Real estate is inherently local, with property values closely tied to the economic drivers and characteristics of specific regions. While understanding the national housing price forecast for 2025 provides valuable context, savvy investors should focus on identifying cities and states with stronger growth potential. After all, outperforming the market is just as important as generating returns.
One compelling area to watch is cities experiencing a higher percentage of workers returning to the office. Since 2020, millions of workers reaped the benefits of work-from-home policies, but there are growing signs that this trend is reversing.
As more companies push for in-office attendance, cities with robust office-based economies and increasing workplace reoccupancy rates could see a surge in housing demand. This shift may lead to greater property price appreciation in these areas as workers relocate closer to their offices, revitalizing urban centers.
Investing In Cities That Are Returning To The Office
Much like “Zoom Cities” such as Boise, Idaho, thrived during the remote-work boom, cities seeing a shift back to in-office work are likely to experience housing demand spikes. While most workers prefer flexibility, companies pushing for a return to the office will drive demand in urban areas.
Recent data shows the biggest drops in fully remote workers are in metro areas like:
- San Jose-Sunnyvale-Santa Clara (35% fully remote down to 16% in 2023 and going lower)
- San Francisco-Oakland-Berkeley (35% -> 21%)
- New York-Newark-Jersey City (23% -> 14%)
- Boston-Cambridge-Newton (27% -> 18%)
- Seattle-Tacoma-Bellevue (31% -> 20%)
- Los Angeles-Long Beach-Anaheim (21% -> 15%)
- Washington, D.C.-Arlington (33% -> 22%)
Take a look at this more comprehensive chart compiled by Lance Lampert, writer of the ResiClub newsletter.
Common Theme Among Cities with the Greatest Return-to-Office Shifts
A key characteristic of cities experiencing the strongest return-to-office trends is their inherent difficulty in adding new housing supply. Years of undersupply have primed these cities for heightened competition, likely leading to bidding wars that drive up both rents and property prices. As more workers return, demand will rise for both residential and commercial properties, making these cities hotspots for real estate activity.
The transition won’t create an immediate boom. Initially, existing inventory will be absorbed as migrants and office tenants adjust to shifting dynamics. However, once return-to-office norms stabilize, the pressure on limited housing stock is expected to push prices higher. The interplay of strict land-use regulations and low loan-to-value ratios amplifies this effect.
San Francisco Office Making A Comeback
Take San Francisco as an example. Building new homes is notoriously difficult due to stringent regulations and high construction costs. Securing a building permit often takes years, assuming the property is even zoned for development. Then you’ve got to build the darn structure! I tried getting a permit to build an ADU in the past and gave up after six months.
With tech companies thriving and enforcing hybrid work policies requiring at least three in-office days, housing demand is intensifying in tech hubs like San Francisco, San Jose, and surrounding areas.
The ongoing bull market is driving significant wealth creation, which not only attracts more workers to these areas but also channels substantial company stock capital into real estate investments.
The only way to truly enjoy your stock gains is to use them to buy something meaningful or fulfilling. This dual effect—rising demand from employees and heightened purchasing power from equity gains—further amplifies competition for housing in these high-growth regions.
The Return Of Big City Real Estate
Like so many things – politics, social justice issues, education trends, health trends – the pendulum tends to swing from one extreme to another. The Sunbelt and Midwest regions had their time in the sun from 2017-2022. Now, cities like Austin are dealing with a hangover as builders work through their inventory. Perhaps in 2026 or 2027, it will be boom times for them once again due to a then undersupply of housing.
But for next several years, I suspect big city real estate will start outperforming due to return to work policies. So if you own property in one of the cities with the greatest return to office shifts, I'd hold on. If you've been thinking about building a rental property portfolio, you may want to buy before a gigantic liquidity wave of tech and AI companies enriches tens of thousands of employees.
And if you've been a long-time landlord who is looking to simplify life and earn more pure passive income, your time to take advantage of strength and sell may be coming.
Employees And Employers Are Rational Actors
People who want to get paid and promoted will be complying with their company's return to office policies. And the vast majority of workers want to get paid and promoted.
Meanwhile, companies with senior management that once championed work-from-home policies are starting to recognize that fostering in-person collaboration is essential to stay competitive. They’re driven by the allure of mega-million-dollar windfalls. That’s capitalism in action!
Yes, it is sad that the good times are over for many who have to return to the office. But all good things must come to an end. At the very least, you can invest in companies that are taking work more seriously to drive earnings and returns for you. Then you can also invest in real estate in cities where those companies are based.
