Millions of U.S. companies are in the midst of a highly-accelerated experiment in remote working for their employees, and the long-term effect could mean many companies start to reassess how much physical office space they need.
There could be three basic reactions when normal work life returns.
“Probably the majority will say ‘Wow. That was a disaster and we’re glad we’re back in the office,’” Igor Popov chief economist at Apartment List told WTOP.
“But there will be many companies that say, ‘Hey, we worked remotely. We weren’t in our highly-priced office paying high commercial rents and we did fine and productivity was more or less OK.’
“And there will be a third, hybrid category that will not go fully remote but will decide they don’t need all the office space they need,” he said.
For millions of Americans working at home for the first time, some may decide they like it and that could affect where they choose to live.
“It will become easier for people to disconnect from high-priced metros like D.C., Boston and San Francisco. They can move to more affordable places and still work remotely. They can move to be closer to family,” Popov said.
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Apartment List predicts the rise of remote working — perhaps accelerated by the coronavirus experience — may also push pause on urbanization, a 10-year trend of young, highly-paid knowledge workers flocking to expensive, amenity rich city centers in the nation’s most expensive markets.
Luxury apartment inventory, which has led the construction recovery since the Great Recession, may be among the first housing victims of both a pause in urbanization and a recession itself.
Apartment List forecasts a slowdown in high-income renters looking for luxury apartments. It also predicts supply competition will drive prices down at the higher end of the market.