Sure ‘Renter Nation’ Escape Route: Buying Annapolis Homes
DAVIDSONVILLE, ANNAPOLIS, EDGEWATER, ARNOLD AND SEVERNA PARK REAL ESTATE
Annapolis readers may have come across a worrisome prospect being suggested by some prominent real estate pundits: the likelihood that the steady rise in residential real estate values will trigger the emergence of a “renter nation.” That could develop if more and more people, priced out of the market, are unable to escape the financial downside of a lifetime of renting rather than owning.
Despite steady residential price rises, another group of experts is not so sure about the inevitability of that “renter nation” future. A handful of recently published estimates evidence a countertrend: the emergence of millions of renters now suddenly able to afford starter homes!
This is a consequence of the COVID-19 pandemic: one affecting large swaths of the American labor market. According to the U.S. Bureau of Labor Statistics, one recent estimate shows that “31% of workers who were employed in early March had switched to working at home by the first week of April.” The majority of jobs still require significant onsite presence, yet “…37% can be performed entirely at home.” This teleworking phenomenon means that millions of workers are now newly freed from the need to live within daily commuting distance of their workplaces. It follows that rural and exurban communities, where lower population densities allow starter homes to carry lower price tags, may emerge as practical alternatives for newly empowered home workers. So a “renter nation” America becomes less likely.
Last week, the Wall Street Journal confirmed a “new reality” for at least some of the newly homebound workers: pay cuts. Citing the lower cost of living homeworkers encounter in their new exurban and rural communities, some Silicon Valley high tech firms are deciding to lower salaries “related to housing costs and other factors.” It’s an adjustment that would result in less of an exodus from higher-priced areas, bringing back the possibility of the future “renter nation.” TBD.
Lately, keeping track of the waves of projected trends is even more dizzying than ever. What remains is the long-term benefit that those who succeed in buying Annapolis homes can reasonably expect. Call me to explore the latest Annapolis offerings!
DEBORAH LAGGINI, Long and Foster Real Estate, Annapolis, MD 21403
REALTOR, Annapolis, Davidsonville, Edgewater, and Surrounding Communities