When contract administrator Teresa Walter decided earlier this year to move from California to Idaho, she didn’t expect to continue working at her California job. But then she realized the cost of health insurance made her retirement plans unaffordable, at least for now. She seized on the opportunity offered by her employer to continue working remotely.
“Not having to pay for my own medical and dental and vision insurance — it was an offer I couldn’t refuse,” she said.
Walter isn’t alone. Many people decided to move during the pandemic for a variety of reasons. For some, the move was inspired by the pandemic and made possible by remote work. What remains uncertain, however, is what percentage of jobs will remain remote post-pandemic.
An academic study of 300,000 interstate moves between April 2020 and February 2021 found that as many as 20 percent of them were influenced by Covid-19, indicating a significant shift in migration toward smaller cities and locations with fewer pandemic-related restrictions.
“There may still be moves directly related to Covid, but I think the broader question about how stable these migration patterns are is really reliant on how much remote work is going to stick around,” said Peter Halsag, an assistant professor of finance at Vanderbilt’s Owen Graduate School of Management, one of the study’s authors.
“It would be surprising that people would move if they thought that this was a temporary thing,” he added.
According to a National Association of Realtors (NAR) survey at the end of last year, more than half of U.S. homeowners who purchased within the previous 12 months were working from home and 62 percent prefer to be remote.
Consulting firm PwC found in a March 2021 survey that 22 percent of workers were considering or planning to move more than 50 miles from one of their employer’s main offices.
Still, the NAR poll found that the respondents’ employers had told only 48 percent of them that they could continue to work remotely.
Remote work influences decisions to move
Despite the uncertainty of its continuing, the prevalence of telework during the pandemic greatly influenced people’s decisions to move. According to Halsag, the ability to work remotely was more of a factor in migration decisions than the infection rate in a particular city.
After reviewing tens of thousands of change-of-address forms from the U.S. Postal Service, the NAR reached a similar conclusion last year when it estimated that about 9 million people moved between March and October last year during the pandemic-induced surge in remote work.
Walter, the contract administrator, purchased a three-bedroom home in the Boise suburb of Nampa for $375,000. She wanted to be near her best friend, who also lives in the town of 94,000.
Even though she paid $15,000 over the property’s asking price, Walter thinks she got a bargain since a similar property in the San Francisco area, where she previously lived, would cost about $1 million.
Given the current market conditions, Walter fared well.
Pandemic causes fluctuations in the housing market
According to Realtor.com, the average listing price for Nampa homes is $406,000, up more than 30 percent from a year ago. Properties remained on the market for an average of 36 days as of April, down from 77 days in January 2019.
There are plenty of ex-Californians who now call Idaho home. The NAR estimates that about 13 percent of the people who relocated to Idaho between March 2020 and October 2020 came from California. Only neighboring Washington State accounted for more.
Other states experienced record out-migrations.
According to preliminary Census figures, New York’s population fell by 126,355 people between July 2019 and July 2020 to 19.3 million, a drop of 0.65 percent. That’s the most of any state by total and by percentage. By contrast, Florida has gained 241,256 people since July 2019. Only Texas increased its population more over the previous year, Census data show.
According to the NAR, residents within Texas are migrating from cities like Austin to suburban areas like Williamson County, where median housing prices are up more than 30 percent over the past year.
“That probably has a good deal to do with the pandemic effect of people looking for space,” said Jim Gaines, an economist with Texas A&M’s Real Estate Center. “If you don’t have to commute or don’t have to commute as much, then you can. It’s easier to accommodate moving further out.”
‘Demand has far exceeded supply’
Nationally, the median home price reached a record high of $329,100 as of March 2021, according to the NAR. Inventories of existing homes were 1.07 million, a decline of more than 28 percent compared with a year ago. These homes typically sold within 18 days of being listed on the market, the speediest ever recorded. When the coronavirus pandemic began in March 2020, houses remained on the market for an average of 29 days.
“It has the traditional earmarks of a market where the demand has far exceeded the supply,” Gaines said. “Homebuilders are building houses as fast as they can. They just can’t make them any faster.”
Still, the question remains if remote work, which enabled the far-flung house-buying spree, will last, as Fortune 500 companies including JPMorgan Chase, Goldman Sachs and Citigroup along with Google, Facebook and Microsoft have announced plans to reopen their offices.
Vanderbilt’s Halsag feels that the trend will continue, at least to some extent, because of the popularity of remote work.
“There’s at least some proportion of these moves that are going to continue due strictly from this increased prevalence and preference for work from home,” he said.