Remote work significantly drove home price surge

home office

According to research from the Federal Reserve Bank of San Francisco, the shift to working remotely from home during the pandemic drove up real estate prices and rents by as much as 60 percent. Moreover, as this shift becomes permanent, home prices and inflation will likely continue to rise.

The study says that each 1 percentage point increase in remote work results in about a 0.9 percentage point increase in house prices, with similar results in rental prices.

Currently, 30 percent of the workforce is continuing to work remotely.

Housing prices fall for the 3rd month a row

Green Escrow | Real Estate Market News

According to the National Association of Realtors, the median selling price for housing in the United States declined by 2.8 percent in September, marking the third month in a row to see a decrease.

Sales were actually down 2.3 percent compared with September 2020 as high prices continue to keep many first-time buyers out of the market.

Mortage rates remain low but analysts expect the rate to rise to 4 percent next year. Inventories are expected to gradually increase over that time period as well.

Home buyers being patient

Green Escrow | Real Estate

As the median price nationwide for a single-family house increased 4.3 percent to $279,600 in the second quarter, according to the National Association of Realtors, prices in many of the country’s most expensive markets – including San Jose and San Francisco actually declined.

Analysts report that buyers are more cautious and not rushing to buy as in years past, perhaps hoping for further declines. Lower-end properties remained out of reach of most first-time buyers.

One-third of US households pay more than 30 percent of wages on housing

Green Escrow | buyer regrets

The term is “cost-burdened” and it means those households paying more than 30 percent on housing. That number now stands at 38 million in the United States. The problem is even worse for renters where 21 million pay more than 30 percent and 11 million pay over half of their income in rent.

The problem is that incomes have not kept pace with the growth of the economy, made even worse by the ongoing shortage in housing inventory.

There is a bit of good news, at least on the rental front. While rental prices have grown by 3.7 percent average, some markets are reporting increasing vacancies which should cause a slowdown in price gowth.