IS WORKING FROM HOME THE “NEW NORMAL”?
Ever since the beginning of the pandemic, more people have been working from home. From huge companies, like IBM, to your smaller local companies, many employers had a large amount of their employees working from home. One may have thought that the mass exodus from the office would return to normal after the pandemic. However, there are many companies continuing the remote work trend, like IBM, Spotify, Twitter, 3M and many more, according to CNBC. Working remotely isn’t for everyone, but for many it has improved their lives professionally and personally. People are working longer hours, but they report higher levels of happiness and productivity. A study by Standford of 16,000 workers over 9 months found that working from home increase productivity by 13%. A lot of company are going to a hybrid model where time is split between the office and home. What does this have to do with Real Estate? Glad you asked! With the ability to work from anywhere, we are seeing a trend of families leaving large, expensive metroplexes, and moving to locations with a cheaper cost of living or places that make them happy. Why not if you can work from anywhere, right? Maybe the move is to the beach where you can watch the waves while working on your computer and answering phone calls. Maybe move closer to family. You can move out of that tiny New York apartment and purchase a large suburban home in the Sunbelt. The freedom of location provided to employees with a remote work environment is definitely noticed in the Real Estate market, and it looks like this trend is here to stay.
May Housing Report
The month of May brought new highs to both the Tarrant and Denton County housing market. The most notable may be that the median home price in Denton County has hit the $500,000 mark, which is an increase of 26.6% from May 2021. Good news for home buyers is that inventory, while still low, is increasing and is expected to continue to grow as mortgage rates continue to rise. This summer's data will definitely be something we want to watch since the market is shifting.
Rate Hikes
As you probably have already heard, the Fed's just announced its largest rate hike in almost 3 decades. So what does that mean for real estate? While the Fed's are trying ease our inflation woes and keep our economy from dipping into a recession, mortgage rates are increasing. This comes as no surprise. We were all talking about it back in January. We knew this was coming as 30 year mortgage rates were predicted to be in the mid-fives by year end. Well, we are passed that at roughly 6.28% for a 30 year loan. The market is shifting...quickly. Looking to sell? Home sellers are going to see fewer bidding wars for their property as the buyer pool is shrinking from it's all time high. They will also not see well above list price offers like we did 6 months ago. It's going to be imperative that sellers find an experienced agent that goes above and beyond to market their property to get top dollar and not have a for sale sign parked in the front yard for months on end. Looking to buy? “On the same $300,000 mortgage, the monthly payment has risen from $1,265 in December to $1,800 today,” NAR chief economist Lawrence Yun said in a statement. Yes, that news is depressing, however, if you need/want to buy a house there is still good news for you. Because the buyer pool is shrinking, you'll unlikely be in a huge bidding war for your dream home. You might even be able to negotiate in the near future, which really hasn't been the case for the past year+. Buyers may just have to look at homes in a slightly lower price range from 6 months ago to have it meet budget needs with the increasing rates. To sum it all up, we really just have to wait and see! We can make predictions all day long and have an idea of what is to come, but at the end of the day it really depends on how quickly the economy stabilizes. Hopefully, the Fed's will get their "soft landing" that they are wanting and our economy will level out.
