The Great Resignation’s Effect on Florida Real Estate
The Great Resignation’s impact on home construction means that the value of Florida residents’ homes could see another double-digit price rate increase in 2022, according to a recent report from the CE shop: The Great Resignation’s Effect on Florida Real Estate.
This impact comes on top of a 70% decrease in inventory since the start of the pandemic:
The Great Resignation — the name given to the enormous wave of workers quitting their jobs over the past year — is making headlines nationwide around 33 million Americans have quit their jobs since the spring of 2021.
Why Are Americans Leaving Their Jobs?
“The catalyst for it all seems to have been the quarantine and the lockdown where people really reevaluated what they were doing, and what they want to do with the rest of their lives,” said economist Mike PeQueen in an interview with MSN.
There are a variety of factors pushing workers to walk away:
• For workers who are parents, childcare can be hard to find and expensive. It’s been difficult for parents to find childcare, as unpredictable school closings persist during the pandemic.
• Generational workers are impacting employment numbers. Older, sometimes immunocompromised folks face a higher risk regarding COVID-19, which has pushed many of these individuals to retire early and permanently leave the workforce.
• Saving money continues to be a struggle, particularly for employees making minimum wage. On average, Americans with incomes in the bottom 60% received $3,450 from stimulus payments. Some workers were able to allocate this money to savings, allowing them the luxury of being more particular about their employment. That could mean using the money to leave jobs that were unfulfilling or undervaluing their skill sets.
• Leverage is the biggest factor. The growing desperation of employers has caused them to offer more generous wages and benefits to new workers, prompting many to quit their previous lower-paying jobs in favor of something better.
As workers negotiate for either better conditions in their current jobs or leave to find greener pastures, one sure bet for employers is to offer remote working conditions whenever possible. Remote work quickly became the norm for many workers and is playing a factor in Americans’ decisions about their current jobs and where they’d like to work next.
Workforce shortages are even more noticeable in regards to skilled building positions, and the lack of skilled workers in construction. The labor shortage has also spurred higher costs for hiring builders on top of the staggering cost of construction resources. According to the National Association of Home Builders, lumber prices are about to go up, pushing the cost of lumber for building a new single-family home up almost $20,000.
One factor not mentioned in this article is the impact of rising rents, which increased around 30% in 2021. While strong demand, particularly from cash buyers relocating to Florida, continues to meet drastically reduced supply, it is hard to argue against the forecast of a double-digit increase in prices in 2022.
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Andrew Oliver, M.B.E., M.B.A.
Real Estate Advisor
800 Laurel Oak Drive, Suite 400, Naples, FL 34108
Licensed in Massachusetts