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Remote Work Drives The Bulk Of Home Price Appreciation

by blogger1
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on Tuesday, 27 September 2022
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New data suggests that the shift to the new remote work economy has been responsible for the bulk of house price appreciation.


How much can investors expect this to continue to add to home values? What else may compound this shift in equity and wealth?


60% Of House Price Growth Linked To Going Remote

Moving to remote work has created hundreds of billions in wealth over the past few years.


According to data from San Francisco’s Federal Reserve Bank, 60% of house price appreciation is directly tied to the move to remote working.


Even though we have already seen the majority of workers go remote, some still haven’t made the switch yet. Others are remote, but haven’t yet relocated. Leaving more room for this transformation to drive wealth creation.


The 1% Rule

Coverage of the data by Bloomberg shows a direct correlation between more workers going remote, and house prices. Saying that for every 1% that switch to remote work, house prices go up by 0.9%.


With 20% to 40% of the workforce still left to make the shift, there could be a lot more fuel for house prices left in the tank.


Where The Money Is Going

Of course, these house price increases do vary greatly depending on where remote workers are moving.


Where they are relocating to is seeing substantial house price growth. While the areas that they are snubbing and leaving behind are suffering equal losses.


This is clearly likely to be compounded by the need for affordable housing, and a desire for a better quality of life, less crime, and more enjoyable places to live.


It is true that a huge effort is being made to promote a return to the office. Mostly by those that don’t know how to operate and stay competitive in the new economy, or who have made misguided investments in office buildings which are no longer indeed. It is unlikely that is going to stick, even if they invest millions in hyping it up.


Investing

The big question for investors is whether they will be investing for the growth in the areas remote workers are flocking to. Or investing in the distressed areas where prices are going down, and negative equity is growing.

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