The average cost for a gallon of regular unleaded fuel in the Tampa Bay area reached a new height on Monday at $4.76, according to data from AAA The Auto Club Group. Some experts warn that it could reach between $5-6 this summer. Real estate in areas where people have a long commute could see lowered demand as people battle rising fuel costs and properties closer to cities hold their values.
Related, the labor shortage has impacted several industries in the U.S. but has boosted the demand for houses. As employers compete for a limited pool of workers, wages gradually rise and people can consequently afford to spend more on bigger purchases such as homes.
The tight labor market could make growing factors of a recession look different from past economic downturns.
“The worker shortage also implies a prospect of a most unique economic recession,” said Lawrence Yun, chief economist for the National Association of REALTORS®. “Even if there is a recession, there may not be that many job cuts as companies want to hold on to their workers. The health of the job market is especially important in an environment of higher mortgage rates.”
According to data from the U.S. Department of Labor, real estate and rental sectors saw employment grow by about 14,000 people in May. While homebuilders and residential contractors added about 16,700 jobs.
With high rental prices, property prices and mortgage rates, many young adults are feeling the pressure of buying now or relying on assistance from family members. Millennial homeownership trails behind other generations. 36% of millennials who have recently purchased a home say they bought a home earlier than they intended because they wanted to lock in a lower mortgage rate, according to a new survey from LendingTree. Some REALTORS® are even reporting more and more parents buying homes for their kids.
Familial assistance is becoming more prevalent now than ever, especially because real estate is deemed as a hedge against inflation. Another hedge that is being considered are cryptocurrencies and we are seeing increasing growth in real estate markets both nationally and locally. Last month, a real estate investment platform based on blockchain called Parcl raised $7.5M in new funding to boost real estate partnerships.
Parcl lets users invest in a digital square foot of real estate in lucrative neighborhoods. It is a digital real estate protocol built on the Solana blockchain, which specifically hosts decentralized and scalable applications.
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