I just read that 1 Out of 9 Jobs in Colorado are tied to Real Estate.
The Colorado Association of Realtors® released a report in October of this year (2007) that tracked how the Colorado real estate industry impacts the local economy. These results were tracked from Grand Junction to Pueblo, and included the economic impact of real estate in Colorado Springs. They found that approximately 10.8% of the entire region’s earnings were tied (directly or indirectly) to the Real Estate Industry.
Ultimately, the Colorado real estate industry is larger than the Colorado Tourism industry … and that is even considering that we have some of the BEST Winter AND Summer destinations.
Why is this interesting, especially if I do not live in Colorado?
First, this finding will be relatively true regardless of where you live.
Second, with the recent rising foreclosures nationwide and countless mortgage companies closing their doors, this means that there is a huge chunk of people (in addition to the affected home owners) that are going to be directly affected by the shifting real estate market.
In fact, when the sub-prime market collapsed this last summer, about 130,000 relatively high paying finance-related jobs were lost nationwide.
Now, you have to think about this… Not only are real estate agents, lenders and title/escrow companies affected, but so are inspectors, appraisers, landscapers, contractors and other service providers that depend on the real estate and loan market to make a living.
For example: If a home owner wanted to finish out their basement, they would probably hire an electrician, plumber, contractor, drywall installer, painter, carpet installer, etc., and eventually need an inspector. In many cases, the homeowner would take out a home loan (2nd, HELOC…) to get this job done. To do this, they would need the help of a lender (and possibly their assistant) an underwriter and a title/escrow company (and all the people involved on that end). With the restructuring of the loan industry, this homeowner may not be able to get a loan, and therefore could not finish their basement … creating one LESS job for all those people who would have been needed to get that job done.
This example is even in addition to the business that is “lost” when fewer new homes are being built and fewer resale homes are being sold.
And what about super-auxiliary businesses that will be affected? The CAR report also brought up the impact on furniture stores, electronics and appliance stores…
The effects are far reaching, but not bad.
“Not bad? Not bad, you say? What is wrong with you, Mariana? Have you been reading The Secret too many times again? … ’cause you are off your rocker.”
I know you are thinking it, and you may have even made that weird, wincing “I don’t get you” face while you read it. That’s okay. You just need to think it through with me, here… I am not saying that this “shift” is not going to be DIFFICULT for MANY people. But DIFFICULT is not the same as BAD.
The real estate market IS shifting, and not only do I – the Colorado Springs Realtor® need to adjust how I do business, but this adjustment needs to transcend to MANY different professions. This is opening up a whole new opportunity to strengthen my business alliances. If I can help MY landscaper and MY lender and MY roofer and MY carpet installer figure out how to transition along with this market, I know that, in turn, they will help me as well.
So, yes. This shifting real estate market DOES reach further than JUST real estate, and so should you.
How small businesses can keep up with the changing workforce
(ECONOMIC) Trade schools are booming as career outlook grows. College enrollment is down. The workforce is changing. How can small business keep up?
College enrollment has dropped off by three million in the last decade, with a drop-off of one million due in the last several years as a direct side effect of the Covid-19 pandemic. This phenomenon clearly does not bode well for the future of the United States’ economy and workforce, with students who attend low-income schools and come from low-income families being the most affected. These changes are disproportionately affecting students from low-income schools and families, the very people who need higher education the most, and are erasing much of the work done in the last decade to help close the income and race gap between students, colleges, and socioeconomic backgrounds.
Enrollment in trade schools is skyrocketing.
Recently, trade schools have seen a 40% bump in enrollment across the board. Many students are enticed by the fact that trade schools are affordable and offer a quick turnaround, with students paying $16,000 or less for their program, and their training taking a year or less to complete. Beyond that, those who complete trade school is all but guaranteed a job on graduation day. Their earning potential is often two or even three times higher than the initial cost of attending the program. As many have found, the same cannot always be said about those who pursue a college education.
While the average cost of college at an in-state and public institution hovers at around $28,775 per year (according to Forbes) and takes an average of four years to complete means that trade students have a cheaper educational cost, (between $16,000 to $33,000 for the entire program, or about equal to just one year of a public college tuition) can get work in their field more quickly, and can usually make more than their educational costs in their first year on the job. Tradespeople make an average of $54,000 fresh out of trade school, which rivals the role average college student’s first salary of $55,000. It’s no wonder so many people are choosing to forgo a formal education for trade school!
The almost insurmountable cost of college combined with ever-growing inflation and a lengthy list of requirements just to get a post-college job, all for a low salary and with students having hefty loans to pay back, also play a key role in the downturn in the popularity of college.
The implication of fewer college-educated people, however, means that over time, the United States as a whole could face an economic downturn, as it gives rise to many more blue-collar workers. This can irrevocably alter the makeup of the workforce. Despite current unemployment rates being among the lowest they’ve ever been, the American people are already starting to see a shift in the labor market.
Already, we see a strain in the labor market when 25% of skilled workers in the U.S. exited the workforce following the Covid-19 pandemic. The economy has become so highly specialized that if the U.S. were to keep up the trend of losing college-educated workers, there could irreversible damage to the United States’ economy, deepening the ever-growing divide between the middle class and the working class, further reducing the ability to affect the global economy, knocking the United States out of the classification of a “global superpower.” To make matters worse, much of the United States labor pool is outsourced, and we are seeing the rise of artificial intelligence and robotics taking over many jobs, especially minimum wage jobs. While none of these factors alone vastly affect the U.S. labor market, this is only the tip of the iceberg.
So what can employers do when the makeup of the workforce starts to shift?
Employers could shift the focus on the years of experience rather than the type of education the potential employees have, as well as offering more extensive on-the-job training, which is already commonplace in some industries. Even for those with a college education, the requirements for entry-level jobs seldom match the salary, with many employers requiring a four-year degree, two or more years of experience, and fluency in different programs which vary from company to company. Employers, if possible, need to offer higher salaries with fewer requirements, as many young people are finding the pursuit of college, plus the various other requirements just to be considered for a barely above minimum wage job, while they’re drowning in student debt fruitless, so they forgo college altogether.
A post-pandemic society looks vastly different, and employers must adapt to keep up.
Boomers retirement may be the true reason behind the labor shortage
(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.
In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.
Why Boomers are leaving the labor force
CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:
- Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
- The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
- Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.
As Boomers retire, how does this impact the overall labor economy?
According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.
Is the real estate industry endorsing Carson’s nomination to HUD?
(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?
NAR strongly backs Dr. Carson’s nomination
When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”
At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?
The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.
In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…
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