Now that location doesn't matter, should we rethink buying a house?
September 27, 2020 8:12 AM   Subscribe

We've been saving to buy a new house in DC. But if the "new normal" means working from anywhere, should we even bother?

My husband and I never had reason to doubt DC would be our home base for many years to come. A decade later, we still like the city and we're fortunate to have good, stable jobs here. So naturally we've been taking steps to buy a bigger, better home in our nation's capital.

Then COVID-19 hit and obviously changed everything. There is no end in sight to home-based work. The city feels unsafe and its high price tag, unwarranted. Our condo seems smaller than ever. Our friends have decamped to other areas and the ones who stayed behind are, like us, mostly steering clear of social interaction.

So this begs the question: now what?

Do we stay the course in hopes that most things will return to some sort of normal in 2-5 years? Or do we hold off on buying in DC for a couple years or for as long as this lasts to seize a once-in-a-century opportunity to test-drive other parts of the country or world (we have 4 passports between us)?
posted by lecorbeau to Work & Money (22 answers total) 9 users marked this as a favorite
if the "new normal" means working from anywhere, should we even bother?

I think this is a highly questionable assumption. There are a small number of companies - generally tech companies - that have indicated they will be allowing more broad work from home capabilities after the COVID pandemic. However, even in that section of the economy, very few companies are fully committing to a remote workforce indefinitely in the future. Here's a random CNN article giving an overview of companies, but note all the caveats. "as many as 50%", "some of its workforce", "most employees will work remotely", "non-production staff", "about 15% of Box's staff".

I'm not going to predict the future here (frankly, I have no idea what's going to happen). Let me give you an alternate scenario though - a few major tech companies who can afford risk allow remote work, but the majority of the economy doesn't because they simply can't afford to take the risk or the accounting complexities that come from having employees all around the world. Some number of people choose to work remotely, but the majority don't because they want the flexibility to change to companies that don't allow remote work. Over time, those who work from the office tend to have higher promotion rates and bonuses due to being more visible to their managers. As a result, those who work remotely slowly start to trickle back into the office at significant cost to them because they sold their house at a lower value and have to buy at a higher value and their compensation is lower because they were an invisible remote worker.

I'll note this possibility seems especially possible in DC, where a significant part of the local economy revolves around government employees/contractors working on classified information that can't legally be taken home.

to seize a once-in-a-century opportunity to test-drive other parts of the country or world

Without intend to dissuade you from doing this, be aware that there are very tricky legal issues with working in a different country from your job location. Many employers right now are simply glossing over those issues assuming the US government and foreign governments will be lenient to these workers. Are you prepared for the possibility of the foreign country demanding their share of employment taxes (because you were working there) and the US government demanding their share of employment taxes (because you were employed by a US corporation with a notional US working location)?
posted by saeculorum at 8:29 AM on September 27, 2020 [20 favorites]

My wife and I have also contemplated doing something like this: she's a teacher and could realistically work anywhere, I'm a tech guy whose company is going to be remote at least into next year. The way I see it, doing something like this would have to be a "it's easier to ask for forgiveness than permission" kind of thing--the company handbook is still written in pre-COVID language, so I'd never get the official OK to work remotely forever. So, instead, I wouldn't tell anyone at work that I'd moved until the the week before we're supposed to go back to the office, and then I'd send an anodyne email saying "Due to the circumstances of COVID, we had to move far away from the office. Having been a valuable member of team X for Y years, I'd love to stay on remotely." My wild-assed-guess is that it would have an 80% chance of working in my specific case.

Your mileage will obviously vary. This is a decision that's extremely specific to your work and personal circumstances, so I'm not sure a bunch of internet strangers can tell you if it's a good idea or not. If you think your friends are all going to flee the city, and your jobs won't care if you tell them you're going to work remote forever, go for it! (One caveat: moving somewhere far away from DC while you both have DC-based jobs is relatively easy; finding replacement DC jobs with DC salaries when your CV lists your address as Montana will be much harder) If one or both of those is unclear, though, you might want to hold off a little while until you see what life is going to look like after there's a vaccine.
posted by Mayor West at 8:48 AM on September 27, 2020 [1 favorite]

Assuming you're talking about buying property inside the city limits? In other words, are you ruling out everywhere inside the Beltway that isn't DC? There's a lot of nearby urban and suburban Maryland and Virginia to consider.

Or is your issue the more general lament of the post-Covid city dweller, living among empty office buildings whose tenants will never return, as those companies realize they needn't occupy such structures anymore since their entire workforce is working remotely? (This may not turn out to be true in DC, where the major employer is the US Government.)

