The Impact of Remote Work on Urban and Suburban Real Estate

Remote work isn’t just a workplace trend—it’s reshaping the world around us. From urban high-rises to suburban cul-de-sacs, the rise of working from home is having a profound impact on real estate markets. Whether you’re a real estate investor, an urban planner, or one of the many professionals who now enjoys the comforts of a

This blog outlines the impact of remote work on urban and suburban property, with actionable insights summarized into data, tables, and strategic implications.

Urban Property Is Faced with New Challenges and Opportunities

Remote work has introduced a tangible shift in the functioning of cities. With fewer commuters on a daily basis, most city centers are experiencing a shift in rental demand, commercial property use, and overall real estate value.

Empty Spaces Are Becoming More Prevalent

Cities such as New York, San Francisco, and London, which were once celebrated as world centers, are losing their workforces. Why? If employees don’t need to be in the area of the office, they’re opting for more spacious and affordable housing elsewhere instead. That’s left many rental apartments and office skyscrapers in prime city locations empty.

Here’s a snapshot of pre-COVID rental vacancy rates versus current rates in urban cities:

City	Rental Vacancy Rate Pre-2020	Current Vacancy Rate (2023)
New York City	3.5%	7.5%
San Francisco	4.8%	9.3%
London	3.9%	6.8%

With more empty space, landlords and real estate companies must make buildings competitive by:

Reducing rents or providing free months in leases.
Offering amenities like coworking space or gyms.
Redesigning building floor plans to attract remote working tenants.

Repurposing Commercial Spaces

Demand for office space is also declining. U.S. office vacancy rates rose to a 30-year high in 2022, especially in commercial districts previously occupied by full-time office workers, said CBRE.

Other cities view it as an opportunity, however. Urban planners and developers are transforming vacant office buildings into residential apartments, building up long-term housing and revitalizing city centers in the process. It’s a complex but fascinating trend with the promise to re-imagine urban living.

The Rise of the Suburbs

Remote work hasn’t just impacted cities—it’s triggered a resurgence for suburban living. Remote employees, wanting to get away from city traffic and costs, have fled to the suburbs.

Why Are Remote Workers Relocating Suburbs?

There are a variety of explanations that remote employees are being attracted to suburbs:

Affordability: Suburban homes provide extra room at a lower cost compared to city living.
Space and comfort: Homes with larger home offices, garden spaces, and more storage facilities are ideal for home working and family living.
Lifestyle: The suburbs allow a more tranquil lifestyle, better schools, and a family environment.

This need has pushed up the price of property in preferred suburbs to high heavens.

	Median Home Price (2019)	Median Home Price (2023)	% Increase
Austin suburbs	$289,000	$435,000	50.5%
Denver suburbs	$355,000	$540,000	52.1%
Charlotte suburbs	$255,000	$395,000	54.9%

If the trend continues, those investors looking into suburban property will be winners—especially in those suburbs with satisfactory internet coverage, local amenities, and proximity to cultural activities.

Balancing Demand with Sustainability

As much as the trend toward suburban living might be enticing, it does represent environmental sustainability problems. Urban expansion, greater commutes (albeit part-time), and infill development each have their respective environmental and localized infrastructure costs.

Opportunities for Urban and Suburban Planning

These problems can be minimized by city planners and developers by:

Creating mixed-use developments combining residential, retail, and office space to enhance city-suburb connectivity.
Building green homes with energy-efficient floor layouts.
Enhancing public transport systems in order to commute to the city centers as and when needed.

Building communities which have the best of suburban freedom and access to cities will be the future of real estate development.

Real Estate Opportunities for Investors

If you’re a real estate investor, this is how you can get on the same wavelength as these trends:

Urban Repositioning: Invest in lower-cost urban real estate that could be repurposed or redeveloped to serve remote workers. Studio apartments with appended coworking space, for example, would be a winner.
Suburban Expansion: Invest in suburban hubs that are growing in population but are still unsaturated. Smaller cities close to larger metros come to mind.
Hybrid Opportunities: Invest in areas that provide the best of both city and suburb, e.g., walkable towns that provide city-like services and suburban room.

Those investors who understand these trends and adjust their strategies to respond to the needs of workers in the right way will be best set up for profitability.

The Role of Technology in the Market Shift

Another driver of real estate trends is technology. Without the technologies of Zoom, Slack, and cloud collaboration tools, remote work would be impossible, and those same technologies are now enabling people to live anywhere. Cities and suburbs that can accommodate a tech-enabled workforce will be best positioned to thrive.

Apart from that, real estate websites are also coming up with innovations to offer services to this generation through property searching via artificial intelligence and virtual tours to enable transactions and bookings online.

The Long-Term Impact of Teleworking

While nobody is sure what the long-term implications of home working will be, one thing is clear—it already is transforming property markets and will go on transforming them for generations. Cities most likely will adapt to meet new patterns of work and living, and the renaissance in suburban desirability could result in more investment and infrastructure for suburbs.

For those who work from home, the change is a matter of increased flexibility and quality of life. For real estate developers and urban planners, it is an era of creativity and possibility as they reconfigure space to accommodate changing demand.

Maximize This Window of Opportunity

The real estate market, shaped by the prevalence of remote work, is brimming with opportunities for investors, urban planners, and developers. Whether you’re planning your next real estate venture or working from home in your ideal location, staying on top of these trends will ensure you’re ahead of the game.