Possible Impact of Return-to-Work Policies on Real Estate Markets

​During the pandemic, many workers transitioned to remote work, leading to a shift in housing demand toward rural and suburban areas. Locations such as Florida, North Carolina, and Texas saw increased demand, with some mid-sized cities even being dubbed "Zoom towns" due to the influx of remote workers. As a result, home values in these areas grew.

With companies now implementing return-to-work policies, real estate markets may face significant changes. Even hybrid work models requiring employees to come in once a week could lead to increased demand for housing closer to office locations. For some workers, this may mean relocating back to urban areas, potentially incurring costly moves. One recent survey reported that 10 percent of home sellers were forced to sell due to return-to-work mandates. Workers would rather move back to the city than lose their jobs and livelihood, even if it means selling their home at a loss or accepting higher mortgage rates.

In response, homebuyer preferences might shift, with workers opting for homes within walking or biking distance from work to reduce commuting times. Those moving back to the city may also need to downsize and the demand for office space may drop, leading to a greater demand for open floor plans.

Urban property values could rise as return-to-work policies boost housing demand in areas with large employers. On the other hand, rural and suburban areas may see a corresponding drop in home values due to recent move-ins returning to the city for in-person work.

John Hofmann, Wilmette

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