As the world experienced its second year of the COVID-19 pandemic, the virus made its mark on the housing and job markets. In 2021, more than 47 million Americans resigned from their jobs, creating a movement dubbed the Great Resignation.
At the same time, the housing market boomed, driving up home prices with more people looking for homes than selling.
Bidding wars have become the norm and not the exception. Buyers have been forced to do out-of-the-ordinary things like pay cash, waive home inspections, or offer appraisal gap coverage in the event house doesn’t appraise.
To say that real estate markets have been different would be an understatement.
A recent study conducted by Real Estate Witch surveyed 1,000 many Americans who were part of the Great Resignation about why they left their jobs and how their priorities in life have shifted.
As more companies seek to hire or retain employees by allowing them to work from home, workers are growing more accustomed to having flexibility in where they live. Working remotely has become far more commonplace.
A home close to work is no longer a top priority, allowing people to purchase houses in less urbanized areas with lower costs of living.
Let’s take a closer look at the study’s findings, including how the Great Resignation and the housing market are affecting each other.
A Change in Culture and Lifestyle
Experiencing a once-in-a-lifetime pandemic seems to have shifted the mindset many employees have about their needs in a job and workplace.
The pandemic was at the forefront of employees’ minds as they changed jobs, with 80% of respondents saying it influenced their decision to quit. Of those, 41% said their employers didn’t implement enough health and safety measures and 28% did not want to follow newly established protocols.
Asked to list the main reasons why they left their jobs, the most common answer (31% of respondents) was that workers quit to leave behind toxic work environments that included discrimination, harassment, and a lack of work-life balance.
Early in the pandemic, many jobs shifted to a work-from-home structure. During this time, some employees found they enjoyed working from home because it freed them from stressful workplaces.
Others enjoyed the extra time that working from home gave them for their personal lives, particularly by cutting down on commuting and after-hours work functions.
The appeal of escaping the office and establishing a better work-life balance has led to increased interest in online jobs that offer more convenience.
With people shifting to work from home, houses are becoming more than a place to live. Homes have to meet more needs, serving as an office, gym, classroom, and more. With the freedom of working from home and the need for more space, many homeowners in 2021 wanted to trade in their smaller homes in more expensive zip codes for larger homes with a lower price per square foot.
When looking for a home that has multiple functions to meet, it’s important to know how to find a real estate agent who can help you locate properties that fulfill your growing list of needs.
This also became a peak time for real estate investors looking to take advantage of the 1031 exchange and roll over the profits of their investments by buying new properties in places like Texas, which has a lower cost of living than other parts of the country and is in demand for buyers and renters alike.
Financial Considerations at Stake
With housing prices and inflation on the rise, it may be surprising to find that salary was not the primary consideration for all of the survey respondents.
As they quit their jobs, 80% of employees received a counteroffer from their employer.
A counteroffer might have persuaded some to stay on board, especially those who did not have a new job already lined up.
Of the 55% of people who had a job lined up before quitting, 53% left to take a job that had a decrease in salary while 42% reported an increase in pay.
On average, respondents reported an $8,000 annual pay cut, and many said they would’ve taken an even bigger cut to leave their job in exchange for better working conditions or an opportunity to work from home.
For households experiencing a drop in income — either by going from two salaries to one or having an overall reduction — many were looking to trim expenses by moving somewhere with a lower cost of living than their current community.
Employees working from home have more freedom to choose where they live, allowing them to take things like personal and lifestyle goals into account instead of having their options limited to places close to their employer.
As people look to save money when house hunting, it’s important to work with a real estate agent who can not only get you a bargain on your new home but can save you money throughout the process.
One way to do this is by working with a real estate agent who charges a lower commission fee than traditional realtors. While most agents charge 2.5% to 3% of the purchase price, some agents are willing to work for a flat fee or a rate of 1% to 1.5%.
Having commissions set in stone is one of many common real estate myths.
Quick Decisions and Long-term Outcomes
During the height of the housing boom in 2021, homeowners in the process of selling were accepting offers almost as soon as they listed their homes on the market, with buyers making quick decisions to find the home of their dreams.
Many employees moved equally fast when deciding to leave behind their old workplace. Nearly one in four people resigned after mulling it over for less than a week.
About half of the employees gave one week of notice or less, while one in four gave their employers zero notice, quitting the same day.
Looking back at their decision to quit, respondents had mixed feelings. In their responses, 56% had some regrets about quitting, but 58% also said they wouldn’t return to their old jobs without major improvements. While some were anxious or stressed about leaving their employers, most expressed feelings of relief, happiness, and excitement.
Many people quit on short notice whether they had another job lined up or not. Only 55% of those surveyed had a new job lined up before quitting. However, out of the 1,000 people surveyed who quit in 2021, 35% still do not have jobs. Of that group, 50% of people have been unemployed for at least six months.
Out of those who quit their job without another gig lined up, 56% said they don’t regret it.
Of those who left for new jobs, they were 47% more likely to be very satisfied with their new role in comparison to the one they quit. And out of those who quit their jobs for new ones, 44% are considering leaving their new jobs within the next six months.
Where things evolve from here is anyone’s guess but the smart money is trending towards more flexibility on where you work.