With lots of people now working remotely, I can’t help wondering: is this going to have an impact on real estate?
I was already noticing advertising for new houses touting the inclusion of home office space.
Then I saw this headline: “Nearly 12 Million Square Feet of Vacant Office Space in S.F.”
Nathan B. Hannah, Attorney
So yes, I think there might be new trends coming out of this. I think it’s very possible that the huge shift toward working remotely will be around long term, and that it will result in long term trends of higher demand for residential space (larger living quarters), and lower demand for office space.
Remote work also means, in my opinion, that demand for both office and residential property may decrease in some formerly high-demand areas, since where you are when you’re working doesn’t matter so much (or maybe at all) anymore. That’s another factor that could slow the rise in prices in some areas.
I’m just spitballing. Real estate prognostication is not part of my job description.
What is part of my job description, though, is the mechanics of real estate transactions. As I mentioned in last month’s Update, signing contract documents electronically now seems to be the norm in residential sales and purchases. I suspect things will start moving in that direction in commercial sales and purchases as well.
If you buy or sell a house now, you probably won’t have to physically sign anything until you sign the closing documents. Just about everything leading up to the closing, including the listing agreement, the purchase contract, and any other papers, will be signed electronically.
Another change that you might not notice is that title companies now have the ability to record deeds electronically. That means that the transfer of title to property happens without the deed ever leaving the title company’s office.
And with the advent of remote online notarization, it’s probably only a matter of time until deeds get signed and notarized electronically, too.
As residential real estate sales and purchases become more automated, and therefore more efficient, transaction costs should go down. This could be expected to offset, at least to some degree, the rise in residential prices that should be the natural result of increased demand.
The mechanics of commercial transactions are surely going to change, too, but it will probably take longer, and the way forward is probably going to be less predictable.
In the meantime, I’m no prognosticator, but I’m glad I don’t own an office building in San Francisco.
Nathan B. Hannah is a Shareholder in the Tucson office, and practices in the areas of estate planning and administration, real estate, and commercial transactions. He is also a noted blogger, and you can find more of his articles on his private blog,
Contact Attorney Hannah: nhannah@dmyl.com or 520/ 322-5000
This communication is designed to bring legal developments of interest to the attention of our clients and others. It should not be relied upon as a substitute for specific legal advice in a particular matter. For further information on any of the subjects discussed, or for legal advice in connection with any particular matter, please contact us.
