How Remote Work Impacts the Demand for Suburban Real Estate
Living in a spacious home that’s also close to work is something that most people don’t (or at least didn’t) have. But you can’t have your cake and eat it, too, right?
If you live close to your office, that’s a big deal because you’re not stuck with long commutes. However, what you probably are stuck with is a rather small apartment and pricey rent. Oh, well… You have to go to work so it’s not like you can really do anything.
Not quite. Remote work has completely changed the game and these days, it’s completely possible to have your office next to your bedroom, in a spacious house, with a big backyard and a white picket fence. Unfortunately, it’s not all rainbows and cupcakes because nobody will just hand you a house for free. A lot of people work remotely and suburban homes are very popular, which also means they’re not nearly as affordable as they were 5 or more years ago.
How has this shift towards remote work impacted the suburban real estate market and what do you need to consider if you want to get your hands on a suburban house?
The Impact of Remote Work on How and Where People Live
Before, you’d focus on a short commute. Now, you want space and comfort. You may have noticed that many homebuyers want a larger home with a separate office, more than one bedroom, and a backyard where they can relax and unwind. There are fewer people tied to the city centers, so suburbs and even rural areas are getting more and more popular.
It’s not hard to see why. You get more square footage for the same price (or even less) than what an apartment in the city would cost. The demand for suburban houses has skyrocketed, especially after the pandemic. Naturally, as we see more buyers coming into the market, we’re also seeing the prices rising, so there aren’t as many affordable options as there were.
There are inventory shortages in a lot of areas, so if you’re a buyer, you’re faced with a bidding war and costs that just keep going up. Some suburbs are growing faster than others, especially in places where job markets are still strong and where local amenities are the same as those you would find in the city. At the same time, the prices of rent in the suburbs have tightened because many people are waiting until the housing prices stabilize before they decide to buy a property.
How to Buy a Property in a Changing Market
If you want to buy a home today, you shouldn’t be looking at what your friends did a few years ago when they bought theirs because things have changed. Let’s dive into the financial aspect of buying a house.
1. Trends in Mortgage Rates
Mortgage rates have a direct impact on what you can afford. When the rates are low, it’s cheaper to borrow, so it’s easier to buy a home. But as rates rise, monthly payments become more expensive, and that will hurt your budget.
Over the past few years, interest rates have fluctuated as a response to inflation and economic uncertainty. Higher rates managed to cool some housing markets, but the suburbs are still competitive because of the high demand (thanks to remote workers).
The best thing to do would be to keep an eye on the latest loan rates to see when’s the right time to make a move and get the best financing.
2. Issues with Loan Qualification
For someone who works in an office and gets a steady paycheck, it’s usually pretty simple to qualify for a mortgage. But if you work remotely and if you’re self-employed or you work contract-based jobs, things tend to get complicated.
Lenders want to see an income that’s stable and predictable, so freelance and gig workers don’t have it that easy.
3. Property Taxes and the Differences in Cost of Living
If you move to the suburbs, you’ll most likely get more space for your money, but you also need to think about ongoing costs and how they compare to living in the city. Property taxes are different according to the area, and in some cases, suburban homes have higher tax rates than city apartments.
Then you have utilities, transportation, and home maintenance; it all adds up. Before you go ahead with that purchase, make sure to factor in these costs so there are no unpleasant surprises down the road.
Final Thoughts
Choosing whether to live in the suburbs or in the city is anything but simple, but is buying a property with GatorRated ever simple? Regardless of where you choose to live, it will be a process. However, if you don’t rush and you consider all the costs, it will go much smoother and you’ll save yourself from a lot of frustration.
