Even as area real-estate agents note a burst of activity by would-be homebuyers, possibly in part due to the $8,000 tax credit for first-time homebuyers, corporations are reviewing their relocation policies in an attempt to help sell the homes of employees being relocated, while doing their best to limit their own expenditures to make that happen.
Just 8.2 percent of residents in the Northeast relocated their residence last year, according to the U.S. Census Bureau. Nationally, the residential mover rate dropped to 11.9 percent, the lowest figures since 1948 when the bureau began tracking residential moves.
According to Paragon Global Resources Inc., which has its East Coast service center in Danbury, if 2008 was marked by companies reinstating guaranteed buyout provisions and reimbursement for losses on sales, 2009 will be about compliance with relocation policies ”“ and creative marketing of homes, of course. Among other tips, Paragon suggests that employees cap the asking price on their homes at 5 percent above the average.
Fairfield County has a significant cluster of companies and experts in the relocation industry, anchored by Danbury-based Cartus Corp., which has more than 1,600 employees.
Joseph Benevides Jr., a senior vice president in the Danbury office of Paragon, is chairman of ERC Worldwide, a Washington, D.C.-based trade group for professionals in the employee relocation industry. The ERC Worldwide board also includes Johnny Haines, senior manager of relocation services in the Wilton office of Deloitte L.L.P.; and Jim Schneider in the Wilton office of Weichert Relocation Resources Inc. The board of the New England Relocation Association includes John Sculley, managing director of RIS Consulting Group, a Norwalk firm that consults on corporate relocation programs.
In an attempt to cut the cost of relocating employees, companies increasingly are adopting “tiered” policies that provide differing levels of benefits for various classes of employees, according to a survey released in March by ERC Worldwide.
To save money, companies increasingly are eliminating coverage for the transportation of recreational vehicles; restricting the losses they will cover on the sale of a home; and offering cash bounties for home sellers who help find buyers for their houses.
In a March letter to customers, Cartus CEO Kevin Kelleher claimed one Cartus initiative resulted in a 49 percent reduction in home inventory in just 30 days in nine major U.S. markets, without specifying details.
Realogy, the parent company of Cartus, reports its results next week: On a preliminary basis, the company reported a $260 million loss in the first quarter on estimated revenue of $695 million, but said it cleared the quarter in compliance with lenders.
The National Relocation Conference takes place May 13-15 in San Diego, with local speakers including Kathy Morris, vice president of global consulting in the Shelton office of Prudential Real Estate and Relocation Services.
Among other recommendations, Prudential suggests companies examine their policies on household goods and evaluate supplier relationships ”“ including appraisers who are having to spend additional time to deduce the true value of homes in a declining market.
On the former front, strategies can include:
Ӣ decreasing the amount of time allowed for temporary storage;
Ӣ cutting coverage for packing and product assembly;
Ӣ excluding coverage for large items requiring crating, like flat-panel TVs and exercise equipment;
Ӣ asking employees to move during normal business hours;
Ӣ eliminating reimbursement for multiple stops by moving companies;
Ӣ capping coverage for pet assistance;
Ӣ limiting vehicular transport to two autos;
Ӣ capping miscellaneous expenses employees can claim.
