By ERIN FLYNN JAY
Return to the office mandates and the continued desire for a better quality of life are affecting Americans as they decide where to move in 2023.
Companies that allowed employees to work remotely during and immediately after the Covid pandemic are reversing course this year. On Sept. 5, Meta’s requirement that employees assigned to an office show up at least three days a week went into effect.
With the policy change, Facebook and Instagram’s parent company joined Google and other major employers that are pulling the plug on remote work despite advances in technology that allow people to log in from anywhere. Some analysts argue that it is a leadership preference, while others point out that office vacancies have been problematic for companies.
Doug Ressler, manager of Business Intelligence at Yardi, said the office sector has been under considerable pressure as of late, with several high-profile defaults including Brookfield, Columbia Property Trust, and Blackstone garnering media attention.
“With the office vacancy rate for our top 50 metros at 18.8% as of the first quarter of 2023 – just 50 bps below the all-time high of 19.3% observed during the Savings and Loan Crisis – the commentariat are rightfully shining the spotlight on this troubled sector,” said Ressler.
And with the job market tightening, remote job postings are declining, Ressler said. This means employees who want to move to a more rural location will not, while those who skipped town during work-from-home will now have to find a place to live within commuting distance of their offices again.
The migration south continues for people who can choose where they want to go.
According to PODS long-distance moving data, Americans are continuing to move to cities in Florida, Texas, Tennessee, and the Carolinas in droves. More than 80% of the most moved-to cities on their top 20 list for 2023 were in these southern states.
Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors, said various factors are at play here.
“Certainly, some homebuyers may be motivated by better weather conditions, but also at play is a strong job market, a larger home than one may be able to purchase in other areas of the country, and favorable tax conditions in some states,” said Lautz.
People are also moving to be close to their friends and family.
“Overwhelmingly, Baby Boomers are moving to areas that are close to friends and family,” said Lautz. “It is the top motivating factor to sell a home and move. The desire to be close to friends and family is also high among younger Millennial buyers making them unusual for first-time buyers.”
Emil Malizia, research professor in the Department of City and Regional Planning at the University of North Carolina at Chapel Hill, said Boomers are balancing their needs and wants when making these choices.
“If they are retired or otherwise footloose, they consider value as well as cost,” Malizia said, meaning the time it takes to get to grandkids is weighed against the price of a new home.
Affordability is a concern for all generations of movers who intend to buy a house in their new location. Fannie Mae’s Home Purchase Sentiment Index shows that only 18% of respondents say it is a good time to buy a home, and 41% believe home prices will go up in the next 12 months.
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