Since your question specifically concerns buying real estate more than Where To Live, note that you should buy a property in order to sell it later at a profit, or for the rental income, both of which may occur if you buy in DC, or anywhere; no matter where you choose to live a few years after the sale.
posted by Rash at 8:49 AM on September 27, 2020

There is end in sight for for home-based work. Employers are mindful of huge long-term defects (professional development, training of recent graduates, team work, supervision, client development). Local governments have to pull back on restrictions on office occupancy because in many cases they're going to be bankrupt if they lose the related tax revenue.

Of the places where the end is closest, you'd have to rank DC at the top. A big swath of government never went to work from home, or quickly abandoned it. The lawyer/lobbyist/defense contractor/aerospace nexus is hugely dependent on in-person interactions. It's bumping along a bit as long as everyone is remote, but as soon as a few people start hosting cocktails party and doing lunch, everyone will very quickly fall into line or be left behind.

And all of this is without a vaccine. With a vaccine things are back to normal with furious speed.
posted by MattD at 8:58 AM on September 27, 2020 [5 favorites]

I am in a somewhat similar situation, having moved to Ottawa for work a few years ago. I finally accepted that I was staying here and sold my condo in Toronto, about two weeks before the last time I went to work in person. Now my agency is making an effort to figure out whether we can let a significant portion of our workforce go permanent remote and I am contemplating whether I would prefer to live in Vancouver where my family is or Toronto where my friends are. At the same time, a perfect condo that is in my price range in a building that I have long had my eyes on has just come on the market.

So I am torn on buying something that makes total sense for my 2019 life versus not knowing if my 2019 life is ever coming back. I think I am going to wait, under the assumption that eventually, I will have more clarity on what the future looks like and I won't necessarily want to have bought real estate in the interim. I just hope I don't get priced out of the market before that clarity comes.
posted by jacquilynne at 9:03 AM on September 27, 2020 [1 favorite]

While I think it's likely many businesses won't be able to resist offloading the cost of office space, heating and cooling and internet, coffee, desks and furniture, and even computers and phones to their employees forever (without raising their salaries!) I would not bet on it because it comes with a certain loss of control. Folks in my area are being called back to the office already, even though the spread is much worse now than when they were allowed/told to start WFH.

In my life when I have a big upheaval (moving, serious relationship ending or starting, etc) I choose to sit tight for a year and not make any big decisions, and see how it goes and how I feel as things settle. This is definitely one of those times for me. I guess "once in a century opportunity" and "reason to sit tight" are flip sides of the same coin.

I also don't feel like I know whether there will be a vaccine. If there is an effective one, it may be sold in a way that maximizes profit, which would mean the rich get it while the virus still spreads forever. It may be that most people won't trust it and won't want it. It may quit working after two months as the virus changes. I don't think basing life decisions on a guess about a future vaccine makes any sense at this point.
posted by fritley at 9:06 AM on September 27, 2020 [2 favorites]

One other issue could be the cost of building some equity (minus moving capital costs) over time vs the cost of spending on rent. The New York Times had a good calculator on this a few years back. Essentially, one can view property as a way of saving rent rather than anything long-term.
posted by ProfKepler at 9:08 AM on September 27, 2020

Our line of thinking is along ProfKepler and we live in a place where if the prices went any higher then we would be priced out so we’re buying instead of waiting to see how the pandemic changes things.
posted by pairofshades at 9:34 AM on September 27, 2020 [2 favorites]

I think this would be a great time to seriously sort your belongings down to only what you want to move twice in two years, sign a 1-year lease in a place you think might be a good candidate for settling in, and go try it out while you wait to see how things shake out. The only sure prediction right now is more uncertainty, and I wouldn't make any serious commitments at this point, but you can probably safely try it out for now and be better prepared to make a decision in a year or two.
posted by Lyn Never at 9:52 AM on September 27, 2020 [2 favorites]

I would put good money on most companies treating covid as a once in a century black swan event and mostly office work returning to the norm in two or three years. Mostly I'd expect an increase in flexibility where people work from home two days a week or something like that.

DC will be pretty much back to normal as well. Would you want to live in DC of 2019? Then you might want to stick around. Other cities or the burbs aren't going to have the same feel as living in DC proper. This may or may not be a good thing for you. If things like world class museums and the wide spread of interesting ethnic restaurants is part of what you like about DC, you're not going to find that in many places and they aren't necessarily cheaper than DC.

to seize a once-in-a-century opportunity to test-drive other parts of the country or world

Depending on what your jobs are, working remotely from another country may be forbidden, so I'd recommend having it in writing that it's allowed before planning on it. My company's fine with people working from anywhere in the US (as long as a time zone shift doesn't affect their ability to get work done with their team) but international is strictly forbidden and getting caught doing something like trying to use a VPN to conceal their location would be an immediately firable offense.

