Remote Work Plays a Part in the Rise of Housing Prices

The COVID-19 pandemic caused many offices to shut down which led employees to resort to working remotely. 

During the pandemic, close to 70% of full-time workers started working remotely. There are obvious pros to working from the comfort of your own home. According to Pew Research Center and Apollo Technical Engineered Talent Solutions, working from home during the pandemic made it easier to balance work and personal life, saved employees an average of 40 minutes a day from commuting and individuals did not have to worry about catching or spreading the COVID-19 virus in the workplace. 

However, there are some cons to working from home too. 60% of workers felt less connected to co-workers, some felt isolated and alone and others felt like they never stopped working because they never left the workplace. Finding the right work-life balance proved to be a difficult thing to do. 

All of this plays a part in why the housing market has shot sky high. 

Johannes Wieland from the department of economics at the University of California and John Mondragon from the Federal Reserve Bank of San Francisco explained in a working paper that “remote work accounted for 15.1 percent of the 23. 8 percent increase in housing prices between 2019 and 2021.”

Wieland and Mondragon further explained, “House price growth over the pandemic reflected a change in fundamentals rather than a speculative bubble, and that fiscal and monetary stimulus were less important factors.”

With houses now doubling as workplaces for many individuals, space has become very valuable. “The dollar value of a square foot of housing has gone up because we want that extra space now to do our work at home,” Wieland said. 

Remote work is predicted to keep changing the housing market.