By KIMBERLEY HAAS
As the COVID-19 pandemic continues and workers reevaluate their commitment to metropolitan life, lenders in smaller cities stand to benefit from what is being termed the “Great Resignation.”
It is estimated that about 4.4 million Americans quit their jobs in September after months of dramatic departure numbers, which means those employees are looking for and taking new jobs, often choosing to live in a different location if they have the option of working remotely.
Since 87% of employees say they would like to work remotely at least one day a week, and one in three workers would not want to work for an employer that required them to be onsite full time, potential homebuyers are taking these factors into consideration as they pack up their offices and plan to purchase a home that fits all of their new needs.
Lenders should take notice. A report published last week by Realtor.com highlights the top 10 cities job seekers are flocking to.
Using data from LinkedIn, which has information on more than 180 million members in the United States, the migration rate was calculated to create the list Realtor.com published.
Cities making the list were Austin, Texas; Sarasota, Florida; Myrtle Beach, South Carolina; Asheville, North Carolina; Nashville, Tennessee; Boise, Idaho; Huntsville, Alabama; Denver, Colorado; Portland, Maine; and Phoenix, Arizona.
Lenders should also note that employees between the ages of 30 and 45 have had the greatest increase in resignation rates, increasing more than 20 percent from 2020 to 2021.
This is a key demographic for those who offer mortgages because people in that age range typically want a stable home for their spouses and children.
What does this mean for sellers?
The Great Resignation could also help home sellers in many markets. CNN Business reported this month that the median price of single-family existing homes rose in 99% of the 183 markets tracked by employees at the National Association of Realtors.
According to leaders at the NAR, the typical home spent just one week on the market before going under contract between July 2020 and June 2021.
David Bahnsen is the founder and managing partner of The Bahnsen Group. He said that quality of life factors, which include jobs, taxes, regulations, and wages, are, indeed, pushing up demand in those cities listed, and higher demand means higher prices.
“You combine that with the accumulated equity people departing for those cities often bring to the table and it is a seller’s market in every way,” Bahnsen said in an email on Monday.
What does this mean for taxpayers in these cities?
Taxpayers in the listed cities may roll their eyes at the idea of more children to educate in the school systems, but a senior demographer at the Carsey School of Public Policy at the University of New Hampshire says fertility rates are at an all-time low.
Kenneth Johnson has been tracking these numbers, which show that in 2020 the United States had the fewest births in 40 years.
Johnson said in an email on Monday that there are fewer births each year even though the number of women of child-bearing age is greater now than it was a decade ago.
“Even before COVID began to have an impact, fertility rates were hitting record lows in each of the past several years. The preliminary data on the impact of COVID suggest that it diminished births even more—the fertility rate was 4% lower in 2020 than in 2019. Births diminished another 5% in the first three months of 2021 compared to 2020,” Johnson said.
Johnson estimates the cumulative impact of these fertility rate declines, which began during the Great Recession and continued over the past 13 years, adds up to 7.6 million fewer births.
“What implication does the Great Resignation have for future fertility? Does the Great Resignation reflect changes in societal attitudes? I really think it is far too early to tell. If it does reflect a fundamental change in attitudes, what impact will that have on attitudes about the importance of children and family formation? Certainly, children and family formation are big factors in home purchases,” Johnson said.
How long will the Great Resignation last?
Moody’s Analytics Chief Economist Mark Zandi said in October that the worst of the labor shortage has passed, according to Fortune.
Washington Examiner Economics Reporter Zachary Halaschak wrote last week that the number of new applications for unemployment benefits plummeted to 199,000, the lowest level for initial claims since 1969.