Tech Workers and Pink Slips

Full Video Transcript Below

[00:00:00] Good morning, real estate fans.. Alice Lema here, broker John L. Scott in beautiful Southern Oregon back with the weekly podcast. Thanks for joining me again this week. Talk about the recent mass layoff and the high tech worker world, and why that matters to us here in Southern Oregon, because it is already affecting our local market.

[00:00:20] So before we jump into that, let's give you a quick second to subscribe to the channel. Give us a like, thumbs up, send me some questions. Some remarks, feel free to share with your friends and family. And yeah, just love it when people reach out during the week. It's great to hear from you.

[00:00:35] Okay. So with that aside, let's talk about why the high tech crew layoff is impacting Southern Oregon local market. So, first of all, if you don't know what we're talking about, there were 17,000 high-tech workers that were laid off this week. And the reason it matters not only because they're human, but, but it matters to us because that is a huge, a huge buyer pipeline for us in Southern Oregon.

[00:01:00] And it's not that they were all buying in Southern Oregon at the same time, it's just that, that's where a lot of our housing buyers come from. And it was very pronounced during the shutdown, even though nobody was supposed to be leaving their house. But it continued post a shutdown and it's always been a big buyer pool for Southern Oregon, the people from Seattle from the bay area from LA. But now that we have the post pandemic employment scenario where people can permanently be given remote worker rights, then, then they want to be here.

[00:01:38] They all, there's other places in the United States they want to be too, but we are one of the top 25 places to live if you're in Silicon valley, especially west coast tech. So to lose 17,000 people just in that industry is very concerning. Our little housing market is shifting anyway. We were going into a little bit of a softening, a little bit of a decline coming off the highs mostly because of inflation and the interest rate changes .

[00:02:07] Which by the way, reports this week said $30,000 in buy pre-approval so it was documented that we've lost $30,000. Our buyers have lost $30,000. So if you're selling and you wonder where all the buyers went well, between that and the tech worker layoff, that's what's going on. So going back to the tech worker and why we should care, we're losing our buyer pool. We're also. That's number one.

[00:02:34] Number two is we're faced with the people that already moved here that were given remote worker status. You know, they made buckets of money at those high-tech jobs and they brought those jobs with them and could afford to live here because of that, but now they don't have those jobs.

[00:02:51] So what does that do to the house they purchase? Well, some of them are going to have to sell it because they just can't, they can't keep the mortgage or they can't get another remote worker job at that wage level. And maybe they're going to have to go to work here. Our wages just don't compete with that.

[00:03:10] We just don't have that kind of an economy here. So I'm looking for a certain number of homes to go on the market kind of suddenly just because they can't keep them and they might downsize and buy something smaller here. But they also, you know, might do something else. They might go somewhere else.

[00:03:29] So look for a certain number of sales to be happening. And don't get all blood thirsty if you're buying. Don't think this is a crash or you're going to steal a house cause that's not what's happening. All these folks have equity and they're all smart savvy people. But they are going to be selling and they can probably undercut a little of the locals that have had their house on the market for a month or two. So I'm just saying, look for an additional inventory pipeline. Look for another batch of sellers to come on the market in the next three weeks to three months.

[00:04:06] And number three if these if these layoffs continue, cause that's what they're saying, they're going to do. Or say there's more layoffs coming in the tech world. We're also having simultaneous layoffs in the housing industry. So here we are with kind of a recipe for making your stomach hurt. So what does this mean? If you wanted to move? I think you should move now because. I don't know what it's going to be like six to nine months. Now, last week I thought I had a little bit of a handle on my prediction. I don't know.

[00:04:44] That the same thing grace we had with this kind of soft recession, I guess we thought we would call it, was that we were underemployed. You know, our employment numbers were still really good. Well, if we end up with. You know, worsening situation, the employment department that does make us look more like what happened in the seventies and it was really bad and icky.

[00:05:05] So I don't know. We, we had a strong economy going into the pandemic. We're resilient people, especially here in Southern Oregon, but the situation with the tech workers gave me pause. That was a lot of people to lay off all at once and it doesn't sound like they're done yet. So because that is such a big part of our buyer pool, plus the people that are here that thought they were going to keep those $200,000 a year jobs, I just think it could cause a little bit chaos, but it would be short term.

[00:05:35] In my opinion, it would be one to three months, one to six months, and then it would all be resolved. And maybe by then the world would be a better place. One can only hope. Right. Okay. Well, that's the podcast for this week. Don't want to make it sound gloom and doom just wanted to be kind of observant and you know, keep you updated about what's going on because it does affect us.

[00:05:59] All right. Give me a call, give me a text. If you want any help this weekend, otherwise have a beautiful weekend and we'll talk to you next week. Bye.