Research Shows Soaring Home Prices Largely Caused by Remote Worker Migration
Employer Location Untethering
Stay-at-home orders didn’t negatively impact work productivity for many given the connected nature of today’s world. As the pandemic dragged on, many Americans acclimated to not going into the office, and many began to question the need to be geographically close to their employer.
Researchers from the Federal Reserve Bank of San Francisco and the University of California, San Diego have studied how the pandemic influenced where people choose to live, and the impact on the housing market. A noteworthy number of Americans opted to swap their house for something larger in a warmer climate.
Worker Migration Drives Up Prices
The same research revealed people moving during the pandemic accounted for more than half of the approximate 24% increase in home prices during that period.
The places that saw the biggest price hikes were in those cities that attracted remote workers. Cities that boast warm weather such as Austin, Phoenix, and San Diego experienced some of the largest home price increases in the US. And valuations escalated fast – Austin saw the median single-family home price explode by 26% from 2020-2021.
Sun and Space
For those rethinking where they live, the researchers found common themes driving where they chose to relocate.
Space was one issue. With more time at home people wanted more room for an office. This made cities with lower population density attractive. The other factor was the weather. Without the employer’s office serving as an anchor, cities with sunshine were favored. Industry also was a factor as some jobs are more conducive to remote work, such as the tech sector.
Essentially, more Americans evaluated where they lived based on lifestyle rather than employer location. If the trend continues, supply and demand dynamics could produce some uneven results in the housing market.
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