Most of us, especially in the real estate investing world, are feeling what is being referred to as the Covid aftermath “Great Resignation.” So what is really going on? How are so many people without jobs for so long? Where did all the workers go and more importantly what can we do about it?
As you can see from the graph below, from the Bureau of Labor Statistics, the percentage of people leaving the labor workforce has been consistently rising for over a decade. Rather than being caused by the Covid spurred increase in unemployment benefits that we have all been complaining about, this has been a steady trend, caused by multiple factors that have been building over time.
In reality, the aging of America has caused this decline in workers and is more of a “Great Retirement.” Baby boomers are increasingly reaching retirement age (now 58-76 years old) and were spurred to retirement in 2021 at a record rate. Retirees attribute this to their financial stability (all-time high real estate values and the elevated stock market), the reprioritization of their time with the country in crisis, and the risk of contracting Covid in the workplace.
Another major factor is the slowing of US population growth. The Bureau of Labor Statistics reports that this is due to lower birth rates, lower life expectancy, and lower immigration rates. The population from 2000-2001 grew by only 0.1%, the lowest rate since the nation’s founding.
Why are we feeling the pain of this so significantly now? As boomers retire, there is a significant reshuffling in the workforce and the pandemic has allowed people more time to consider their career choices. Another major factor is that the work from home opportunities are here to stay so many people are relocating to more desirable, less populated communities. So we are not only feeling the pain of a decrease in the incoming workforce population and a major exodus of retiring workers, but also a major reshuffling of the existing working population.
This is definitely a temporary problem as a recent paper by economists at MIT and Boston University projected that robots could replace as many as 2 million more workers in manufacturing alone by 2025. But for now, how do we gain and retain this smaller pool of employees? Most employers are going about this the wrong way due to a lack of understanding of why people are quitting and moving on to other opportunities. Contrary to a common belief, the driving force is not related to money. An analysis published in the MIT Sloan Management Review found that people reported work culture was 10x more important than pay! The most common reasons for quitting were feeling disrespected, being managed by supervisors with low integrity, little or no opportunity for advancement and being overworked and under appreciated. This comes down to a lack of a principle based culture. This is something we can all improve on and benefit from. One of the best books I’ve found on this topic is Steven Covey’s, Principle Centered Leadership. Ironically, culture is not at the top of the list for workers looking for new jobs. The Citrix’s Work 2035 project, a recent, year-long study of thousands of job seekers from around the country, reported that flexibility in hours and location was top priority. Thriving during this transition is going to have to involve a combination of offering work from home options, flexible schedules, and treating people with dignity and respect.
Your Realtor should not only be someone you trust in knowing the real estate market but also in wealth building, preservation and management. At the Zager Group, we don’t take this responsibility lightly. We are committed to continuously learning and sharing about making the wisest choices for our future and the future of our friends and clients. We pride ourselves in being experts in this field. If someone you care about needs guidance or recommendations, please share our contact information as we are honored to be able to help!
Total Number of Workers Who Lost Jobs
As you can see from the above information from the Bureau of Labor Statistics, the percentage of people leaving the labor workforce has been steadily rising for over a decade.
Our Local Market
We had 3 new condos and 4 new homes come onto the market this week. We currently have 15 active condos ranging from $495,000 to $1,250,000; the median condo price is $775,000. We currently have 38 active homes on the East Shore ranging from $999,000 to $35,000,000 with the median price of $2,775,000. We are starting to see a pick up in listing appointments which will hopefully increase our inventory heading into summer. Here’s a year to date local update:
Local East Shore Lake Tahoe, Nevada Stats – All Year to Date
- Total Sales YTD: Condos: 44 | Homes: 37
- The Median Sales Price: Condos: $702,500 | Homes: $1,800,000
- Number of Sales Over $1 Million: Condos: 11 = 25% | Homes: 33 = 89%
- The Highest Priced Sale: Condos: $5,665,500 (Tahoe Beach Club) | Homes: $32,000,000
- Median Price Per Square Foot: Condos: $541.62 | Homes: $628.93
- Median Days on the Market: Condos: 82 | Homes: 91
If you would like to receive our in-depth market update or would like an evaluation of your property’s value we would love to hear from you! We’ve put together some information below that we think you’ll find useful. If you have anything you want to share with our community please let us know so that it can be included in future newsletters.
Thank you!
Craig Zager & The Zager Group