The work-from-home trend is going to change the landscape. Literally.
Homebuilders today are developing on land that would ordinarily be a “long commute,” and the new explosion of “remote working” is driving the bus, or the minivan. One in five people who moved within the past year cited “remote working” as the reason they moved.
Working from home, at least certain days of the week, means that a home buyer can justify living farther from work. Land prices, and therefore home prices, are lower as you go farther from an urban center, which offers young buyers one solution to the affordability problem. Homebuilding companies and developers are increasingly starting work on new communities that are farther from the core of a city, in the more distant suburbs and exurbs. They are paying less for land than they would pay closer in, and that will allow them to keep the prices of the homes relatively manageable.
This work-from-home trend is well-documented, but a new survey from Homes.com has added some interesting detail and important takeaways. Homes.com surveyed more than 1,000 consumers and 600 real estate professionals by Homes.com, and found:
- One out of three consumers who moved in the last 12 months did not plan to move before COVID-19 hit. In a related finding, nearly one out of four consumers who moved in the last 12 months or plan to move in the next 12 months report their decision was sparked by a change in their job situation, presumably caused by the pandemic.
- 45% of respondents said they would move if given the chance to work remotely, with 20% indicating that remote working was the reason they moved within the last year.
- The ability to eliminate commuting as a factor in home or rental choices has substantially revised consumers’ location requirements, with 32% of agents and brokers reporting city-to-suburb moves as the #1 change and 23% ranking fewer requests for proximity to public transportation or highways in the #2 spot.
- 40% of consumers who have moved or plan to move are relocating more than 100 miles away, with half of those moving over 500 miles. Industry professionals note that roughly 30% are moving from cities to suburbs, and another 15% are looking for even less populated areas.
Home feature preferences have shifted substantially during the pandemic, with 78% of real estate professionals citing client requests for home offices as the #1 change followed by larger square footage (57%), outdoor recreational spaces such as pools, hot tubs and decks (45%) and upgraded kitchens (44%). These adjustments illustrate the effect of today’s work-from-home and e-learning needs on creating a practical and comfortable living environment.
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Both homeowners and renters are relocating, with 39% moving to single-family existing homes, 23% to apartments, 10% to condo/townhouses and 10% to single-family new construction. The survey did not specifically break out single-family homes for rent, but the boom in the built-for-rent single-family business is also being fueled by the need for enough square footage for a dedicated home office.
As I have noted previously, builders are offering home office packages in their homes now, making it possible to have a personalized, efficient, and fun environment for working from home. Lennar Homes has seen increased demand for its NextGen houses, which are designed for multigenerational living, but that people have also been buying in order to turn the extra space into a dedicated home office. Ever since the pandemic hit, homeowners have been converting garages and spare bedrooms into offices or forcing rooms to do double-duty, and now many builders are offering a “brand new” alternative. This will only accelerate, and I’m advising my builder clients to make sure they catch this wave.