Perhaps the biggest challenge with what I term “disaster marketing” is that many people either wait too long to address the issue(s) or remain in denial. The point is that the pandemic will impact almost everything in our lives, including real estate, for years to come.
Properties that had higher value yesterday may not have those same amenities tomorrow. Your strategy should be to prepare to successfully anticipate those changes so that you can gain the best advantage.
The significant increase in the number of people working from home is likely to be the biggest factor toward change in real estate, especially in large and medium sized cities and suburbs.
Over the past 20 years, we had been seeing the trend of residential properties having a higher value when located near a commuter train station or public transportation hub. The added convenience of people being able to travel to and from downtown or wherever they work or attend school with minimal to no driving would often increase sale and rental prices within the surrounding blocks.
It was possible that a seller within a couple blocks from the train station could get a couple thousand dollars more because of that valuable location, than for the same property if it were five miles away.
Although it is too early to know for sure, it appears that the impact of so many people working from home will have long lasting effects on society.
We don’t know how quickly parents will trust their kids to daycare centers nearly as much as they did before. The ability to work from home would typically significantly reduce or eliminate those concerns. Employers will realize that working from home most or all days would likely reduce sick days and emergency leave for that very reason.
Employees might be more productive without having to spend an hour or more every day of commuting time, saving wear and tear in the car or on the bus or train.
What about real estate?
If more and more people wind up working from home on a regular basis, there becomes much less emphasis on location location location. Being near the train station may not matter. A buyer could “save” a few thousand dollars looking a few miles away.
It is too soon to know if school districts will mean as much as they used to or not, since it is possible that online teaching could become more prominent.
People will, understandably, be reluctant to look toward possible drastic long term changes for all of us.
However, when it comes to real estate, this could be a very good time to consider pushing toward a plan for your own benefit.
For example, if you are considering downsizing, and are working from home, you could consider moving further away from your current job because of a drastically reduced commute.
It is just like when you hear people say, “I wish I knew that five years ago. I would have bought stock in such and such”.
Again, what is happening now could very well come with some important “permanent” changes. It is worth considering what “five years from now” could bring, and, more importantly, how your real estate portfolio could look.