Laura Forman reports in The Wall Street Journal:
The rise of remote working could empower renters in places like New York City and San Francisco to finally buy homes—just not necessarily in those cities. That could be good news for major online real-estate companies such as Zillow ZG +0.47% and Redfin RDFN -0.47% once the market thaws out.
Transactions have plummeted globally as a result of the coronavirus pandemic. Global real-estate tech strategist Mike DelPrete says short-lived transaction declines of as much as 90% have been observed in cities in China, South Korea and Italy at the height of the spread.
In the U.S., Redfin says the volume of newly listed homes declined by as much as 50% from a year earlier the week before Easter. All this has set up some gloomy forecasts for the balance of the year. In April, Fannie Mae projected home sales would fall by nearly 15% in 2020 nationwide, largely driven by rising unemployment.
In 2003, the SARS outbreak drove transaction volumes down by more than 70% in Hong Kong, but Zillow’s data shows they snapped back to normal volumes after the pandemic. This recovery could actually boost volumes above prepandemic levels in suburbs and smaller, less expensive cities.
Facebook has joined companies including Twitter and Square in saying it will begin allowing select employees to work remotely full time, expecting 50% of its workforce to be remote within five to 10 years. Chief Executive Mark Zuckerberg said about 75% of his employees expressed some interest in moving to a different city if they could work remotely.
Myriad large corporations are considering permanent shifts in workers’ location. Columbus, Ohio-based insurance company Nationwide has announced a permanent transition to a hybrid work model for many employees. Even investment banks with big Midtown Manhattan offices such as Barclays have signaled long-term changes to location strategy.
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