January’s Paltry Job Growth Mean a Muted Short-Term for CRE
The resurgence of Covid-19 continued to hang over the economy in January as only 49,000 jobs were created across the United States after a loss of 227,000 jobs the month prior. The current hiring trends appear to signal a muted, if not negative, short-term outlook for Commercial Real Estate. Professional and business services drove most of January’s job growth; however, many of these were for temporary positions. This continues to show a trend of businesses opting for maximum short-term flexibility during the Pandemic. The pursuit of temporary solutions doesn’t just apply to hiring. According to a report by Marcus & Milichap, “while most companies see a physical office as a permanent and necessary part of their culture and operations, the exact timing and nature of when and how employees return in mass remains unclear.”
Financial Pressures Drove Pandemic-Related Migration and It May Not Be Permanent
One of the common narratives about the changing migration patterns throughout the Pandemic is that most people are moving to greener pastures because of the ability to work remotely and because of fear of the Coronavirus. However, a new survey by the Pew Research Center shows that financial stress was the primary driver of people’s decisions to relocate – especially in households of more than one person. In November 33% of respondents said that financial stress was the key motivator in their decision to relocate, among this group 17% cited job loss while 15% cited other financial stress. Most migrants, approximately 30%, say they are renting for the short-term or immediate period, implying they would reconsider the move following the end of the Pandemic. However, research appears to show that people are looking to get comfortable in their new environments, as 69% say they are residing in a different home than where they initially moved.