Employers are waiving job requirements to fill empty berths with talent from untapped pools, but will it benefit the housing industry?
According to the Wall Street Journal, the percentage of jobs asking for a college degree fell from 32% to 30% in the first half of this year. Even more significant has been the drop in experience requirements for entry-level jobs, which dropped from 29% in 2012 to 23% now.
The pendulum has swung strongly back in favor of job seekers as the tightest job market in decades has employers trying to cut down on hiring costs by offering more money upfront, lowering their standards or retraining their existing employees to fill new roles.
For instance, Hasbro split four marketing jobs intended for business school graduates with MBAs into eight lower-level positions. Hasbro originally sought candidates with a two-year degree but eventually dropped the requirements for college education and received 100 applications to fill nine positions.
Other companies have gone so far as to skip drug testing and criminal background checks in addition to relaxing education requirements, according to the WSJ article.
At first blush, it would seem that this influx of jobs might create more demand for homes, but National Association of Realtors Chief Economist Lawrence Yun says not so fast.
“Some of the new employment gained from lowered hiring requirements will bring second or third incomes to households, and it is definitely positive news for supporting housing demand. For a single person going from jobless to employed, it is good for that person to develop new on-the-job skills, but it will not immediately contribute to housing demand, since these jobs are likely to be entry level and pay below the average wages,” Yun told HousingWire.
The more likely outcome is that more jobs will mean even more demand for multifamily housing than there already is.
Demand for multifamily housing appears unstoppable, thanks to rising costs of living, sky rocketing home prices and changing lifestyles.
Though affordability is certainly an issue in the multifamily market – much of the new product is Class-A and the pipeline is tightening for multifamily construction, despite crazy demand–the issue is much worse in the single-family market, and many people will remain renters by necessity, despite getting better jobs.
Currently, Class-C housing is reigning in terms of demand with a 95.9% occupancy rate as of the first half of this year. Class-A and Class-B are also exhibiting remarkable occupancy rates of 94.8% and 95.4% respectively.