Small Businesses

What do booming home prices mean for your small business?

  • 2 min Read
  • February 2, 2022

Author

Escalon

Table of Contents

2021 was a white-hot year for the American housing market, with home prices rocketing higher seemingly by the day across most of the country. Around 20 cities recorded double-digit year-over-year price jumps. 

Phoenix and Miami saw an annual price gain of 32.3% and 25.7% respectively in 2021, according to a CNBC report. Home prices in Austin, Texas, and Boise, Idaho, catapulted more than 40% year-over-year, per LinkedIn.

This trend is likely to persist into 2022, owing to the low inventory of available homes and affordable mortgage rates. The combination of high housing prices and widespread adaptation of remote work suggests that businesses will have to be proactive to compete in the changing landscape of work. 

Here are three important decisions small businesses should focus on to stay competitive in 2022.

Embrace a remote-first culture



Many tasks once considered impossible to do outside a traditional office now seem completely possible in remote and/or hybrid work environments. Housing costs play an important role in this arena, as remote employees might choose a less-expensive housing option farther away from the office. Building a company culture that embraces remote work can keep those employees happy and productive, and attract talent from a larger pool.

Fine-tune compensation to remain competitive



A Conference Board survey found that U.S. companies have budgeted more money for pay increases than at any point since 2008, setting aside an average 3.9% of their total payroll for wage increases in 2022. For high-demand professionals such as data scientists and data engineers who changed jobs in 2021, the average bump-up in salary was an eye-popping 20%, according to executive recruiting firm Burtch Works

High housing costs will exacerbate salary growth, and companies that are looking to attract or retain talent need to be aggressive in pursuing information about compensation and making competitive offers to job candidates.

Select business locations with caution



The location of your business offices and operations where work can’t be done remotely is likely to dictate your ability to attract talent. You may make different choices once you factor in the relative costs of housing around the country. 

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