Real Estate, Pensacola & The New American Workplace

Pensacola Office Worker -- Real Estate -- OurBroker.com

You can see how part of the new American jobs market is evolving. Just look at the office worker above, toiling away on his latest assignment from that folding chair on Pensacola Beach.

The American workplace is changing and with it the needs of business. We’re now into the “sharing economy,” a cutesy term which for many workers means less real estate ownership, lower incomes and fewer jobs.

The jobs of old are not coming back but in many cases new jobs come with more flexibility. For a number of smaller cities such changes are at the core of an economic future which looks remarkably bright. To name just a few, think of Ann Arbor, Austin, Chapel Hill, Pensacola, Charlottesville, Albuquerque and Colorado Springs.

If we’re going to have more and more people telecommuting, if the new standard for a growing portion of the labor force is productivity and not physical attendance, then why wouldn’t such workers move to the locations which come closest to the lifestyle they prefer and cost far less than many metro areas?

The New Economics

People with lots of talent, training and mouths to feed are increasingly part of the gig economy, a world where “flexibility” has replaced healthcare benefits and “full-time” means — on average — 34.5 hours of work per week. The result, according to the Census Bureau, is that household incomes in 2014 were 7.2 percent lower than in 1999 – and, to be polite, there doesn’t seem to be much change on the horizon which will make the middle class richer or provide more financial shelter. As the warm and fuzzy billionaire Warren Buffett sagely explains, “there’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

Real Estate Can Set You Free

With fewer dollars floating around but increased flexibility, a lot of people think that a better work/life balance is actually possible. While everyone has a different definition of what “better” might mean, in the new economy there are new options to consider.

For instance, if you can live anywhere why not live in a place without state income taxes? Seven jurisdictions now have no state income tax – Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming, although because of falling oil prices Alaska is talking about imposing a state income tax for the first time in 35 years. Surely somewhere between Key West and Fairbanks there’s a place that can be fun and relaxing for everyone.

Also on the outs are McMansions. Huge houses mean lots of square footage to clean, heat, air condition and clean some more. Local governments love such homes because they generate nice, fat property tax bills year in and year out. You can reduce your monthly costs substantially with a home of modest size, whatever “modest” means to you.

Lower Real Estate Costs

If you have a smaller, less expensive house you can have less mortgage debt and thus lower monthly payments. According to the Federal Reserve Bank of New York, between 2 and 2015 mortgage debt in the United States fell by more than $1 trillion.

With the money saved on state income taxes and smaller mortgages it becomes possible to afford such things as health insurance and auto loans. A simpler lifestyle means less stuff to buy and therefore smaller credit card bills.

A lower cost basis is enormously important because it creates opportunities to save. if you’re not saving then the loss of a single paycheck can demolish your credit standing while the threat of fewer hours or no hours can give real leverage to your employer. In the new economy you have to save because if your employer downsizes, right-sizes, changes the budget or moves production overseas you’re screwed if you don’t have reserves, the more the better.

It used to be that if you lived in a smaller community you didn’t have the options and choices available in major metro areas. No doubt that is still true, but it’s also true that the gap is closing. In the same way that the Sears and Montgomery Ward catalogs long ago democratized the distribution of goods and services nationwide, the Internet allows anyone from anywhere the opportunity to shop, learn and communicate.

Lastly, it’s not just office workers and telecommuters who can benefit from the new economy. At this moment Pensacola is planning for the addition of 15,000 manufacturing jobs on a new industrial campus. That may not be a big deal in a metro area with five million people, but consider this: fewer than 55,000 people live within Pensacola’s city limits and the whole metro area ranks 109th in population.

While the big city lights no doubt remain alluring and attractive, there are a lot of smaller metro areas where costs are low and life is good — not a bad combination in the new economy.

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