At first glance, it may seem as though workplace trends have little to do with changes in the real estate market. However, with a bit more consideration, it becomes clear why the two are, in fact, intertwined. As workers earn money or move to new cities for work, they’ll invest in and choose property differently, thus having a direct impact on real estate.
Let’s look at some of the current shifts in the workforce, and how they’re going to affect the housing market.
1. Some States’ Incomes Are Surging
States do all they can to attract businesses to set up shop within their borders, and when their tactics work, employment surges. On top of that, some states are just perennially popular with industry and have a regular influx of transplants looking for places to stay.
When employment rises, so does the amount of money flowing into the pockets of workers. As such, they’re more likely to play the real estate market, whether they’re buying homes or moving into a pricier, more desirable rental. For example, in Raleigh, North Carolina, personal income growth has increased, on average, by 12.5% between 2012 and 2017. By 2018, the city was named one of the country’s hottest real estate markets. It’s fair to assume that the increase in income played right into the hands of Raleigh’s real estate market.
2. Remote Working Is Less Popular
Another workforce trend that will affect the real estate market is that many companies are veering away from the remote-working trend. Instead, they want their employees in the office, where they can feel like they’re part of the team. It turns out that many employees feel the same — one of the biggest moving trends of 2018 comes from younger workers choosing to work on-site rather than feel more isolated in a home office.
This change might not cause as big a spike as, say, a new company moving to town and bringing new renters and homeowners into the fold. However, it’s something to be aware of — as staffers go back to the office, they might be in the market for a more conveniently located home.
3. Retirees Want Helpful Perks
The youngest members of the workforce aren’t the only ones who can create housing trends. Retirees make waves too, and that’s sure to continue as the Baby Boomer generation begins to reach the post-work stage of life. Currently, what seniors look for in a home is a place with perks that will make life as easy as possible for them. As such, assisted living is a big opportunity for developers, as it’s what the oldest generation wants.
To that end, amenities draw Baby Boomers into neighborhoods. It makes sense — places with on-site amenities bring entertainment, dining, fitness and more closer to home. Interestingly enough, the younger generation wants lots of amenities for their homes, should they be in the position to buy. Therefore, there’s a bit of competition between the two for some of the same houses.
4. Recent Grads Head to Cities
Another trend to note is that college graduates tend to prefer an urban lifestyle. Millennials and their successors, Generation Z, have made city living the norm for people their age. In 2016, a study from loan provider Credible revealed that Charlotte, Denver, Seattle, San Francisco, New York, Dallas, Portland, Oakland, and Washington, DC had the most out-of-state transplants.
In the same cities, the study noted, the job markets were thriving. For their generation, a move to a job center opened up more post-grad opportunities while still giving them the chance to live life in the city, as they imagined. Of course, many of these cities have notoriously high rent and home prices. While many millennials have the means to rent, their student loans and other costs prevent them from owning abodes of their own. This difficulty affects the real estate market in these areas too.
5. Entry-Level Homes Are in High Demand
In June of 2018, job opportunities increased in various sectors, including healthcare, manufacturing, and business services. With more openings, more Americans will obtain work — and rake in the salaries that come with it. Not only that, but as the unemployment rate declines, employers might also be able to offer their staffers better, more lucrative raises, which can help them make their way into the housing market.
This news is good news since the number of entry-level homes — priced at $200,000 or less — is on the decline. On the other hand, mid-range homes with price tags of around $350,000 are readily available. Raises, then, could be the push that some people need to skip their starter property and move into a bigger, long-term abode.
These are just five examples of how workforce and employment trends play into the real estate market. And while trends come and go, one thing is for sure — these two economic factors will always go hand-in-hand.
This article has been contributed by Holly Welles from The Estate Update.
