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The Great Resignation’s Effect on Florida Real Estate
February 22, 2022

The Great Resignation’s Effect on Florida Real Estate

by The CE Shop Team

With Record Rates of Resignation, Expect More Delays on New Housing

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. 

The largest spike in resignations came in September 2021, when 4.4 million workers quit their jobs, up from 4.3 million in August. 

Quit Rate by State Map
Source: WashingtonPost.com

Pamela Nabors, President and CEO of CareerSource Central Florida, observed that Floridians from all wage levels are deciding to leave their jobs. 

“Whenever there’s a disruption in the labor market like we’ve seen this last year, people reexamine what they’re doing in their career, what they want to do in their long-term career and what their goals are,” Nabors said in an interview with MyNews13.com.

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 the number of workers quitting continues to rise, so does the number of job opportunities. A more fitting name for this Great Resignation would be the Great Renegotiation as employers will need to step up and compete for workers.

“It is a sign of health that there are many companies that are looking for workers — that’s a great sign,” said Ben Ayers, senior economist at Nationwide, in an interview with The Washington Post. “The downside is there are many workers that won’t come back in. And long term, you can’t sustain a labor market that’s as tight as it is right now.”

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.

"Work from home is the holy grail at this point," said PeQueen. "And, we also see people really demanding from new jobs the ability to work from home. Work from home has become the new recruiting tool. If your job allows people the flexibility to work from home for a few days a week, you have a greater chance of filling that job."

The Great Resignation's Effect on Florida's Real Estate Market

How Is the Great Resignation Impacting Florida’s Real Estate Market?

In Florida, the resignation rate was 3.0% in August 2021, which was on par with the national average at the time.

While not directly related to real estate, the impact of Floridians leaving their jobs will have a ripple effect that extends into our industry. After all, workforce shortages are even more noticeable in regards to skilled building positions, and the lack of skilled workers in construction has been an issue before the Great Resignation of 2021. There were nearly 1,000 job openings in the construction field recorded since November 2020, and this number isn’t expected to decrease any time soon. By 2026, an estimated 29% of the current construction workforce in the U.S. will retire.

This labor shortage has hindered the construction industry, which will aggravate existing delays in residential and commercial construction of the state’s housing inventory. 

Not only do we expect further delays, but 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.

Change in Building Material Prices
Source: EyeOnHousing.org

Without workers, home construction will continue to be delayed, which will affect the state’s housing inventory. The demand for housing has already outpaced the available housing inventory, so home prices will only continue to rise; Florida’s median home value increased by 28.0% from December 2020 to December 2021. The current average home value in Florida is $348,732, slightly higher than the national average of $320,662. Though the average home value is on par with the national average, 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. 

How Is the Great Resignation Impacting Florida?

According to the U.S. Bureau of Labor Statistics, the unemployment rate in Florida was 4.8% in December 2021, boasting 609,000 job openings with 0.83 unemployed persons per job opening. 

The industries that employ the most Floridians are professional and business services; trade, transportation, and utilities; education and health services; leisure and hospitality; and construction. These industries were significant contributors to Florida’s job growth over the last year, helping the state’s job market grow by six times the national average from November 2020 to November 2021. 

A graph below illustrates the national quit rates by industry for November 2021:

Quit Rate by Industry Graph
Source: NevadaCurrent.com

The Great Resignation comes at a pivotal time as businesses scramble to regain the revenue they lost during the COVID-19 pandemic. Americans are beginning to spend on services again and traveling more outside of their home states.

Beyond the impact on the real estate market, a shifting labor force impacts the economy as a whole. A lower employment rate weakens the economic foundation of the state. Individuals without a job don’t have a steady income, after all, which leaves them living off their savings — a practice that isn’t sustainable long term. 

The CE Shop readers: How do you see the Great Resignation impacting your careers? Have any of your clients (current or previous) quit their jobs? Are agents within your sphere quitting in pursuit of other opportunities? Let us know in the comments below!

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