In-office requirements are an emerging factor in the real estate market, with fewer and fewer companies willing to accommodate remote work, according to a new report by Redfin.
Out of 5,079 respondents surveyed during May and June, 616 indicated that they’re likely to sell their home and move within the next year, with roughly 10 percent of those respondents listing a return-to-work policy as their reason for moving, according to the study.
With mortgage rates above 7 percent, sellers need a reason to sell their home and lose their current mortgage rate, which is likely much lower than one that can be obtained in today’s market. For one in five, or 19.3 percent, of the respondents to Redfin’s survey, that reason is to move to a place where people are more aligned with their stances on social issues. Another 19 percent wanted to move somewhere with lower taxes, while 17.9 percent cited crime rates as their motivation to move.
A notable 10.6 percent of respondents said they planned to move because they’ve faced discrimination in their neighborhood, while 8.4 percent cited concerns about climate change’s impact on their neighborhood.
While returning to in-person work wasn’t the biggest motivator for relocation, the study highlights it because it is an emerging factor in the real estate market, with fewer and fewer companies willing to accommodate remote work. Similar to the way the beginning of remote work brought about a flood of relocators out of major coastal cities and into smaller, less-expensive ones, the era of return-to-office mandates could bring about a reversing of that trend.
In Boise, Idaho, Redfin agent Shauna Pendleton is working with clients who are selling their home after less than a year because their Seattle-based employer is requiring them to return to work in-person. They are selling their home at a loss because they bought it when prices peaked as West Coast relocators flooded the Idaho city.
“My sellers both work at the same company, which told them they have to be in the office three days a week or they’ll lose their jobs. They have six months to make the move,” Pendleton said. “They’ll probably have to take a $100,000 loss on their home. Their new house in Seattle won’t be anything close to the size of their property in Boise, and their mortgage rate will be much higher.”
Some things never change, no matter how high mortgage rates get: The leading motivator for people to move at 33.8 percent was a desire for more space, followed by the desire to be closer to family at 22.6 percent, and the desire for a lower cost of living at 21.6 percent, according to Redfin.
“Real estate is all about priorities and compromise,” Redfin Chief Economist Daryl Fairweather said. “While a lot of homeowners are staying put, refusing to give up their rock-bottom mortgage rates, some are opting to trade their low rate for a safer neighborhood, lower taxes and/or neighbors with the same political views.”