Wednesday, July 6

Hybrid work spawns hybrid housing as homeowners buy two properties in bet flexibility sticks


Two-home real estate moves carry risk amid potential recession, some company execs demanding return to office

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Hybrid work schedules are spawning a hybrid housing trend.

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Real estate agents nationwide report that their clients are increasingly opting for dual residence: a small pied-à-terre near the office and a larger home within an hour or two in a more scenic or family-friendly area. The new lifestyle is fuelled by hybrid work arrangements that curtail some workers’ office days to as few as one or two per month, and recent housing market gains that allow homeowners to cash out of pricey regions and comfortably purchase elsewhere. It’s the latest iteration of splitting time between various locations, which became popular during the pandemic.

This reallocation of housing spending reflects when and where employees plan to work in coming years. “They’re banking on a hybrid future,” said Chris Heller, chief real estate officer of housing sale platform OJO Labs. “People have grown accustomed to a higher quality of life through hybrid schedules, and they’re rethinking where and how they live, and their proximity to work.”

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These two-home real estate moves carry risk amid a potential recession and some high-profile company heads telling workers it’s time to return to their desks. Elon Musk has demanded that Tesla Inc. staff stop “phoning it in” and get back to the office while civic leaders like New York City Mayor Eric Adams have urged companies and workers to help revive the city by returning to the office.

People have grown accustomed to a higher quality of life through hybrid schedules, and they’re rethinking where and how they live

Chris Heller

But some who have placed this bet see financial opportunities as well as lifestyle benefits. Tim Connon, the chief executive officer of Paramount Quote Insurance Advisors, purchased a 500-square-foot home five miles from his office in Altamont, Tennessee, in 2021. This year he bought a 1,500-square-foot home 20 miles away in Palmer, Tennessee, where he spends most of his time with his wife. Connon enjoys the space of his second home — and the chance to enjoy real estate profits on two properties .

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“We like it because it’s two different assets,” he said in an interview. “In the future we could make a little side income using our secondary home as a rental.”

The two-home trend is particularly hot outside of San Francisco. “We’re getting a ton of traffic from the Bay Area from anybody who has the ability to condense their work week,” said Cory Meyer, owner of Cory Meyer Real Estate Team in Redding, California. “I just sold a home to an executive in the financial department at PG&E, and I’ve got highway patrol and firefighters that travel down to the Bay to do their two to three days on shift.”

The Sacramento River flows through the downtown area as viewed on a smoky afternoon on August 4, 2021, near Redding, California.
The Sacramento River flows through the downtown area as viewed on a smoky afternoon on August 4, 2021, near Redding, California. Photo by George Rose/Getty

In Redding, a 2,500-square foot home hits the market for approximately US$500,000, sometimes on an acre or two of land. Workers coming up from the San Francisco metro area or elsewhere now make up a quarter to a third of Meyer’s business, and are a new addition to his clientele. “Working remotely just wasn’t a thing previously,” he said. “There’s definitely a snowball effect once people’s friends see the lifestyle that they’re able to buy here.” Recent upgrades to the region’s internet capabilities seal the deal, he said, though the median house price in Redding has already jumped by about 25 per cent in two years, according to realtor.com.

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Workers are also relocating east of San Francisco. “We’re seeing people moving further east into Central Valley and also toward the foothills,” said Ron Cedillo, who owns Home Buyers Realty in the Stockton and Modesto region, with some clientele from Apple Inc . and Meta Platforms Inc. He said that many are motivated by fresh memories of a pandemic spent holed up in small places. “They’re looking for space, and thinking that if they ever go through a pandemic again, they want to say, ‘Yeah, I can live comfortably in my household — there’s room to stretch and work.'” His clients typically rent a small apartment or room in Silicon Valley, often with co-workers.

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Cedillo has long worked with professionals planting their families away from the city, but says that his clients are now pushing further into Calaveras County, sometimes a three-hour drive from the office. “We noticed that some are now single-income families, because they can make it on one income out here,” he said.

Some boomers are also in on a version of the two-house solution. “They’re selling at the top of the market, and then we’re helping them get into that smaller condo or patio home so they can finish up their last couple years in the workforce or be close to grandkids,” said Jennifer Young, head of a real estate team with Keller Williams Realty in the Washington, DC, metro area.

Empty nesters Peter and Janine Velardi bought a 2,400-square-foot condo at 40 West 12th Street in midtown Atlanta, part of a trio of interconnected buildings that also house Google offices and an Epicurean Hotel with a pool and high-end restaurant, where Peter can host client lunches. He consults in private equity, and is chief executive of referral marketing software company ReferMeIQ.

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“One of the things I love is that I can actually see clients and network here in the common areas,” he said. “There are about ten areas where I can meet people.” The couple spends weekends at their home on Lake Lanier, an hour-plus north. “The culture is very different up there. It’s kind of lost in time — this cute, historic Georgia town with a great Main Street and restaurants.”

Bloomberg.com

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