Before he joined the job-listing site Indeed as chief economist, Jed Kolko held a similar role at online real estate marketplace Trulia.
That puts him in a unique position to understand the relationship between the labor market and housing market. When he thinks What the Future, he’s looking at how remote work might be the stickiest of our new pandemic habits.
Matt Carmichael: In the early days of the pandemic, there were breathless trend pieces about the death of major cities. Our data shows that might be overblown, but what is yours showing?
Jed Kolko: The really solid migration data tends to come out with a lag. We actually won’t know definitively whether there are shifts in where people live for some time. Short-term evidence comes from housing pricing and rent data. Expensive places might become a little bit more affordable. Rather than seeing a massive dip in the population of big cities, we may see a shift in the competition.
Carmichael: Do you think full-time remote work will stick after the pandemic? What are you seeing from employers?
Kolko: I think probably for some companies for at least some roles. But even being able to work from home almost all the time, say 90% of the time, is still very different from being able to work remotely all the time. The 90% home worker who is still going to the office once a week needs to be within a long-commuting distance of their office. It may mean moving a little bit farther out to a more affordable suburb with a longer commute and cheaper real estate. But that’s not the same thing as being able to move anywhere. Even on the same team, people may end up having very different patterns in how much they work from home and come into the office.
Carmichael: We need our houses to do more, whether that means we move to larger spaces or reconfigure the spaces we’re in.
Kolko: Yeah, one of the sectors that has done pretty well in this pandemic has been construction and retail connected to home improvement. A lot of the attention has been around anecdotes of people moving to different places, maybe temporarily, maybe permanently. But people are making investments in their homes, from getting a more comfortable desk or ergonomic chair, to buying exercise equipment, to bigger home improvements to make it more possible to work from home. And the changes aren’t just related to working from home.
Carmichael: That’s certainly a premise of this issue, that how we live impacts how we spend—and that those patterns are changing in these times.
Kolko: People have been forced into new habits; eating at home more and cooking instead of eating out as much, exercising at home more rather than going to the gym. It’s those changes that will be less widespread and permanent. There will almost certainly be more remote work after the pandemic than before. It’s less clear whether there’ll be a permanent shift toward cooking more at home, exercising at home and insourcing more of your entertainment.
Carmichael: What does this all bode for younger workers, especially?
Kolko: Remote work may be less appealing for younger workers than for older workers. The advantages of in-person offices may be greater for people who are starting out in their careers, still getting to know the organizations and building their professional networks.
Carmichael: If younger workers are in more urban areas to some degree and renting more to some degree, their housing needs become a little bit different too, right?
Kolko: This may be an example of a trend that was already underway. A big demographic shift in cities during the 2010s has been the shift toward younger urban populations. That’s more because other people were less likely to live in cities rather than an increase in young people in cities. But it gives an overall shift in the composition toward younger urban residents.
Carmichael: Are you seeing in job listings on Indeed that employers are shifting toward remote being allowable?
Kolko: We’re still very much in the middle of the pandemic. Some of that may still be temporary rather than permanent. The Bureau of Labor Statistics is now asking people every month whether they’re working from home and the share has fallen since May  when they started asking. So some of the increasing remote work mentioned in job postings may be temporary.
Carmichael: What is your hunch for how this all plays out in the next three years or so?
Kolko: My hunch is that more people will be working remotely than before the pandemic. That will lead to somewhat of a shift in housing prices and rents as some of the most expensive neighborhoods may become somewhat more affordable. That will attract new people to big cities who want to be in big cities for reasons other than being close to the office. The biggest questions to me are not only about remote work, but also about how spending patterns change and whether we see a sustained swing away from meeting at restaurants, going to movies and live performances, to cooking at home and watching entertainment on screens instead, or whether the demand for some of those amenities that are a huge part of the pleasure of being in cities bounces back.