For lifestyle purposes, aim to work for companies that let you enjoy perks like playing pickleball in the middle of the day while still getting paid. These opportunities will become increasingly rare, so if you find one, value it as much as you would an honest auto mechanic or a dependable handyman.
Retirees Benefit From Return To Office As Well
For retirees, life gets a bit more peaceful. Booking courts, catching matinees, and strolling through parks will likely become easier without the same weekday crowds. Errands will take less time, and your favorite spots will feel less congested.
As millions return to fluorescent-lit offices in pursuit of more money, your decision to step away from the grind will pay off further—granting you greater serenity and freedom.
Psychologically, there’s a reassuring sense of satisfaction knowing that the employees in your investment companies are putting in more effort on your behalf. While investment returns are never guaranteed, it’s comforting to feel that the odds of maintaining a comfortable retirement are improving.
What a gift it is to see employees returning to the office and striving for growth once again!
Readers, what are your thoughts on investing in real estate in cities where employees are returning to the office in significant numbers? Do you believe big-city real estate is poised to outperform smaller markets that benefited from the work-from-home trend? Share your insights below!
Invest In Real Estate Strategically
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Interesting hypothesis, and big cities may see an increase in housing but I’d caution to say correlation is causation. I sense much of the remote workers are already hybrid. The in office policy is just a shift of 3 days to 5, but workers already live in the city where they work and won’t be moving due to policy.
The term “remote work” is a bit of a misnomer as few companies are or had gone fully remote. The shift to hybrid work began before Covid and is likely now a permanent fixture in many U.S. businesses. A lot of it is being smart about capital allocation. Companies began accelerating the use of “hoteling” a decade or so ago as a way to more efficiently utilize office space. Collaboration and huddle spaces began to replace offices and cubicles. The use of technology also reduced the need for physical space. You no longer needed rows and rows of file cabinets or permanent workstations. An employee’s “office” was contained on their laptop and went home with them every night. Your office phone worked wherever you happened to be that day. All of this speaks to a need for less office space. And Covid confirmed that companies can be just as productive (profitable) even if employees weren’t coming to a physical office every day of the week. When you take all of that into consideration it’s not surprising that vacancy rates have remained high. Outside of payroll, the investment is physical offices is one of a companies largest capital expenses. If they can find a way to utilize these spaces more efficiently, while maintaining profitability, they will absolutely do so.
I feel very blessed about people who decided to work from home. And made it much easier for me to get promoted much quicker because I developed a really good relationship with my bosses.
I am two levels ahead of my peers who I’ve been working from home. As a result, I can save an invest much more and retire sooner.
Congrats Cobb. As a fully remote worker, I feel blessed to be able to use my downtime to
play pickleballdo a second remote job. This has enabled me to double my pay and not be at the mercy of a single employer. I am reaching retirement 2x faster.That’s really impressive. That seems like living the dream, essentially double the salary. Any risk/downside?
It’s a growing movement born out of the pandemic. Check out “over employed” site. Lots of people are double timing b/c they can and a lot of corporations simply have no idea.
Sam,
What is the reasoning for using an indirect measure (remote workers) vs vacancy rates (direct measure). For example, here on the East coast, NYC office vacancy rates remain double pre pandemic rates (2024)
Manhattan’s[1]office vacancy rate has more than doubled from under 8% at the start of the pandemic to 16% as of April 30th
https://comptroller.nyc.gov/reports/spotlight-new-york-citys-office-market/#:~:text=Here%2C%20vacancy%20rates%20have%20also,million%20SF%20of%20vacant%20space.
Easier to conceptualize
Your articles are always insightful and informative. You have a brand of excellence and it’s clear that you do your research. Thank you.
thanks Sams.. your articles are always helpful. are you aware of fundrise fund which specially invest in RTO Cities? or any public REITs you aware of?
The difficulty to build in these big cities certainly is a huge factor for price appreciation. They go through less of a boom and bust. And when economic times are really good, the sudden influx of labor demand can really push up prices in a hurry.
I am much more hesitant of investing in cities where you can build an endless amount of supply.
Thanks for sharing those stats of return to work by metro. Super insightful. I completely understand the shift back to in office work. I used to giddily abuse my ability to work from home and I know thousands of other workers have to. So of course employers want their workers to show up where they can be watched over and be more involved. Face to face interaction isn’t always fun or pleasant but it definitely leads to better collaboration and productivity. And I can see how the return to in office work can support an increase in metro real estate demand. They go hand in hand.