You could test drive other parts of the country but if you're being safe, it's not really going to give you a good feel for what normal life there is like.
posted by Candleman at 9:56 AM on September 27, 2020 [1 favorite]

be aware that there are very tricky legal issues with working in a different country from your job location

I just want to emphasize this point; in my (tech) world, plans are afoot to recategorize employees based on their remote location. So, by Date X (this varies by company) you can continue to work from home if you are in the same legal jurisdiction as an existing company office, and you will be reassigned to that office which, crucially, involves re-setting your salary to local norms.

...if you are not in a jurisdiction with a preexisting office, you will need to relocate to one of those jurisdictions or find employment elsewhere.

So, if you moved from California to, say, St. Louis then your legal location of employment will be shifted to St. Louis and you will now be paid on a St. Louis scale (ie., you get an immediate pay cut). If you are doing WFH in Thailand you will be given the chance to move back or quit, because the company does not want to deal with the complexities of having formal employees in Thailand.
posted by aramaic at 10:05 AM on September 27, 2020 [3 favorites]

To be clear, as others have mentioned, there are tax implications for both you AND the company if you’re working in a different state than your employer is located. While many people are temporarily moving elsewhere to work they still often need the pretense of working from where they were originally unless your company is really on board
posted by raccoon409 at 10:07 AM on September 27, 2020 [2 favorites]

Where I am living, it is a terrible time to be trying to buy a house (because lots of people are wanting to buy, but the supply of houses for sale has gone way down, leading to jumps in prices and bidding wars), and a great time to be selling (for all the same reasons). So maybe it is a wash for you if you are both selling and buying (assuming your old place is as desirable as your new place), but you will need to look at the specifics of your market and make sure you aren't just competing for a scarce resource against people who can make cash offers above the asking price.

And, I agree with the comments above about how not everyone is going to be able to work from home forever. My office is still mostly remote, though with people starting to trickle back to the office, but there is an expectation that people will stay regional (i.e., near enough to drive to the office for an important meeting, say) and the company is being careful not to make any promises about remote work continuing indefinitely.
posted by Dip Flash at 10:37 AM on September 27, 2020 [2 favorites]

I work at a big media company you have definitely heard of. We have been given direction that we will definitely work from home through EOY, and given a minimum of home office equipment to do that just recently because the plan is, long term, to expect employees to have a functioning office and home work space. They specifically did not let us take equipment from our office because they want our work stations to remain in tact so we can move to a hybrid model. My instinct is this will be very common, even among companies that maintain a long term flexible schedule.
posted by amycup at 11:34 AM on September 27, 2020

Fellow DC (well, NoVA) resident here. You didn't mention what line of work you're in, but unless you have ironclad proof that your employers are going to offer indefinite WFH, I wouldn't plan on this being long term. I work for the Feds and am already having to go in part-time, I can almost guarantee I'll be forced back to full-time in-person by summer 2021 Covid or no Covid. Some agencies are pressuring staff to come back even sooner. Even private-sector employers around here are starting to show signs of this - unless you work for a FAANG or equivalent and have a very WFH-friendly job, I wouldn't count on being able to stay remote forever. I think workplace flexibilities might improve, but I still think full-time remote will be the exception not the rule.

Working out of the US opens up a whole other can of worms. The long and short is that working overseas long-term for a US-based employer is a nightmare when it comes to tax compliance. Depending on the country you could be on the hook for local taxes, plus it could cause various issues from your employer's side as well. I've reasearched it extensively as my employer is strongly encouraging me to take an overseas assignment in the future (hopefully post-COVID) and WFH would be ideal for Mrs. photo guy. Unfortunately, my colleagues who have tried this have not had good experiences - many if not most major employers will drop you like a hot potato if you request to WFH overseas, because they don't want to deal with the legal headaches. So yeah, unless you're self-employed (or willing to become an independent contractor) I wouldn't count on being able to do this.
posted by photo guy at 11:53 AM on September 27, 2020

I don't even trust that FAANGs are going to stay remote forever. I can see hybrid models being popular for awhile, like splitting teams into workgroups that take turns coming into the office.

But I mean .. if you can swing an AirBnB somewhere nice and quiet to work remotely while you wait (and maybe hire a professional to rent out your condo) this would be a great time too.
posted by RobotVoodooPower at 12:19 PM on September 27, 2020

There are many countries you can work remotely from without incurring the wrath of either country's taxes. You will need some sort of permanent address in the US (preferably DC) where you can have someone send any important mail to you.

