A Look Back at the Unexpected Real Estate Trends and the Future’s Potential Path
In June 2021, I shared my thoughts on the potential lasting impacts of the pandemic on inflation, wages, and work-from-home (WFH) trends. I was updating this site today, came across that post, and thought I’d dive into what’s taken place since then.
Inflation and Wages:
My thoughts about the permanence of inflation seem to have held up, with wages being a primary driver. Workers have demanded higher pay, partly due to the increased cost of living. While the Biden administration has not officially raised the minimum wage to $15/hr, many companies have chosen to increase their minimum wage to attract and retain employees. As of today, there are 1.6 jobs for every unemployed person, and the labor market is strong.
Work From Home:
The WFH trend has become a lasting change in the way people work, which is something I felt would become much more common. Companies like Microsoft, Twitter, Square, Spotify, Shopify, and Amazon have embraced the shift, offering employees the option to work from home, either full-time or as part of a hybrid model. The story I shared about Jennifer’s clients moving back to San Angelo with their newly gained wealth has become a common one, as many professionals reconsider their priorities and choose a lifestyle that better aligns with their values.
Some companies are now pushing to reverse this three year trend. It will be interesting to see how this shakes out. The big question on my mind is whether or not the WFH people will advance in their careers as rapidly as in office personnel. I also wonder if those that are “not needed in the office” to work will eventually be replaced by job cuts, or even the evolving AI trends.
Side note : The shell of this article was written with ChaptGPT 4 – and I’m just making some modifications to it to make sure it’s accurate, in my tone, and adding some more information that I think is relevant.
Real Estate Market:
The statement “replacement cost is the new low comp” was right on in my opinion. The real estate market has not experienced a crash, and property values continue to rise in many places. Some markets have given back about 20% of value, but I haven’t found one that’s gone below what they were 24 months ago. Seems like some places have had to give up a lot of what they got in the “Zoom Boom”, but affordable housing remains in high demand as well as short supply! As a real estate investor, understanding and adapting to these market shifts remains crucial for success.
As we move forward, embracing these new realities is essential for both investors and professionals in all industries. By staying informed and adaptable, we can better navigate the ongoing changes and continue to thrive in this ever-evolving landscape.