The pandemic forced employees to find new places to work: a desk in their closet, a transformed breakfast bar, a repurposed backyard shed.
- But as remote work becomes the long-term reality for many Americans, it’s prompting them to seek out larger homes with ample room for dedicated workspaces.
What’s happening: Remote work is driving demand for housing, according to a National Bureau of Economic Research working paper that analyzed metros across the U.S.
- Regions with the highest rates of at-home workers experienced the highest home price growth and drops in commercial rent, Axios’ Kate Marino reported.
- Remote work is a driving factor for clients, from young professionals who need to get away from roommates in snug apartments to couples who now need not one, but two, dedicated working spaces, realtor Andy Griesinger tells Axios.
Why it matters: The more the market responds to buyers demanding larger homes, or the more renters gravitate toward units with extra bedrooms, the less inventory there is, weighing on the affordable housing stock.
By the numbers: The NBER paper attributes at-home work to about 15 percentage points of the 24% average increase in house prices between December 2019 and November 2021.
- The researchers also controlled for COVID migration, which is a trend that local real estate agents tell me they’ve seen in Charlotte.
State of play: Charlotte is among the top cities for remote workers, with more than a third of residents working from home.
- The median home sales price is up to $400,000, compared to $344,500 this time last year, according to the RE/MAX National Housing Report.
- There are some signs the market is cooling off, with a third of home asking prices in Charlotte dropping in July, according to Redfin.
“It’s slowed somewhat, in that houses are sitting on the market a little bit longer,” says realtor Ellen Kelly. “But a week now is considered a long time.”
- Kelly says homes with detached office space, preferably over a garage, are in high demand but difficult to find. (Pools are also popular on client wishlists since the pandemic, she adds.)
What they’re saying: “I cannot remember the last time I had a client that told me (a home office) did not matter,” says Jennifer Monroe, an agent with the Indigo Home Team Powered by Compass.
- One couple she worked with bought a one-bedroom condo as a place to work after the husband’s employer’s office closed in favor of going remote. Other house hunters start their search once they realize they don’t have room for a dedicated office in their current home.
Home offices used to be an afterthought, Monroe adds.
- Now her luxury clients are looking for auxiliary spaces, with natural light and custom cabinetry and the right technology, that feel integrated into the home — not just an extra bedroom. She says 100% of homes her team designs have accommodations for at least one home office.
The other side: Managing principal at Ascent Real Estate Capital Jon Dixon offers a different view. He says the smallest units in South End are leased the fastest.
- The company’s newest apartment project, Centro Square, is about two-thirds studios and one bedrooms.
- “I think people are just choosing to live in a smaller apartment, and they’re spending a lot of their time at the brewery, at the yoga studio, maybe at the coffee shop working,” he adds.
Yes, but: Many renters want more space — and to buy homes for the first time, but they can’t necessarily afford a single-family property walkable to features like transit and restaurants.
Gray Shell, president of Tri Pointe Homes Charlotte Division, says his company’s townhomes are going quickly for this reason.
- “Millennials are working from home, but they have apartments in South End. And they’re going absolutely stir crazy,” Shell says. “They’re in 700 square feet, and they’re there with their dog all day.”
- In a compromise of sorts, Tri Pointe Home is incorporating more flex space and office features into its units — but it’s building smaller to keep prices down.