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Remote Work May Be Behind Spike In Home Prices And Relocation In 2022
Remote work is driving up home prices and sending buyers to Miami and Phoenix.
Published 06/01/2022
High demand for new houses and not enough housing to go around has created intense competition in the real estate market. But thanks to a study conducted by the National Bureau of Economic Research (NBER), we now know that remote work may also be responsible for skyrocketing home prices. The study analyzed remote work data from December 2019 to November 2021, and found that by the end of the period 42.8% of American employees were still working from home part or full time, with a significant about of remote positions becoming permanent.
According to the NBER, housing prices have risen by 23.8% during this time period. This is the fastest increase rate on record. The organization believes that it was driven by remote work-fueled migration, which contributed to increasing housing demand in new places. Subsequently, this also led to increases in home prices and rents.
So, now that homeowners aren’t limited by the need to stay close to a 9 to 5 job, where are they going? According to data from Redfin, the first choice for relocation seems to be Miami. When compared to 2021, home prices have increased by 28%. At the same time last year, it was taking Miami homes an average of 64 days to sell, and now homes are selling in an average of 45 days.
That said, we can’t say we are all that surprised by these numbers. We certainly see the appeal of Miami with its great nightlife, warm weather, sunny beaches, and great shopping to enjoy. There is a lot to do in this city, and remote workers typically have more flexibility to take advantage of it.
After Miami, Phoenix seems to be the next most popular hot spot for remote workers who have decided to relocate. Since 2021, housing prices in Phoenix have climbed by 27.4%. Similar to Miami, the Phoenix housing market is also seeing a decrease in the time it takes to sell new homes. The average is down to 20 days in 2022 from 23 days at the same time last year. The city’s newest residents are likely taking advantage of the outstanding hotel resorts, world championship golf courses, Southwest-infused fine dining, and luxurious spas.
As remote work continues to change the way employees work, it will be interesting to see what the housing market does next!
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