Telecommuting Impact on Real Estate

[Brian Driscoll]

Hi all. Newbie investor here. The only property I own right now is the one I live in, a condo in Somerville, MA. I've been doing a lot of reading and meditating on where the next opportunity will be coming out of where we are at right now. One topic that I keep re-visiting is the long term impact of telecommuting on the value of real estate in non-traditional areas. As someone who lives in the city, part of the draw of being here is proximity to high class educational institutions, but also proximity to the Boston tech scene for jobs. My feeling is that a lot of companies are going to think more critically about embracing employees working from home, both from the ability to reduce overhead in rent/lease costs, but also because employees are going to become more efficient doing such. 

What are some thoughts on how telecommuting will impact real estate value?

Brian

[Rory Gill]

Part of the discussion assumes that the attraction to an urban center is proximity to work.  That's certainly part of it, but it's not the whole story.  People also decide where to live for access to friends, family, and cultural resources.

For that reason, I'm skeptical that the work-from-home revolution will see an exodus from places like the Bay Area to the Midwest.  I also don't suspect that the urban core will disperse to rural areas.  Instead, I'm curious to see what this means for smaller urban centers within metropolitan areas.  In the Massachusetts context, telecommuters may see value in places like Salem/Beverly, Lowell, and even Worcester - places that offer less expensive housing but still have their own cultural centers.

If the work-from-home trend is partial (e.g. only some days per week), some workers may be willing to tolerate a longer commute on the days that they do visit the office.