a look then at some of the ways this remote work surge affected the real estate sector that traditionally operates with two feet firmly on the ground and see what your company can take away from them.
The rural properties experiencing a surge
People usually tend to gravitate toward real estate locations close to their native companies. However, according to recent research, 16% of all companies around the world are now fully remote, and as many as 62% of workers aged 22 to 65 claim to be allowed to work remotely at least occasionally. With such a gigantic part of the global workforce no longer required to be present at the workplace all the time, the prices of the downtown properties are no longer in such a demand. On the other hand, the rural houses that usually got the short end of the bargain are experiencing a welcome surge revitalizing the rural sector.
The fluctuation of the suburban demographics
Even though they always represented a very competitive and fast-paced market, demographics-wise the suburbs were decidedly middle-class family-oriented sector. Now when the remote working is releasing a growing number of urbanites from their ties to the high-value downtown areas, this economic class is leaving their houses and condos and bringing their money to the suburbs. That puts old suburb residents in a competitive environment they may no longer be able to remain in. For instance, in December 2021, Truckee home prices went up 18.9% compared to the previous year. This trend is expected to continue.
Real estate becoming a federal game
In previous decades, different parts of the United States real estate market featured very well-defined local demographics. The sure of remote working effectively threw this narrow approach out the window and made the United States one unified market. This development got an additional boost in the form of ever-growing rent prices that are motivating the workforce to look at four housing beyond native states. If we take a look at Abilene apartments for rent we will see this niche Texas market packs prices well below the national average so it shouldn't be a surprise to see more workers moving to such locations.
Businesses rethinking their property holding strategies
With an increasing number of workers moving to remote, telecommuting positions, the companies that were previously holding on to properties and using the workplace to boost employee productivity will need to adapt their strategies and extend their efforts to the remote workforce. But, going back to the real estate market, this period of uncertainty and looking for the new industry standard should completely disrupt the property holding and leasing strategies. As a result, this traditionally slower market should get a new incentive and dynamic and once again come into focus of the booming real estate industry.
A new kind of living and working space
So, we have established by now that a huge quantity of US workers is now using their homes as primary work locations. We would also like to mention that the properties that, in regular circumstances packed very high market demand are no longer able to provide satisfying productivity or work-life balance. So, what kind of properties will be the main focus of this influx of remote workers? Well, obviously one of the primary demands should come in the form of home offices or at least spare rooms. Second, ideal properties should be located in the vicinity of co-working setups or other types of collaborative spaces.
The number of remote workers will keep growing
Last but not least, we would like to remind you that even though COVID-19 sped up the adoption and forced thousands of companies to adopt remote working models, this process was in full swing even before the pandemic broke out. So, we can't really expect this evolution to reverse when we declare its end. On the contrary – recent research indicates that the number of Americans working remotely will rise to 36.2 million by 2025 which is approximately double the pre-pandemic number of 16.8 million. So, all the things we have covered above will become only more pronounced as time goes by.
We hope these few mentions gave you a general idea about the tremendous influence the growing number of remote workers will have on the real estate industry in the following years. Of course, having such far-reaching socio-economic consequences o the outcomes of this huge shift won't stop here. But, the data we have at the moment gives us a perfect starting point for adjusting our future strategies.
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AboutInsightlink Communications are experts in employee survey design, data collection and analysis. Since 2001 we've helped companies of all sizes measure and improve their employee satisfaction and engagement.
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