Compass Money: Work from Home Forever? The Future of Office Spaces After COVID-19

After setting nine record lows since March, mortgage rates have ticked up as of September 24. The average interest rate on a 30-year-fixed-rate mortgage increased from 2.86 to 2.90 percent—making it one of the cheapest times in U.S. history to take out a mortgage. Coupled with the rising popularity of working from home, the housing market boom may present unfavorable implications for the return to office spaces after COVID-19.

Many people have argued for decades that some of the work done in shared office spaces could be done better at home. With the COVID-19 outbreak, able companies transitioned their employees to remote working in a matter of weeks, creating a mass migration from the office to the home.

Those who suddenly found themselves working from cooped-up living spaces in expensive urban neighborhoods began to consider moving out of cities and into more spacious suburban homes. "People who could barely afford to rent a one- or two-bedroom apartment in New York or San Francisco are finding that with their newly remote job, they can buy a nice-sized house in the most desirable part of a place like Sacramento, Tampa or Las Vegas," said Redfin chief economist Daryl Fairweather. He predicted that this trend would likely continue as remote work becomes prolonged for more companies. 

Others decided to purchase second full-time homes. “We needed to get out of the city for awhile," expressed New York resident Lina Stillman, who temporarily left Brooklyn to live full-time in Connecticut. "It was a perfect storm. It was concerns [sic] about health, combined with low [mortgage] interest rates, combined with the fact that we are working from home, and it was getting ugly.”

Recent reports show that working from home might even make workers happier and more productive. An event study published in July by the National Bureau of Economic Research revealed that the average length of live meetings decreased by 20.1 percent since before the lockdown. Conversely, the frequency of email communications increased. The average worker in most countries claimed that they got more work done at home, but such self-reported data might raise questions of reliability. Some workers may have also increased their productivity out of the fear of job loss during this pandemic downturn.

While many U.S. factories and stores have returned to normal occupancy, most office spaces remain unoccupied six months after their abandonment. JP Morgan Chase ordered its trading-floor staff to return to the office by September 21, but traders have already expressed disappointment at being uninformed about a new COVID-19 case in the building.

“In all candor, it’s not like being together physically. And so I can’t wait for everybody to be able to come back into the office. I don’t believe that we’ll return to the way we were because we’ve found that there are some things that actually work really well virtually,” expressed Apple Inc. CEO Tim Cook.

As companies strive to construct reopening plans, they will have to especially consider outbreak prevention, worker safety, and employees’ peace of mind.