The last couple of years has been a time of major reevaluation. What mattered in 2019 might not matter now in 2022. Virtually everything and everyone has gone through a transformative process, meaning nowadays we can’t take anything for granted. Real estate has changed drastically now that more and more people work from home or work on a hybrid schedule.
Not only do more people work from home, more people are leaving the largest urban centers for the suburbs, or to smaller cities like Twin Falls, ID to get more space to themselves. To better meet the expectations and needs of homebuyers, it is vital that the industry takes note of the effects of remote work and how it’s reordering the priorities, desires, and lifestyles of homebuyers nationwide.
The Big Changes
Let’s take a look at the real-world trends we’re seeing across North America, then dig into the why’s of these big changes. Even as the pandemic wanes, more than twenty percent of all workers in the U.S. work from home, and a greater share are on a hybrid schedule. Many have taken to the work-from-home lifestyle, while others miss the days of office culture and the bonds you can build with your coworkers face-to-face. Regardless if you like it or not, remote work is here to stay.
Suddenly, great swaths of the U.S. workforce no longer had a reason to manage ever-rising rents in the big cities where their offices were located. Though plenty of people love living in cities, they weather the costs because it’s either that or they don’t have a job. With remote jobs, lots of people are choosing to save their money and move out to more affordable areas, i.e. the suburbs and rural markets.
All across America, remote workers have flocked from their downtown condos to seek homes in the surrounding countryside and satellite cities, like Alpharetta, GA. As more workers avoid the high burdens and costs of city living, they’re able to free up more capital and buy detached homes much earlier in life than if they spent ten years in condos or apartments trying to save up.
The New Homebuying Generation
Already we’re seeing an increase in younger people taking up a larger share of the homebuying populace. According to the NAR, in 2021 people aged 22-30 made up 14% of the homebuying population, compared to just 11% in 2019. It’s hard to draw too many conclusions based on generational data because the age ranges of a generation change depending on who you ask and when you ask them.
For myriad reasons, plenty of young people don’t buy homes till later in life, which wasn’t the norm twenty years ago. That doesn’t mean they’re never going to buy a house. So long as it makes more sense to buy a home than rent one, people will keep buying homes. For many people, the pandemic was a big shake-up, at first scaring people away from making any long-term commitments, then driving them to make fundamental changes to their lifestyles and goals.
Check out that NAR report we linked to earlier. They throw a thousand graphs that show how Gen Y and Z are moving into the market in greater numbers, just a little later than expected.
New Attractions of Owning A Home
So what are these new home buyers looking for, and how has remote work changed how people look for their houses?
For one thing, new homebuyers who work remotely value space, especially green natural space. A backyard, a balcony, a sunroom, these are all desirable sanctuaries to take comfort in. Those of us who were caught in apartments in condos during lockdown can easily remember how the walls came closing in. We all learned a lesson on the value of open spaces.
Location has always been the guiding factor in real estate value. For the last fifty years, proximity to work has usually been a homebuyer’s top priority. Now that remote workers literally cannot get closer to their jobs, location still matters, but in a different way. Let’s go back to that NAR report. We’ll be drawing from slide 36.
You’ll see that across the board, the majority of homebuyers are moving to the suburbs like Richmond Heights, MO. This tells us that A) there’s more space out that way and B) people don’t want to be too far from the cities. There’s still plenty of love for cities. There you’ll find the best food, the best concerts, the best amenities, and, well, the most things to do.
Just because people might be leaving urban areas doesn’t mean they want to abandon their cities altogether. They just need breathing space. They need access to more than a few acres of parkland at a time. They seek the middle ground.
If you check out this NAR report from 2019 and go to slide 33, you’ll see in the younger age brackets, more people are moving to the suburbs and small towns than three years ago. Now, the shift isn’t drastic. It’s all too easy to exaggerate the changes we see in the real estate market, because so much money is on the line. But just because we’re seeing single-digit changes doesn’t mean we shouldn’t pay attention.
The Literal Home Searching Process
One real benefit that remote work has lent to the home search process is that it has freed up more time in the average worker’s day to look for houses, look for realtors, and spend time thinking about what they want in a home. Now that many workers aren’t trapped in half-hour commutes or have more flexibility in when they work, they can spend more time making sure they’ve found the right realtor for them, as well as researching the areas they’re interested in moving to.
No one can say anything definitive about the future other than that it’s certain to be quite a bit different from today. As workstyles and lifestyles change and influence each other over the next twenty years, the real estate market of tomorrow will require us to ask deeper questions about how real estate agents can meet the demands of buyers. Knowing the right questions to ask before hiring a real estate agent can also help make the searching process easier and faster. It can all be done, with a little thought and consideration.
