Collins: How COVID-19 has influenced South Bay real estate trends
Suburban cities such as Gilroy, above, have seen an influx of people seeking larger accommodations that include home office space. Courtesy photo.

COVID-19 has affected our everyday life in almost every aspect. Homebuying is no exception.

The pandemic did not necessarily create new trends but rather accelerated them. Prior to COVID-19, online shopping already had been on a considerable upward swing. The pandemic just boosted it.

The same can be said about remote working or working from home. As regional housing prices continued to rise and the technology empowering remote working and collaboration improved, companies were more willing to embrace a work-from-home strategy as a way to retain top talent. COVID-19 and our stay-at-home orders supercharged this movement in an undeniable way.

As such, the ability to work remotely has had a profound effect on what buyers are looking for in a new home. Many homeowners and renters have taken the past several months to evaluate their living situation given the “new normal.”

“I’ve seen an increase in demand for homes further away from commute centers,” said Brad Gill, broker-owner of NextHome Lifestyles. “The reason for this is, these buyers want more space at a more reasonable price. They’re OK with the prospect of moving further away from their work as long as they can telecommute several days a week.”

Open floor plans of the past are being reconsidered as buyers are looking for not just one but often multiple home office spaces. Both spouses may need to be able to effectively work at home while others are looking for extra remote learning space for their school-age children.

COVID-19 also has had many families reconsider living in densely populated housing, especially as the surrounding amenities they have enjoyed have, in many cases, shut their doors.

Karen Nelsen of Intero Real Estate notes there is a big push back to suburban and even rural areas.

“People are going stir crazy locked up in these apartments and smaller condos in the city and are moving to more rural places because they can,” Nelsen said. “The low interest rates have really opened up a lot of opportunity for buyers. I’m seeing families move from San Jose to Morgan Hill and Gilroy. They are finding they can get more space and great neighborhoods. Some are even relocating to Rocklin, Sacramento, El Dorado County or even out of state while still maintaining their Silicon Valley job.”

With shelter-in-place orders, the need for personal green space seems as vital as ever. The backyard playset for the little ones and family vegetable gardens are all the rage. I have even seen front yards in my neighborhood with freshly planted fruit trees as households look to be more self-reliant during the shutdown.

So what does this all mean in the long run for housing?

In the short term, we expect the outward migration from the city center to more suburban or even rural areas to continue. However, as the economy begins to rebound and downtowns become vibrant once again, you will slowly see those downtown condos start to fill up again. People move downtown for culture, music, great food, and nightly entertainment. All that is on pause right now until we get the vaccine widely distributed.

And the long-term prospects of a remote workforce? While a more flexible work environment will likely be the long-term trend, we already are hearing of a shift back to the office when that is allowed.

Some jobs can be done at a high level remotely; others need that face-to-face collaboration. It’s so very difficult instilling a company culture when workers don’t really get to experience one another. So the tech campuses are probably here to stay.

However, office space will be more heavily scrutinized moving forward. The big tech land grab will probably also be on pause as employers evaluate their long-term office requirements.

Despite all this uncertainty, all indications are that the housing market should remain strong this year.

San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. Contact Neil at [email protected] or follow @neilvcollins on Twitter.

 

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