How Work-From-Home Option Impacts Real Estate & Housing Choices

Saturday, 13 March 2021

Find out how the work-from-home set up has severely impacted the real estate sector, especially in this time of the COVID-19 pandemic.

Lockdowns, quarantine restrictions, social distancing, and other health and safety rules and regulations being implemented to curb the infection caused the rise of work-from-home (WFH) setting and less of the walk-to-work concept.

Work-from-home set up
Photo by Ken Tomita from Pexels

How Work-From-Home Option Impacts Real Estate & Housing Choices


    Due to this trend, a lot of prospective homebuyers had seen the sense of moving into city peripheries. The majority are taking occupancy to rural areas nearby cities since the pandemic hit the world and companies and businesses shifted to doing their work at the comfort of home.

    How the pandemic affected the real estate industry


    This era of uncertainty due to the pandemic and economic turmoil radically transformed the real estate market where buyer and seller’s preferences are changing to accommodate new market realities. Homebuyers decide to relocate to the peripheral areas for bigger homes and a better lifestyle, at the same time, searching for more affordable prices because of the work-from-home option even after the lockdown.

    Previously, the walk-to-work or short drive to work was the “gold standard" of housing. This concept of being employed in and around central corporate workplace hubs because of better opportunities for job growth is popular in the middle class. But this is changing as the WFH setting becomes viable even outside of the metro and central business areas.

    The most prominent new residential real estate trend of the COVID-19 era is the shifting of millennials' new-found preference for buying rather than renting homes. The rise of the WFH culture pushes a majority of millennials to live in more spacious and cost-effective homes in less central areas.

    Buyers’ mostly millennials, change of heart eventually affects the demand and dictates fresh supply even in most peripheries where there is a sufficient supply. 

    Tenants and buyers alike are drawn to choose bigger homes, affordable prices, and more generous open spaces in the peripheral areas to accommodate the new normal in a work-from-home setup.

    Affordability and Quality Living


    In the middle of an ailing economy, job loss, pay cuts, and business shutdowns, the affordability of the WFH environment is an enduring concern. The strong work-from-home trend is also changing real estate consumer preferences. 

    From a rental and purchase perspective, the peripheral areas are more affordable and the cost of living is also a bit lower than in the center or within the city. Because it is still near an urban area, people can still have the lifestyle they used to enjoy in the city, for less. 

    Food, transportation, fuel, and other basic needs are cheaper in rural communities. There are a bounty of local products to enjoy and a much more fresh and lush green environment to roam.

    In the city peripherals, life is a bit stress-free and there is always ample space to unwind without having to worry about social distancing. Let’s admit, the work-from-home setting is not as easy as it seems. 

    It can be as stressful as office-based jobs, but being near the rural environment makes WFH set-up a little more peaceful as you can always go outside to take a walk and have a breath of fresh air, literally and figuratively.

    Renting vs. Buying


    To rent or buy involves many highly subjective factors and considerations. But because real estate buyers are increasingly interested in homeownership post-COVID-19, it is worth calculating what works better with the WFH set-up.

    In some tenants living within city limits, their 5-year rental is equivalent to 27-52 percent of the total property cost in the peripheries of the top cities, therefore, homeownership in the peripheries might be a better option for them.

    Also, with the current home loan interest rates at an all-time low, this might be the right time to consider living outside of the metropolis and invest in a house and lot. In the United States, for example, banks and lenders are offering mortgage rates for as low as 2.3 depending on the buyer’s credit score and loan term.

    Epilogue


    If you have enough resources, it is time you evaluate your capacity to avail mortgage loan. If you plan to pursue WFH opportunities for a longer period, you might be better off investing in your own space today. It might be a provident move to make your long-term financial and retirement goals a reality.

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    How the pandemic and the work-from-home set up affected real estate choices
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