In Mexico and Central America you'll just have to leave the country for 24 hours every 3 months to renew your visa, and you can do this indefinitely and I know many people who do. SE Asia has several countries that allow this as well. You can live extremely well in these countries on an American salary.

Currently there are several Caribbean islands offering a 1 year visa to remote workers, which might also be something to consider.

If I was in your position, I would sell the house now while the market is hot, decamp somewhere for a couple years, and buy a new home later once the market and the remote work situation settles down.
posted by ananci at 12:21 PM on September 27, 2020

I assume that the pandemic will be over in six to twelve months. The economy will be in a recession. Housing prices will drop. This will be your chance to buy: 12 to 24 months from now. So. Please hold. My assumption is that city life and work in the office will be back to mostly precovid norms at this point.
posted by Kalmya at 5:36 PM on September 27, 2020

Best answer: I'd analyze it more like in terms of, what's your exit plan? If you buy a place but guess wrong, can you rent it out? Can you add enough value via minor construction or fixing up that even if you need to sell and prices overall fall by 10 percent, you'll still be in the black? Try to find a "no regrets" strategy.
posted by slidell at 9:53 PM on September 27, 2020 [1 favorite]

The city feels unsafe

FWIW, the crime data collected by the MPD mostly does not bear this out.

I spend a good amount of time out in DC west of the river late at night +, while there has definitely been an uptick in homelessness since COVID, it does not feel markedly more dangerous to me than recent years.
posted by ryanshepard at 4:40 AM on September 28, 2020 [2 favorites]

My office has already said we are all going back mid-next year. Our equipment has various spyware to prevent unauthorized use outside of the US, circumventing that (or really even attempting to use it outside the US since we are notified via compliance cources) is an immediately fire-able offense.

I use my equipment in a different state, and have never gotten grief for it, but there is no way I would move permanently without notifying - that's also a grounds for dismissal, and every co-worker who has gotten approved for it have been at the top of layoff/surplus lists.
posted by The_Vegetables at 9:01 AM on September 28, 2020 [1 favorite]

Best answer: I think you're asking a question that is very relevant and still in the earliest stages of being deliberated by our culture at large. I'm an epidemiologist, and I think that this will indeed be a transformative experience in how we manage work, how organizations manage work, and where those two sides push back and forth against each other.

What's lacking now, though, is case law. Any organization worth their salt has by now hired or consulted with public health analysts. Every employer is now facing the recognition that risk analysis for their employees is on their shoulders or, if they disagree with that statement, they have to modify contracts and policies to reflect that. Individuals, professional associations, and unions are going to respond to these new policies. Negotiations will be taking place--and are taking place--and, ultimately, there will be litigation from parties unwilling to subsume levels of risk that their employers require. And that's going to take some time to resolve!

In the meantime, orgs everywhere are cutting to the heart of this debate without really waiting for all that to get ironed out. My org, anecdotally, already *eliminated* the in-person office in my very expensive west coast city. We're all permanently remote workers, until the time comes that work travel can resume. It's a bit of an amazing feeling--there is so much opportunity in this period of time because we're in between the event that incited all this change (well, we're still in it) and the period when new routines are solidifying. So, yeah, now is the *ideal* time to be considering weird moves. The shackles that tied us to big cities may not be permanently broken, but they sure are at the moment. If you have a desire to explore elsewhere, and your field allows it, carpe diem.

I lived in DC for a long time and I love the place. Most of my close friends are still their. I do regulatory work, so it's been a natural place I've always wondered about moving back to. Prior to the pandemic, I was probably 75% sure I'd be moving to DC after more than a decade in California. I was lamenting it, though, for the same reasons you're wondering about this--am I really going to move, again, from one place that's eye-wateringly expensive to another?

But now, in lockdown, I've been thinking about so much more. My employer has essentially told us that all we need to be OK'ed to move anywhere is 1) solid internet and phone service and 2) an airport nearby for the if/when resumption of work travel. I'm even thinking about moving to the UK for 6 months to be closer to my oldest kid. And why not? My employer is fine with it, the visitor visa allows it, and I've got COVID-19 antibodies. I imagine that in 20 years I'd look back on this moment and kick myself for not giving this move a shot and seeing what comes of it.

You're the best judge of your circumstances and interests. But, yes, we're at the beginning of an upheaval that is so fresh that it hasn't been fully described or named or anything else. We're still in it. How do you *want* to take advantage of it?
posted by late afternoon dreaming hotel at 12:22 PM on September 28, 2020 [2 favorites]

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