First, the pic above was the leading picture for a listing I looked at.  I guess they were stressing the work from home conveniences in the office Unfortunately this could lead to some “interesting” conversations with coworkers.   With the back to office trend in full swing after years of false starts, what does this mean for real estate?  Who will be the winners and losers in 2023? 3 traits that will quickly identify the best “seat” in real estate.


Back to office is actually happening

After years of false starts companies are finally getting serious about having “butts in the seats” at the physical office.  Office occupancy is now double what it was at the start of the year, but it is still at just 43% of what it was prior to the pandemic, said Mark Ein, chairman of property security management firm Kastle Systems.

In his dealings with clients, however, Ein said he sees a lot of companies pushing for more time in the office after Labor Day. So he expects that occupancy percentage to rise.

Indeed, as Covid becomes a more manageable risk, CEOs are eager to have more people back on site, said Johnny C. Taylor, Jr., president and CEO of the Society for Human Resource Management.

“We’re going to have a real push back to the office post-Labor Day,” said Jeff Blau, chief executive officer of landlord Related Cos., the developer behind Manhattan’s Hudson Yards project. “I think that you’ll see, certainly if we go into a bit of a recession or whatever we’re in now, as the leverage swings back to employers, they’ll use that leverage momentum to insist that people be back to the office.”

What happened with WFH during Covid?

During the pandemic, workers could work anywhere with the pay, perks, and benefits of large companies.  This greatly extended their buying power and in turn many branched out to smaller markets and put cities like Boise, ID.  Furthermore rural, exurban, and resort communities throughout the country became hot commodities driving real estate up to unsustainable levels.  As I predicted, this is a short term blip not a long term trend.

The poster child for this trend is Boise, ID where zoom workers flocked from higher priced coastal markets causing prices to double over a two year period.  That trend is 100% in reverse with prices predicted to drop 20% + as the market adjusts to the new normal.

What happens if employees refuse to return to the office? How will this impact real estate?

There will likely be a number of people that refuse to return to the office.  Currently employees have the upper hand, but this will not last.  Many employers have a contingency plan if this occurs:

Here is an excerpt from a recent CNN article quoting an HR executive: “Organizations have thought about, ‘What if 10% of employees refuse to do it? What do we do?'” Ultimately, that could mean a greater willingness to outsource jobs. “Once you make the case you can fully do it remotely, I can hire remotely. Why should I keep you?,” he said.

Furthermore as the job market shifts due to a slowdown in the economy, employees will be incentivized to come into the office to protect their job as out of sight is out of mind.  Long and short, the RTO will happen one way or another and real estate will be impacted as a result.


Who will be the real estate winners as workers go back to the office?

Fortune did an article on the most overvalued markets whereas smart asset did a similar study on the best markets for growth and stability (list below).  Here are the findings from Smart Asset’s top markets:

  1. Austin, TX
  2. Boulder, CO
  3. Midland, TX
  4. Rapid City, SD
  5. Ft Collins, CO
  6. Houston, TX
  7. Dallas, TX
  8. Odessa, TX
  9. Richland, WA
  10. San Angelo, TX

It is ironic that Ft. Collins and Boulder, CO are on the list of best places as Ft. Collins (just north of Boulder) is also on Fortune’s most “overvalued markets.  So, what three factors do the best markets have in common

  1. Ample and expanding employment opportunities: the top performing markets are all attracting new businesses. Take Austin or Boulder, every major tech company has set up offices in these locations which expands the number of highly paid employees.
  2. Economic growth: This goes hand in hand with employment as each of these markets continues to grow a diversified economy
  3. City/Suburban: The majority of markets are city/suburban market.  Take Boulder for example is for all intents and purposes a suburb of the Denver metro area.

*** note several of the TX cities included were driven by oil prices (midland, tx for example) which I don’t think is a sustainable model as these areas are heavily dependent on price swings of one commodity.

Who will be the real estate losers as workers go back to the office

Fortune did an analysis to gauge the most overvalued markets.  Here are their top 10:

  1. Boise, Idaho.
  2. Colorado Springs, Colorado.
  3. Las Vegas, Nevada.
  4. Coeur d’Alene, Idaho.
  5. Tampa, Florida.
  6. Atlanta, Georgia.
  7. Fort Collins, Colorado.
  8. Sherman, Texas.
  9. Jacksonville, Florida.
  10. Idaho Falls, Idaho.

I’m not 100% convinced in their rankings of markets as markets like Atlanta have become a hotbed for job growth with various industries but, the overall trend of this list where smaller markets that shot up during Covid will correct as the WFH trend reverses.  Regardless of what the Fortune article predicts here are some general themes that will highlight the riskiness of a market.

  1. Local employment cannot justify home prices: In places like Boise and more rural markets, as WFH reverses local employment cannot keep up with housing prices.  For example in Boise it is not like there are thousands of tech companies or finance companies hiring for particular skills. On the flip side, places like Atlanta have a plethora of employment opportunities.
  2. Smaller markets: There will be a migration back to metro areas or surrounding suburban areas as workers will need to be in closer proximity to their employers
  3. Resort markets: The resort markets like Coeur d’Alene, Idaho or Breckenridge, Colorado will come under pressure as workers cannot continue to live in these places as they are too far from the office.


The WFH “revolution” is rapidly coming to an end as companies across the economic spectrum announce plans to require “buts in the seats”.  There will be some initial push back from employees, but this trend of back to the office will continue to pick up steam as employers gain the upper hand as we enter an uncertain economy.  There will be winners and losers in real estate with many smaller rural markets undergoing huge price resets while more urban/suburban markets will outperform in the next cycle.

In the past two years, anybody could make money in real estate as everything was going up double digits.  Now the market has changed which will separate winners from losers and it will be increasingly important to choose your “seat” in real estate wisely.  If I were looking I would choose places like Boulder, CO  or Atlanta, GA, etc…


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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending.  Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors MagazineThe Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.


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