Pandemic’s Impact on Housing Market in Silicon Valley

Covid-19 has accelerated people to shift to work-from-home. And this work-from-home trend might become long-lasting after pandemic. Work-from-home is more easier to adopted in Silicon Valley than the rest of the country as shown in the above figure. 

Therefore, Silicon Valley homebuyers prefer turn-key houses, old or new, with spacious living and working space, separate rooms with privacy. In addition, because of ever increasing costs of construction labor and material, homebuyers try to avoid possible hassles of repair, remodeling, or rebuilding, and some homebuyers are willing to compromise on location and lot size which are first two core factors for traditional real estate purchase. 

Observations

• Increasing number of people are working at home for increasing number of hours.
• Those who switched to telework are IT related occupations with higher income.
• Families shift spending toward housing with less for travel, vacations, entertaining, and commuting.
• Wealthier households accelerating purchasing second-home for retirement and house for children.
• The pandemic has pushed more millennials into homeownership.

According to several predictions, this work-from-home trend might become long-lasting after pandemic. For one reason, it provides disaster preparedness.  Secondly, it is cost-effective for both employers and employees: saving employers on office rent and business travel and employees’ commuting costs. Last, with the advancement of technology, work is where you live.

References

• Those Who Switched to Telework Have Higher Income, Education and Better Health

• Work-at-Home After Covid-19 – Our Forecast

• It’s time to reimagine where and how work will get done

• Remote Working, Commuting Time, Life Events All Affect Home Buyers’ Decisions

• THE EXTRAORDINARY AND UNEXPECTED PANDEMIC INCREASE IN HOUSE PRICES: CAUSES AND IMPLICATIONS