Living near your job is nice, right? No one likes a long commute. That’s why, for decades, homes located within a ten-minute commute of the country’s biggest downtown job centers have always had the highest values. However, recent data by Zillow shows that home valuation is changing.
Shifting Priorities: Home Affordability vs. Working Near the Major Job Centers
As remote work has become more commonplace during the pandemic, Americans have shifted their priorities away from quick office access and toward home affordability. People are no longer willing to pay a premium to live in areas closest to major job centers. While home values are rising throughout the country, the slowest price acceleration in the nation is happening in these formerly desirable areas. In fact, some of those metro areas are actually seeing prices decline.
Prices are certainly lower than before. A home with a 10-minute commute in New York is down $73,673 from 2019. A home in Boston with the same commute has decreased in price by $21,175. So prices in these major metro areas are definitely dropping, but if you’re looking for a strong investment, it’s unclear when the prices will rise again. So maybe it’s time to buy that condo in Manhattan.
When looking at the data, it makes sense that home values dropped in major metro areas during 2020. While the COVID-19 pandemic was at its highest point, people have wanted to move away from crowded downtown areas to where they have more space to do as they please. But as the pandemic moves closer and closer toward its end, downtown areas could see demand rise again. It will likely depend on remote-work trends going forward.
Flexible Remote Work Leads to Less Traffic
Many major companies, like Facebook, Amazon, and Twitter, have plans to continue to allow flexibility with remote work. While some employees may return to the office, others will remain home, inevitably making the roads less crowded. This makes it easier for workers who still commute since they’re able to live further from their office without having to deal with traffic every day.
Without the hassle of commuting to worry about, homebuyers are prioritizing homes with more space in less crowded areas. Agents who want to be ahead of the curve in providing the best possible service to clients need to understand how homebuyers are moving away from urban centers and toward more suburban areas.
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