From LA to New York to San Francisco, employees have adapted to the pandemic by working-from-home and using Zoom to connect to colleagues and clients. This shift from a traditional office environment is having an unexpected impact on real estate, both in terms of the process of selling homes virtually and because people want to buy larger spaces to accommodate families locked-in together. In these ‘Zoom Towns,’ real estate is either largely not affected by the economic downturn, or is booming. This trend does not hold true all over the country, however. In areas where residents either can’t use Zoom to continue working, and in big cities that people are leaving, real estate values are under pressure.
The Hamptons, Cape Cod, Aspen are seeing huge influxes of affluent buyers looking for homes outside cities where they can work from home. It is not just the wealthy that are buying up, however. Patricia Moccia is a New York real estate broker in an area called Scarsdale, one-hour outside Manhattan. She told Bloomberg in May that she is only doing virtual showings of houses, but that there is increased interest from people looking to relocate. “I’m getting quite a few calls from buyers who want to leave the city,” Moccia said to Bloomberg. “I have someone looking at one of my properties and making an offer sight unseen.”
In California, the Truckee housing market near Lake Tahoe is booming, according to a recent NPR report. “It has great skiing, mountain biking and hiking opportunities, as well as a river and lakes. It also has some great restaurants and a budding art scene. And if you’re a Bay Area resident in the market for a house, it has another thing going for it: It has a median home price that’s roughly half that of San Francisco, about three hours away,” the NPR piece reads.
News like this is at odds with what economists and industry insiders typically expect to happen in a downturn. “It is normal to see the housing market slow in a recession,” says Ali Wolf, the Chief Economist for Meyers Research. Wolf notes that demand is softening in the national residential real estate market but that the industry is generally in better shape than it was in the last recession. “The mismatch between supply and demand is driving prices higher, but I wouldn’t call this a housing bubble,” Wolf is quoted as saying in an August industry report. “We may see home sales temper toward the latter part of 2020 and into 2021 if the unemployment rate stays elevated, but slower home sales is different than a busted housing bubble.”
Data from the National Association of Realtors notes that while February was a strong month, existing U.S. homes sales fell in March around the start of the pandemic and stay-at-home orders. That trend is exacerbated in the Western region of the U.S. The report also states, however, that the median price of an existing home increased by 8% compared to last March. Lawrence Yun, NAR’s chief economist, expects prices to continue to rise, despite “more temporary interruptions to home sales.” Brokers are turning to technology to temper the difficulty in showing homes in-person. According to Zillow, online tours were up 188% in March compared to February.
In San Francisco, people looking for new homes are being sold on “Zoom Rooms” — home offices with picturesque backdrops. SF Gate recently published an article featuring listings with Zoom Rooms. “A $4.9 million listing tucked behind San Francisco’s Buena Vista Park has a lot to offer, but the “impressive Zoom Room!” gets higher billing than the wine cellar and hot tub in the realtor’s blurb,” the piece read. “Another recent listing in Oakland suggests that a third unfinished bedroom would be “perfect for a private home office, zoom room or au-pair suite.”
Having space for Zoom calls is a trend that is being seen all over the world. “People will definitely be looking for a work-from-home zone and a place where they can use the camera on their laptop or phone for their Zoom meetings,” Montreal realtor Patrice Groleau said recently. “People want to make sure that the camera doesn’t point right into the living room or kitchen where the kids are playing, so you need a place to do your video conferences that is an intimate space but doesn’t show your whole home.”
Whether you are looking for a new place to Zoom your time away, or scouting your house for a Zoom appropriate backdrop, one thing is clear. Working from home is having an incredible impact on not just our day-to-day lives, but also all kinds of industries that we wouldn’t ordinarily expect to be caught up in the Zoom craze.