Let’s Talk Real Estate – March 2021

The pandemic has been an agent of change; years of change have happened in just a few months. We have seen the change in behaviors and habits that have affected many industries short term and long term. Travel, eating out and live events have all but disappeared. E-commerce grew from 14.3% of retail sales in 2019 to 21.3% in 2020 and social gatherings have been limited to small gatherings of friends. One of the greatest agents of change that has come from the Pandemic is the trend of office workers to have the ability to work from home, no longer requiring them to live close to their corporate offices.

Many of these changes in behaviors will continue long after the Pandemic is over. In a recent Wall Street Journal article, five CEO’s of hi-tech companies were asked if office workers will be able to work from home once the pandemic is over. Here are their answers:

  • Twitter: The majority of office workers will be allowed to work from home
  • Google: Office workers will be allowed to work from home until summer of 2021 then a final decision will be made
  • Facebook: About ½ of the office workers will be allowed to continue to work from home
  • Microsoft: Case by case who will be allowed to work from home
  • Netflix: All office workers will be required to return to the office once the Pandemic is over

In addition to saving on office rent, many companies are adjusting their employees’ salaries if they move to areas with a lower cost of living. This can be a financial win for companies and a win for the employees who can now live where they want. U.S. office occupancy is down 41.3% and although it’s expected to get better, it’s unlikely to return to pre-pandemic levels. So, given the opportunity to work from a home office, what are the location preferences of office workers? That question was answered by a recent survey from the National Association of Realtors (NAR). (Respondents could choose more than one)

  • 47%: Suburbs / Subdivisions
  • 39%: Rural Areas
  • 25%: Small Town
  • 14%: Urban Area/ Central City
  • 13%: Resort Community/Recreation area

Southern Oregon is a match for 77% of the respondents. We are a rural area, filled with small towns, surrounded by a great recreation area. This is evidenced by the 2020 Home Sales where the greatest growth in Oregon has been happening in Bend, Hood River, Northern Coast, and Southern Oregon. In 2020, Jackson County outperformed the US for home sales and escalating home prices. In just the last 90 days, we have seen home prices increase by 15%, pushing the median price of an existing home up to $346,000. Home sales of existing homes are up 10%, and rural home sales are up 20%.

In addition to becoming a “Zoomtown” for displaced office workers, we are seeing a large number of local homeowners taking advantage of all-time low interest rates to upgrade their living circumstances. Many are trying to accommodate their needs in this pandemic period while anticipating a post pandemic period, upgrading to homes with enough room to add a home gym and home office.

So Zoomtowns are real and here to stay. The ability for large numbers of office workers to work from home will have a long-lasting effect on Southern Oregon and towns like Jacksonville. The pandemic has been, and will continue to be, an agent of change, accelerating the movement of office workers from cities to rural areas, putting a strain on available housing in rural areas.