Tech companies such as Facebook, Twitter, Square, Dropbox and Stripe have announced that they are giving employees the option to work from home on a permanent basis since the COVID pandemic began in 2020. Workers who take advantage of this option and then choose to relocate out of their expensive cities may be required take a commensurate pay cut.1
Major Cities See Exodus to Suburbs
According to a recent survey by Upwork, the largest cities in the country may see a corresponding exodus as people choose to work remotely in less crowded and less expensive parts of the country.2 In August 2020, New York City reached a record-high number of residential vacancies. San Francisco rental prices have dropped by 11%.3
Commercial real estate has been affected as well. For example, since the pandemic struck, New York has seen more than 1,200 restaurants close permanently. Due to reduced business travel, some hotel chains are poised for bankruptcy. And companies offering remote-work options may downsize to smaller commercial spaces.4
Real Estate Vacancies Expected to be Short Lived
However, these scenarios paint only part of the real estate picture. With so many city dwellers on the move, lower real estate prices could make it more affordable for other people to move into metropolitan areas. Zillow does not expect those vacancies to be left empty. It predicts 2021 will bring the biggest annual sales growth since the early 1980s, with the COVID vaccine rollout and expected economic recovery helping drive home sales.5
Another trend that could be the wave of the future is community living.6 This option addresses the needs of aging baby boomers, cohabitating millennials and people who just want to stay connected to a close-knit community. For example, seniors may wish to live in a cooperative housing community, but not necessarily one with a common dining hall and laundry room. We learned just how fast and lethal the coronavirus spread through nursing homes, so separate residences that still offer shared services may be more desirable in the future.
If you’re considering putting your house up for sale, Lundervold Financial can advise you on the many options available to use surplus assets to create a confident retirement income stream for the future. Just give Lundervold Financial a call; we’ll be happy to help.
Content prepared by Kara Stefan Communications, 2021-506
- Jane Lanhee Lee. Reuters. Oct. 29, 2020. “Up to 23 million people in U.S. could move thanks to remote work, survey finds.” Accessed Jan. 11, 2021.
- Steve LeVine. Marker. Sept. 1, 2020. “Remote Work Is Killing the Hidden Trillion-Dollar Office Economy.” Accessed Jan. 11, 2021.
- Zillow. Dec. 18, 2020. “Bold 2021 Predictions: A Stronger Housing Market Across the Board.” Accessed Jan. 11, 2021.
- Kirsten Stevens-Wood. World Economic Forum. July 20, 2020. “Co-operative housing: A greener and more sustainable way of living?” Accessed Jan. 11, 2021.
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference. 1/21 1496467B
Ready to Take The Next Step?
For more information about any of the products and services listed here, schedule a meeting today or register to attend a seminar.