Pending home sales declined in February, a worrisome sign for workers contemplating listing their homes in order to relocate within the tristate area or farther away.
Fairfield County is a hotbed of sorts for relocation ”“ both by virtue of the relatively high number of corporate headquarters it boasts, as well as by the presence in Danbury of Cartus Corp., a subsidiary of Parsippany, N.J.-based Realogy Corp. that helps corporate executives and other employees buy or sell homes as part of a job transfer.
The drop in pending sales ”“ measured by houses that are under contract but have yet to close ”“ occurred even as sale closings for existing houses increased in January, according to the National Association of Realtors.
Aversion to risk-taking
The spring months will be most telling for those contemplating a move, given the predilection of families to finish the school year before accepting a relocation to another state or country.
“In winter months, the families that want to make that traditional move, they are not in the market,” said Lawrence Yun, chief economist of the National Association of Realtors.
Just 7.6 percent of job seekers relocated for new positions last year, a 25-year low according to Challenger, Gray & Christmas Inc.
The Chicago-based placement company attributed the decline to an increased aversion to risk-taking just as the job market begins to show some signs of life. That compared to a 13.3 percent relocation rate in 2009 and an 11.6 percent rate in 2008, the previous low.
In a survey of nearly 100 companies experiencing problems with getting employees to move, Worldwide ERC estimated about nine in 10 workers cited the negative equity position of their current homes as the main deterrent to accepting a relocation. Just a third of those polled cited family resistance to a move.
All about cost-containment
In its own survey last year, Atlas Van Lines Inc. said small companies were the least optimistic with regard to underwriting the cost of relocating employees.
“The recession, which really began with the bursting of the housing market bubble, has made it nearly impossible for job seekers to relocate for new positions,” said John Challenger, CEO of Challenger, Gray & Christmas, in a prepared statement. “Job seekers who own a home ”“ even if they are open to relocating for a new job ”“ are basically stuck where they are if they are unable or unwilling to sell their homes without incurring a significant loss. In a strong job market, where talent is difficult to find, employers might be more willing to help offset some of the financial loss associated with relocation. However, at this early stage of the recovery, companies are still in cost-containment mode.”
Job seekers may also be opting to eschew relocation due to increased confidence in their ability to find employment locally, he added.
Yun of the National Association of Realtors concurs that employment and housing are inextricably linked ”“ along with energy costs. With oil prices rising past $110 a barrel entering March, he estimated that a price of $140 a barrel could brake economic growth.
“There are some wildcards that can derail the economic recovery, but broadly speaking I think the economic recovery is still taking shape,” he said. “(Oil prices are) coming uncomfortably close to that recessionary tipping point so it”™s very disconcerting.”
