A Federal Reserve Bank of San Francisco study conducted recently stated that remote work drove over 60% of the US home price surge. The pandemic transformed how most Americans worked. It ensured that people would spend more time at home for their tasks in their offices. As more and more people expect remote working to become a norm, they are also changing their housing requirements.
According to census data, 7.7% of Portland-area residents work from home today, making the city the fourth largest population of remote workers in major metro areas. In the Portland market, home buyers displayed more interest in purchasing homes in smaller and sparsely occupied counties. They also prefer larger living spaces even after the pandemic due to their requirement for a comfortable workspace at home.
These changing requirements of working and self-employed residents and homebuyers have significantly impacted the housing market trends in Portland, Oregon. Your Portland property manager can help you navigate this competitive market.
Why Portland residents prefer to work remotely
The Portland housing market is currently somewhat competitive and shows signs of cooling off. The number of homes available in the market is rising rapidly in the seller's market as the demand for houses increases. According to Zillow, the value of Portland city homes has increased by 8.5% over the past year. Similarly, the home values in Multnomah County and Hillsboro have also increased by 8.4% and 16.8%, respectively, over the last year.
A majority of employed residents in the city prefer working remotely due to the following reasons:
Convenience and Flexibility
Work-from-home culture or remote working has gained momentum over the last year, and many employers have embraced such policies. Employers prefer flexible working policies now as it is convenient for them and their employees. By enabling remote working, employees and employers can mutually benefit from the help of new technologies and flexible schedules.
It Saves Time and Money
Portland is the fifteenth-worst US city in terms of traffic. Commuting within the city became a challenge, especially for people who commuted to work. They had to encounter unnecessarily long workdays, the additional strain of commuting and hindrances to their productivity. Integrating work-from-home policies changed this state of employees by boosting their productivity, maximizing their day, minimizing interruptions, and encouraging technology interaction.
This changing working landscape saved people valuable resources and led them to occupy their homes more than ever. The changed customer behavior considerably impacted the Portland housing market.
Allows Better Work-life Balance
Earlier, the more people focused on their work, the less time they could spend with their families. Being at work meant being away from home. But, with remote working, this has changed, and the workplace and home have become one. The previous home space that people meant to live in became insufficient due to the home office requirement.
Now, people prefer to buy homes in smaller and less populated counties with lower living costs and larger living spaces during and even after the pandemic. Tualatin and Gladstone were hotspots for property buyers, along with Wood Village and Lake Oswego.
As a homebuyer or seller, you can consult your manager who provides property management services in Portland. They can help you understand the impact of remote working on the current housing market and how it affects you.
Impact Of Remote Working On The Portland Housing Market
The popularity of work-from-home policies directly increased the demand for housing because people used their homes to do office tasks. There are around 35% remote workers in Portland, Oregon, according to the census data revealed in September 2022. The share of people working from home has quadrupled from 2019-2021, impacting the housing market.
The economic consulting firm ECONorthwest conducts a workforce study every two years for the Oregon Workforce, Talent Development Board, and the Higher Education Coordinating Commission. John Tapogna, a lead researcher for the study, said that remote work is a pretty big disruption to the housing market. He also said that Oregon is at a long-term disadvantage if it cannot get its housing costs under control as the underproduction of houses and high prices could prevent the benefits of remote work transition. Oregon could benefit if it kickstarts the production of houses and relieves the pressure on housing prices.
Shortage of Houses in the US
The ongoing housing crisis in Portland is also why its interest rates are increasing rapidly. Housing is scarce in the city due to the rise in demand by millennials, the area's key demographic. According to Josh Lehner, an Oregon state economist, house prices are up as millennials choose to settle down. This demographic is between the ages of 23 to 40 and is the overall driver of the economy.
The US has been facing a significant housing shortage for the last few years. With residential real estate prices rising rapidly, middle- and low-income families are finding it difficult to buy houses.
According to sources, the US was short by 3.8 million housing units by the end of 2020. The current surge in investors wanting to purchase more and more single-family homes and their limited supply has also contributed to housing unaffordability.
Increase In Remote Working And Housing Demand
The impact of remote working has also expanded to the commercial market in Oregon, with employers across the state having difficulty finding qualified applicants. Places that offer in-office jobs are seeing fewer takers, as about half of Portland's workforce said they were not interested in returning to offices full-time. In the same survey, three-fifths of people working from home part-time said they would quit their job if the city implemented hybrid policies that required them to work from the office more than twice per week. High housing costs are another factor influencing this, as people want to experience living in the houses they have paid for.
This reluctance directly reflects people's comfort and preference for the work-from-home lifestyle. Employees enjoyed the freedom and flexibility it provided and preferred that to spending hours each week commuting. With housing prices and commercial real estate rates increasing, the vacancy rates in the central business district were around 22% percent during the spring, compared with 13% just before the pandemic. The remote working culture has affected the overall real estate market of Oregon.
According to Damon Runberg, the Oregon Employment Department's regional economist for much of central Oregon, remote work could benefit smaller metropolitan areas that have sufficient housing for remote workers and don't have as many large companies with big office footprints. He also said that if housing is scarce and there is not enough new construction, an influx of remote workers could drive up housing prices, already a challenge for Bend and other state metros.
The above statement holds for the current housing market in Portland.
Will things change in Portland?
Since the development of real estate markets depends on where people live and work, remote working can surely alter the prices and other factors of the market. People used to prefer to live in cities to get homes closer to their workplaces. These places in Portland were expensive and put a strain on their resources. But, with the rising remote working culture, people can easily opt for suburban homes that cost comparatively less. Therefore, the housing market in Portland has also been very hot for the past few months, with people buying residential properties in different locations.
First-time buyers are especially showcasing more and more interest in finding a good residence in an area with a better quality of life and better cost of living. Even though the housing market in Portland is showing signs of cooling, the value of metro homes has increased by 8.5% in 12 months. In the last decade, Portland home values have increased by nearly 143.5%.
Portland is a beautiful city close to the mountains and forests, which makes it a perfect place to purchase a house and work remotely. However, compared to metropolitan areas, Portland lacks room for developing new projects and neighborhoods. Due to this, introducing new housing units is a challenge for developers, and the availability of homes is also a persistent issue. This may cause home prices to increase consistently.
Portland's Need To Adapt To The Hybrid And Remote Policies
Employees and self-employed individuals will work remotely or with hybrid policies for years. Many residents in and around Portland have altered their lifestyles to make better decisions and maintain work-life balance. Therefore, the housing markets and real estate industries should also adapt to the new taste of buyers and investors.
If you are a home buyer or seller who needs assistance with properties, you can consult an expert Portland property management company, like PropM. PropM, Inc. provides outstanding property management services in Portland for single and multi-family homes. We operate throughout the Portland metropolitan area including Portland, West Linn, Lake Oswego, Beaverton, Wilsonville, Tigard, Happy Valley, Hillsboro, Sherwood, Oregon City, Milwaukie, Clackamas, Gladstone, and Tualatin.