How The Massive Labor Shortage Is Affecting Real Estate
Q: It’s been really hard for us to staff people at our restaurant for quite a while. Has the labor shortage affected real estate? Keith, Point Pleasant, NJ
A: Unfortunately there are many industries that have more unfilled job openings than unemployed workers with experience looking for work. With respect to residential real estate, the labor shortage has affected home construction and home prices by 1) increasing construction time to complete newly constructed houses (which in turn lowers housing supply which results in higher home prices). 2) Labor shortages also have increased the price of available labor and therefore increased the cost to build which de-incentivizes builders, further lowers housing supply and also increases home prices. In addition, 3) without enough affordable housing available, the homelessness rate increases–the rate of homelessness has gone up 2 percent in the last year. Thanks for your question, Keith.
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