The transition to remote work raises housing prices
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The mass transition of citizens to a remote mode of work contributes to rising prices for housing and its rent. This conclusion was reached by economists from the Federal Reserve Bank of San Francisco and the University of California at San Diego.
According to them research, U.S. house prices rose 24% between November 2019 and November 2021. And if before the discovery of the SARS-CoV-2 coronavirus in China, a little more than 5% of US citizens worked remotely, then in the spring of 2020, when the COVID-19 pandemic was announced, about 60% of American employees switched to remote work. As noted in the report, 30% of employees of companies and organizations still perform their work duties from home, and some employers intend to maintain this mode of work even after the end of the pandemic.
It was in the spring of 2020 that home prices in the United States began to skyrocket, the study notes. And according to the calculations of the authors of the report, the increase in real estate prices by 60% was dictated by the mass transition of citizens to a remote mode of work. As the study notes, even though experts adjusted the data to account for people moving from expensive cities to relatively cheaper suburbs, it found that a 1% increase in working from home corresponded to about a 0.9% increase in house prices. The same ratio was maintained in the case of rent growth.
The authors of the study note that this phenomenon has fundamentally changed the dynamics of prices in the real estate market and will continue to have a significant impact on prices in the future.
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