While the pandemic wreaked havoc in the world for almost a year, many good things came out of it. People who WFH realized how skewed their work-life balance was and how easy it is now to maintain when working from home. No more commute to work, relaxed attire, and more time to spend with family with improved productivity. But on the other hand, industries such as real estate took a big hit, and we will discuss its scenario in this article.

1. Impact of Remote Work on Real Estate

When people are trending towards working from home, one of the biggest attractions is working from anywhere. Why live in an expensive area when you can work from a cheaper place outside the city? This had an effect on the real estate market where corporate real estate was concerned. Though, in retrospect, there was a little bit of a rise in rentals for suburban real estate.

2. Increase in Vacancy Rates

In just the NY city alone, there was a considerable loss of potential revenue of up to $12.4 billion because the working class wasn't commuting and spending on retail. There wasn't any requirement to spend on food and other stuff as most were working from home and eating at home too. This eventually causes a decline in the commercial real estate property value.

3. The Decline in 9-5 Office Work Model

When everyone came to the office to do their daily tasks, up to 20% of employees felt that long commutes wasted a lot of time and they had lesser time to spend with families. Companies are also making changes with the increase in preference to work from home.

Workers are quitting companies still trying to hold on to the 9-5 work model. Most companies now don't look for bigger offices but large enough to accommodate 1/4^th of their workforce as most workers come in when needed.

Some companies allow smaller workplaces to accommodate employees who do want to work in the office. These scenarios have caused the real estate rental agency to change its business model to accommodate. Otherwise, they will lose a big chunk of their business.

4. Homes with Larger Living Spaces

While there are decline in other businesses and rental real estate near office locations, there has been an increase in housing with larger living spaces. With remote working culture, separate rooms for working are becoming more popular, plus spaces for families to interact. So those real estate agents who have planned and adjusted for this change have created more lucrative opportunities.

In the cities, there might not be the option of such flexibility, but outside the city, it has created more business opportunities in this regard.

5. Virtual 3D Tours

When people are more accommodated to interact with different businesses online, companies have also stepped up their game. Real estate agencies now provide a more detailed portfolio to attract more customers. They provide as many images as possible for a potential customer to see before making a physical visit.

In some cases, agents have uploaded 3D virtual tours so the customers can experience the reality of their homes before coming to visit. They can then compare with other potential locations making it a lot easier for them to decide. This not only reduces the expenses due to traveling back and for them to the location, but it also saves tons of time for the buyer.

6. High-Speed Internet Access

Internet access is also now part of the value of a house. Before it may have been overlooked, WFH employees will prefer areas with high-speed internet access. It is paramount for them to have access to a stable internet connection that they can use as well as their family does too, and it doesn’t stall.

So the agents who deal in regions with these services are playing in gold and can gain a lot of net gains.

7. Amenities Changed Locations

City centers and business areas are no longer the most lucrative for businesses. Properties and commercial locations in areas where more people want to work from home have seen a rise in business. If these areas are coupled with coworking spaces, it improves a lot. Furthermore, fitness and recreational facilities are also moving to similar areas.

8. Changes in Refinancing

People who took loans on their equity are in big trouble as their equities are losing value due to the abovementioned aspects. Similarly, refinancing has issues, too, because banks allow loans on property, but the value has been declining due to these reasons. These assets aren’t valued as high as they were 2-3 years ago.

This will cause the property owners to bear the higher interest rates due to this, and if they want to fulfill their debt requirements, they may need to sell their other properties or come up with more money.

9. Increase in Demand for Industrial Real Estate

Businesses require warehouses more because many companies work on delivering products that were sold previously at brick-and-mortar places. Remote work and less commute have caused people to buy things online and get them delivered to their homes, whereas before, they would shop around in the district where their offices were located to save commute time.

Now these warehouses for storing goods for delivery are more readily available in the industrial areas, which has seen a rise in equity and rentals.

Final Thoughts

The most common names now being used for the crux of this article are commonly known with many names.

These trends are virtual workspace, telework, quarters outsourcing, etc., which have become so popular for many reasons. The prime ones are the flexibility of the working environment, enhanced conditions of how they worked before, and saving tons from not commuting or spending on retail eateries.

While it has been highly beneficial for workers and people working from home, it hasn’t been the same for some businesses. Due to these very reasons, they have seen a reduction in their business.