U.S. housing market prices are rising everywhere, but there has been a particularly large surge in demand in places like Texas and Florida. According to Redfin CEO Glenn Kelman, there are five people moving into Texas for every one person who leaves the state. In Florida, that ratio is 7:1.
The rise of remote work during the pandemic appears to be one reason why more affordable, low-tax states seem to be attracting more residents. The question is, what should companies navigating these waters keep in mind?
10 of 15: For low-tax states, 4 people move in for every 1 who leaves. For Texas, this ratio is 5:1; for Florida, 7:1. Cites & states have no leverage to raise taxes, after many promised new money for social justice; the federal government will have to fund long-term investments.
— Glenn Kelman (@glennkelman) May 25, 2021
Migration To More Affordable Cities
Kelman shared some wild data recently on Twitter about residential real estate across the country this year:
- In New York, inventory—that is, places available for sale—has increased by 28%. In San Francisco, it has increased by 77%. San Francisco hasn’t had an inventory increase this large since 2008.
- In 2020, new construction permits were down 13% in Washington D.C. and New York, 40% in L.A., 48% in Chicago, 50% in Seattle, and 79% in San Francisco. Meanwhile, permits were up 25% in Miami, 56% in Vegas, 96% in Greenville, S.C., 122% in Detroit, and 246% in Knoxville, Tenn.
This data indicates that demand for homes in lower-cost-of-living cities is gaining momentum, while people have less of an appetite for living in major cities that have historically been the most expensive.
U.S. Companies Returning To The Office
There are many companies that expect to return to the office shortly, according to the New York Times. They are still paying rent on expensive office spaces. But they are unsure exactly how long it will take to make the transition. Currently, only a quarter of U.S. workers are going into the office.
Many workers want to return to the office. They miss the collaboration and fun.
But the expectation among white-collar employees is that remote work will remain an option. Per Kelman, 90 percent of people earning $100,000+ per year expect to be able to work virtually. This doesn’t necessarily mean they expect to work remotely 100 percent of the time. It means they don’t want to be forced to work full-time from an office every day of the week.
Kelman says lenders are calling employers to confirm that homebuyers will have permission to work remotely when the pandemic ends.
Vying For Talent And Hybrid Work Options
The competition for the best talent is fierce right now, which is why salaries are rising so quickly. In this environment, any company that prohibits remote work is putting itself at a major disadvantage.
For companies that won’t allow remote work, not only is your pool of candidates smaller because you’ll be limited by geography, but you’ll limit your local talent pool because many people won’t consider a full-time office job.
Many companies are considering hybrid options, which give employees a more flexible schedule. They can work in the office part of the time and from home the rest of the time. This helps with company culture and collaboration while still preserving some of the conveniences of working from home.
Another concern for companies that will not allow remote work is that if your competition does allow it, you may have to offer higher compensation to woo candidates that are weighing multiple offers and value flexibility. Ultimately, even as the impact of the pandemic shrinks, employers will have to continue to be adaptable. There likely won’t be a “return to normal.”
If you’re a company that is enacting a remote work policy long-term, take a close look at compensation. Here are some guidelines to follow to calculate salary adjustments by market.
If you have questions about employee engagement or salary benchmarking, please feel free to reach out to us at email@example.com.