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Prosper planet pulse
Home»Markets»Boston’s remote work influence may dominate the hottest housing market
Markets

Boston’s remote work influence may dominate the hottest housing market

prosperplanetpulse.comBy prosperplanetpulse.comApril 4, 2024No Comments6 Mins Read0 Views
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When you try to describe today’s world of residential real estate, images of unprecedented million-dollar cities and a frenzied housing market come to mind. But Boston’s frigid climate and its (extensive) commuter area make it some of the hottest housing markets, Realtor.com says.

According to the site’s index, New Hampshire’s Manchester-Nashua metropolitan area had a It was the hottest housing market in the country. In other words, this area around New Hampshire’s southeastern tip has long been famous as a tax-friendly haven for wealthy Bostonians who can afford a second home, and many people buy a home right away or This means that they are considering it.

While home prices nationwide rose less than 0.5% in February, home prices in the Manchester-Nashua area rose 3.8%, well above normal. But it’s not the only New England market in the top 10. A whopping 7 of the 10 most popular markets are within a two-hour drive of Boston, including the Boston/Cambridge area itself. Boston is adapting to the era of hybrid he works, and these will either be bedroom towns or super bedroom towns.

Beyond Manchester is the central Massachusetts city of Worcester, which ranks third on the list. The western city of Springfield quickly followed in fourth place. Boston itself is No. 6 on the list. Hartford, Conn., which is equidistant from Springfield to Boston, follows in seventh place, tied with Providence, R.I., which is reasonably close. And at No. 9 on the list is Concord, New Hampshire, just 20 minutes away from Manchester.

According to Axios, none of these markets are exactly the same, but they do have one thing in common: lower home prices and a significantly smaller population than Boston. Boston has been something of a “remote work capital” for years. Remote work peaked in 2021, with nearly 27% of people in the Boston metropolitan area working from home. According to the latest available census data, remote work has not decreased significantly, with more than 20% of people continuing to work from home in 2022. Major Boston employers, including Square and PwC, have offices in the city and have adopted hybrid and remote work models. According to the Commonwealth Beacon, one analysis found that a decline in office values ​​could lead to a 10% reduction in the city’s revenue. “The rise in remote work and the associated decline in office values ​​is eroding the tax system and is likely to continue for a long time,” said a report published by the Tufts University Center for National Policy Analysis and the Boston Institute for Policy Studies. . Said.

secondary city

Granted, these hot housing markets could be second home purchases by wealthy Boston residents, or first home purchases by locals, and there’s no way to know for sure. But her five remote workers in Boston could just as easily work in Manchester, Worcester, or even Springfield. Nevertheless, Boston remains a major economic powerhouse in the region, even as the effects of remote work appear to be lingering.

“Although the number of residents employed in Boston facilities is approaching pre-pandemic levels, the number of commuters into the city in December 2022 remains 41.4 percent below levels for the same month in 2019.” the Boston Planning and Development Authority said in a report last year. . “The number of commuters in the second half of 2022 increased only slightly compared to the second half of 2021, confirming that the remote and hybrid working arrangements established during the pandemic are being maintained.”

Also, consider arbitrage on home prices if you are a hybrid or remote worker in the Boston area. The average home price in Boston is nearly $720,000, compared to around $390,000 in Manchester and Worcester. The average home price in Providence is approximately $373,000. The one in Hartford costs just $162,000, according to Zillow. Just last year, Jeffrey Thompson, vice president and economist at the Boston Fed, said housing affordability was a concern and that New England wasn’t building enough housing to keep prices down. Mr Thompson made the remarks at the central bank’s own economic meeting, which focused on housing and discussed remote working relative to demand. “If more people continue to work from home, that could change housing demand,” said the professor emeritus at Northeastern University.

None of the six housing markets listed above can match Boston’s in terms of cost. So if you’re a hybrid or remote worker who was previously or currently based in Boston, you might be wondering, especially in a time when housing prices are so tight, when you need to make an extra $30,000 to build a home. People may be choosing to move to these surrounding metropolitan areas because they are cheaper. If you can afford a median-priced home, or the salary required to buy a starter home has nearly doubled since the pandemic.

Additionally, an interactive tool included in Apartment List’s Renter Migration Report shows that 5.6% of users living and renting in Boston are looking for a home in Manchester, 7.4% in Worcester, and 11.3% in Providence. It is shown that they are looking for a home.

as luck It was previously reported that what appears to be a new kind of remote work city added $2 trillion to its housing market last year. That’s because more affordable metro areas saw the biggest gains, while “expensive metro areas and pandemic boom cities” declined or declined. According to Redfin analysis, the gains are negligible. For example, two New Jersey towns saw home prices rise by more than 10% each. That’s in part because “it’s cheaper than New York prices and is attracting demand from people who can now work remotely,” the analysis said. Furthermore, similar metropolitan areas experienced these gains because “home prices are affordable and as mortgage rates and home prices rise, demand for affordable housing increases.” Redfin said at the time.

These cities are similar to what the World Bank calls “secondary cities.” These are like “secondary hubs” of much larger metropolitan areas, or places people go after leaving a rich city like Boston. Needless to say, home prices in each of these tier 2, semi-cities, or remote work cities (whatever you want to call them) have increased by just under 10% or more over the past year. Meanwhile, Boston itself saw home values ​​increase by only 2.6% over the same period, according to Zillow.

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