The Azucena Take: Labor Shortage and its Impact on Investment Real Estate

The latest jobs report came out and the results were once again below expectation. There are an estimated 8 million jobs on the market while 9.3 million people remain unemployed. However, employers are having trouble finding staff.

What is responsible for the labor shortage has been debatable, with some blaming unemployment while others blame the lack of opportunity in these roles. Regardless of the reasons, it has had an impact on numerous businesses.

Here is a quick breakdown of how the labor shortage is affecting the economy:

• Hotels are unable to operate at full capacity despite the high demand.

• Some restaurants are scaling back on hours due to the lack of staff.

• Senior Housings have had to turn away new residents due to the lack of staff.

• Mixed in with the supply shortages, construction projects are falling behind.

• A lack of truckers is also creating a logistics problem for supply chains.  

There have been two responses to the labor shortage. Numerous companies and businesses have raised the starting wage and offered new benefits. Meanwhile, several states have opted to end pandemic assistance by the summer.   

This of course has also added to the fears of inflation and the rise of interest rates, which will benefit owners of investment properties. Real estate has always been one of the best investments, regardless of the economic climate.

The businesses that are doing good are in this climate will reward the property owners. The lack of housing has created a demand for apartments and self-storage while adding more value to existing structures.

Investors need to realize that the markets could change during the Summer Season as life returns to normal. An economic boom is expected but what it’s unclear is the changes in the market. All one could to do is study the trends and work with experts to better themselves up for what is to come.