While I rarely see it discussed openly, every investor I’ve talked to recently has felt the squeeze that operating costs have put on our businesses. Just take a look at how much various operating costs have gone up in 2024:
- Property taxes nationwide went up an average of 5.1%
- Home insurance went up an average of 10.4%
- Meanwhile, wages went up 4.2% as of March
All these are substantially higher than the current inflation rate.
Some price growth has actually moderated, but only after enormous increases in the past few years. For example, construction material prices only went up only 1.3% in 2024, but that’s after increases in 2021 and 2022 of 14.6% and 15%, respectively. Gas prices have actually come down for two straight years, but are still over 50% higher than they were in 2021. Electricity rates only increased 0.9%, but that was after a 12.1% surge in 2022.
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