As I continue to research whether it makes more sense to rent or buy in the current landscape, I find more and more evidence that the pandemic adversely affected rent prices for those not in affluent areas and also possibly drove up housing prices in the process. As if it isn’t already hard enough to catch a break in this economic climate …
For example, in King County where I live in the Seattle area, the median income is approximately $103k — and rents actually decreased (though I can sadly say, mine personally did not). Compare that to Pierce County, which is further south, where the median income is around $79k. They saw a 21% average rent increase, which leads me to believe something is clearly wrong with our system. The more rural and suburban areas seem to be getting punished for their hardships.
Historically the fluctuation in rents has not been directly correlated to the geographies aligned with specific income levels. More often it appears the trends follow the economy of the area (i.e. when Amazon thrived in Seattle and several wealthy tech professionals moved in, everything skyrocketed).
Now, seeing headlines about the local housing market being “on steroids,” I can’t help but think this is an awful time for a first-time buyer who doesn’t have $800k readily available to consider even looking for a property. There is also an urgency to lock in the rates us renters currently have, if possible, because increases are on the horizon for just about everyone despite trending down in my county during the outbreak of the virus.
In a bigger picture sense, I think the markets are upside down in many locations because the coronavirus changed the way so many people work. Some who had never telecommuted before became masters of their home offices and realized how productive they were when not confronted with constant interruptions or on-site office distractions. Now, they don’t want to go back. Alternatively, companies realized how much money they could save from office space and commuter reimbursements and how much less damage they could do to the environment for allowing their teams to go remote. If anything positive came out of the disaster of a year that 2020 was, it was these revelations.
I made the switch to telecommuting in a hybrid way back in 2016, then took on a new role at a startup to work exclusively from home the following year. Every job I’ve had since, including the one I have (and love) now has been 100% remote with only occasional travel (which I also love) required. The beauty of it is that if I want to pick up and go to another city, or even another country, I truly could. I already juggle multiple time zones, so really life wouldn’t change much.
Those with families are finding they may prefer their children and pets having a yard to play in vs. a busy city street, or are simply tired of the fast pace of life near where they work. They’ve discovered that they now have the freedom to choose where to live without risking job loss—and so they’re selling (at a great price) and perhaps even upsizing (at an even better price) in a less populated city or state.
I’ll be curious to see in five years what the trends look like once everyone is settled. Hopefully our collective mental health will improve, the environment will get cleaner, the system will right its wrongs with regard to inequality … and the housing prices will come back down for those of us who hope to someday own vs. rent.