Real estate is inherently local, with property value closely linked to the economic aspects and characteristics of specific regions. While understanding the national home price forecast for 2025 provides worthwhile context, savvy investors should deal with identifying cities and states with stronger growth potential. After all, outperforming the market is just as essential as generating returns.
An interesting area to observe is cities where the next percentage of employees are returning to the office. Since 2020, thousands and thousands of employees have reaped the advantages of work-from-home policies, but there are increasing signs that this trend is reversing.
As more corporations push for office visits, cities with a strong office economy and rising workplace reoccupancy rates could see a surge in housing demand. This shift may lead to a greater increase in property prices in these areas as employees move closer to their offices, revitalizing urban centers.
Invest in cities which might be returning to the office
Similar to how “Zoom cities” like Boise, Idaho, thrived in the course of the distant work boom, cities that transition back to paperwork will likely see a surge in housing demand. While most employees prefer flexibility, corporations pushing for a return to the office will boost demand in urban areas.
Recent data shows that fully distant employees are in metropolitan areas comparable to:
- San Jose-Sunnyvale-Santa Clara (35% fully distant, decreasing to 16% by 2023)
- San Francisco-Oakland-Berkeley (35% -> 21%)
- New York-Newark-Jersey City (23% -> 14%)
- Boston-Cambridge-Newton (27% -> 18%)
- Seattle-Tacoma-Bellevue (31% -> 20%)
- Los Angeles-Long Beach-Anaheim (21% -> 15%)
- Washington, DC-Arlington (33% -> 22%)
Check out this more comprehensive table compiled by Lance Lampert, the book’s creator ResiClub newsletter.
Common theme amongst cities with the most important return-to-office shifts
A key feature of the cities experiencing the strongest return-to-office trends is their inherent difficulty in creating recent housing supply. Years of undersupply have primed these cities for increased competition, likely resulting in bidding wars which might be driving up each rents and property prices. As more employees return, demand for each residential and industrial real estate will increase, making these cities hotspots for real estate activity.
The transition is not going to trigger an instantaneous boom. First, the present inventory will probably be absorbed as migrants and office tenants adapt to the changing dynamics. However, once return-to-office norms stabilize, pressure on limited housing inventory is anticipated to drive prices higher. The interaction of strict land use regulations and low loan-to-value ratios reinforces this effect.
Let’s take San Francisco for instance. Building recent homes is notoriously difficult on account of strict regulations and high construction costs. Obtaining a constructing permit often takes years, assuming the property is even intended for development. Then you might have to construct the rattling structure! I actually have tried to get a permit to construct an ADU prior to now but gave up after six months.
As tech corporations thrive and implement hybrid work policies that require at the very least three days within the office, demand for housing in tech hubs like San Francisco, San Jose and surrounding areas is increasing.
The ongoing bull market is leading to significant wealth creation, which not only attracts more employees to those areas but additionally flows significant company equity into real estate investments.
The only solution to truly enjoy your stock profits is to make use of them to purchase something meaningful or fulfilling. This double effect – increasing demand from employees and increased purchasing power through capital appreciation – further increases competition for housing in these high-growth regions.
The return of huge city real estate
Like so many things—politics, social justice issues, educational trends—the pendulum tends to swing from one extreme to the opposite. The Sunbelt and Midwest regions had their time within the sun from 2017 to 2022. Now cities like Austin are coping with a hangover as builders work through their inventory. They may experience one other boom in 2026 or 2027 on account of the present undersupply of living space.
But I expect metro real estate to outperform in the subsequent few years on account of the return to work. So if you happen to own a property in one among the cities with the very best return to office shifts, I might follow it. If you have been occupied with constructing a rental real estate portfolio, it is advisable to buy before a huge wave of money from tech and AI corporations enriches tens of 1000’s of employees.
And if you happen to’re a long-time landlord seeking to simplify life and earn more pure passive income, possibly it is time to harness the ability and sell.
Employees and employers are rational actors
People who wish to receives a commission and promoted must follow their company’s return-to-the-office policies. And the overwhelming majority of employees wish to be paid and promoted.
Now, corporations with leaders who once championed work-from-home policies are starting to comprehend that encouraging in-person collaboration is crucial to remaining competitive. They are driven by the lure of achieving mega-million dollar windfalls. This is capitalism in motion!
Yes, it’s sad that the nice times are over for a lot of who need to return to the office. But all good things must come to an end. At least you’ll be able to spend money on corporations that take their work more seriously to extend profits and returns for you. Then you can even spend money on real estate in cities where these corporations are based.
For lifestyle reasons, attempt to work for corporations that provide you with perks like playing pickleball in the course of the day and still receives a commission. These opportunities have gotten increasingly rare. So if you find one, value it as much as you’ll an honest auto mechanic or a reliable craftsman.
Pensioners also profit from returning to work
Life will probably be slightly quieter for retirees. Without the identical weekday crowds, it’ll likely be easier to book seats, attend matinees, and stroll through parks. Running errands will take less time and your favorite places will probably be less crowded.
As thousands and thousands return to fluorescent-lit offices in quest of more cash, your decision to get away from the hustle and bustle pays off much more – supplying you with more peace of mind and freedom.
From a psychological perspective, there’s a reassuring feeling of satisfaction knowing that your investment company employees are doing more for you. Although investment returns are never guaranteed, it’s reassuring to feel that the possibilities of a cushty retirement are increasing.
What a present it’s to see employees return to the office and strive for growth again!
Invest strategically in real estate
If you do not need to purchase and manage physical rental properties, consider investing in private real estate funds as an alternative. Call for donations is a platform that lets you invest 100% passively in residential and industrial real estate. With a minimum investment of $10, you’ll be able to easily spend money on real estate at dollar cost average without the trouble of a landlord. .
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