The ongoing explosion in the popularity of working from home is directly responsible for 15.1 percent of the increase in average home prices.
The analysis found that home work – which has become normal for tens of millions during the pandemic – was responsible for the majority of the 23.8 percent increase in house prices between December 2019 and November 2021.
The shift to remote work during the pandemic is partly responsible for the increase in house prices in the United States as people sought bigger and nicer properties to work from.
Statistics provided by the National Bureau of Economic Research (NBER) found that by the end of the period, 42.8% of employees in the United States were still working from home part or full time.
The analysis found that many chose to purchase a larger property to make working at home more comfortable, driving up demand and prices.
Others have moved to a completely new city, with some cities seeing real estate prices rise by a quarter.
“Home price growth during the pandemic reflects a change in fundamentals rather than a speculative bubble,” the researchers wrote.
But the rise in remote work is making the already expensive housing market even more expensive.
Housing prices in the “Sun Belt” attracted remote workers looking for a warmer climate.
Prices in Austin, Texas, are up 26% from a year earlier, according to the National Association of Realtors. Prices also rose in Phoenix, by 26%, and in Boise, Idaho, by 24.3%.
Home prices in Austin, Texas (pictured) are up 26% over the previous year
Prices in Phoenix, Arizona (pictured) are up 26%
Johannes Weiland, associate professor of economics at the University of California, San Diego, and co-author of the study, noted that cities like Austin, Boise, Phoenix, and San Diego experienced some of the largest home price increases in the country.
“As more people work remotely, that’s where housing prices go up,” Weiland said.
These cities share three key features, Welland said, including a dominant industry — such as tech jobs — that allows for remote work, and a lower population density, where there is more space and more affordable housing.
“It’s hard working at home in New York City, for example,” he said, explaining that having extra desk space comes at a premium. “Low-density areas are more attractive to working remotely.”
Prices in Boise, Idaho (pictured), increased 24.3%
A third feature that cities share is a warmer climate and an often attractive lifestyle.
“There is more remote work where the weather is nice,” he said. When you are not tied to a location because of your job, you can choose where you want to be. Many of these places are…attractive to people who can relocate to a lifestyle place rather than a workplace.
Welland added that the development of remote work is likely to have a significant impact on the future course of home prices and inflation.
“We were very shocked that remote working had such an impact, once we saw the estimates,” Weiland said. We have thought about the importance of people moving to different locations. and he. But the people who have stayed in a metro area — the people who need more space in the house if they work at home — are really driving the prices higher. This is the majority of the story.
Study findings support what economists at Zillow have been tracking during the pandemic in what they call “big change,” CNN Business mentioned.
“We’ve seen what we’ve called a ‘significant change’ driving housing demand across the country,” said Chris Glenn, chief managerial economist at Zillow.
Trends that existed before the pandemic have accelerated. Immigration to places like Austin (Texas) and Raleigh (North Carolina) has been happening for a while, but the pandemic has accelerated it due to the lack of connectivity between office and home that allowed people to choose where they wanted to live. “.
