64% say they prefer to work remote: How is this changing real estate?

The coronavirus pandemic brought about a dramatic change in the way Americans work. Scores of employees once required to show up at their workplace each day were suddenly permitted to work remotely. In fact, both the number and the percentage of home-based workers more than tripled between 2019 and 2021, according to Census data.

Many employers have now called workers back to the office, but plenty of people have been able to maintain their remote work lifestyle. The phenomenon has impacted where people choose to live and what they consider to be prime real estate. It may also have driven up the cost of buying a home.

Key statistics

Have remote jobs driven up home prices?

The COVID-19 pandemic reshaped the meaning of “home” for many American households. Once tethered to offices or other places of business, workers were suddenly working entirely from their homes amid pandemic social distancing requirements. This, in turn, caused many to start rethinking where they live.

Freed from having to stay within easy commuting distance to their place of employment, people began moving to places that suited them for other reasons. Some chose to relocate closer to family and friends, others opted for places that offered a more attractive climate or lifestyle. Still others moved to more rural, less densely populated areas in pursuit of more affordable housing.

All the reshuffling increased demand and contributed to a surge in home prices, leaving hopeful homebuyers faced with sticker shock. Bankrate’s April survey found that many prospective buyers were willing to make sacrifices to find affordable housing, including 37 percent who were willing to move to a different state to achieve their dream of homeownership.

Remote work had a similar impact on the cost of rent as it did on home prices, according to the FRBSF study. “Evidence suggests that remote work caused a relative increase in the demand for all types of housing,” it found.

The rise of remote work

While COVID-19 no longer controls daily life the way it once did, the demand to work remotely has not subsided. A recent report from Zippia, a career site, found that 27 percent of U.S. employees continue to work remotely as of 2023. Both employers and employees foresee remote work becoming a permanent part of the way work is conducted: By 2025, more than 36 million American employees are expected to be working remotely.

Americans enjoy working remotely so much that they’re willing to sacrifice in exchange for the opportunity to do so. According to a Bankrate survey, that includes willingness to take pay cuts, cut back on vacation time and more. In addition, 42 percent of Americans said they would change jobs completely if it meant having the chance to work remotely full-time, while 35 percent said they’d even be amenable to working evenings or weekends.

Where home prices are high due to remote work

The remote work phenomenon has also meant that certain areas of the country have experienced significant growth. Much of Florida and cities like Boise, Austin and Phoenix have seen not only increased population numbers, but also skyrocketing income levels for the typical homebuyer, according to one Redfin study. Remote workers moving into town from typically pricey job centers like New York, Los Angeles and the Bay Area are bringing their high salaries with them: In many of these locations, income growth is more than double the nationwide average of 6.8 percent.

As a result, housing availability in many of these same migration hotspots — sometimes dubbed “Zoomtowns” thanks to the influx of remote workers who conduct business over Zoom — has become even more challenging. High-income newcomers are willing to spend more, since they’ll be both working and living in the home they buy, which drives up the cost of housing in their favorite places to live. And locals who earn less are being priced out of their own communities. In Miami, for instance, the average out-of-towner moving to the city in 2021 had 25 percent more to spend on a home than the average local resident, Redfin found.

FAQs

• What should I consider when moving with a remote job?

  For starters, determine whether your employer is likely to want you onsite at some point in the future. If you move far away and your presence is suddenly required in person, that could pose a challenge. If you’re moving to a different state or country, it’s a good idea to both OK that with your employer first and confirm that you’ll have the legal right to work in the new location. Technical issues should also be top of mind, like the internet connectivity and reliability in your intended location. It’s also important to consider how expensive life in the new location will be. Bankrate’s cost of living calculator can help you determine how far your salary will go in various locations.
  

• What are the best cities to start a career?

  Austin, Texas ranked number one in a recent Bankrate analysis of the best cities to start a career. Factors like housing costs, the employment picture and quality of life were taken into consideration. Rounding out the top five were Seattle, Salt Lake City, Raleigh and Nashville, followed by Indianapolis, Dallas–Fort Worth, Kansas City, Atlanta and San Jose.
  

• What are the disadvantages of moving with a remote job?

  As a remote worker, it may be more challenging to get to know people if you’re moving to a new city or community and you’re not connected with a local workplace. Living and working in the same space can be isolating, so you’ll probably want to cultivate some hobbies or interests that get you out of the house. In addition, moving may mean you have to travel more in order to connect with coworkers in person.