Location, location, location—plus home values and mortgage rates. The state of the real estate market has a massive impact on relocating employees, and proactive employers recognize this.
Almost inevitably, when an applicant receives a long-distance job offer, the next question is: what’s the housing market like—and how does it compare to here?
The fact is, real estate values are pivotal to the quality-of-life issues people care about most. The kind of house a family can afford. The character of their neighborhood and schools. Even the length of a new hire’s commute.
That’s why it’s in an employer’s best interest to help employees acquire a realistic understanding of the real estate market as early in the relocation process as possible.
Setting realistic expectations helps employees make informed decisions, ensuring a positive relocation experience. It also helps prevent relocations from imploding mid-move as a result of late-term sticker shock.
So, what do relocating employees need to know—and how can employers help them acquire this knowledge quickly and easily?
A Tale of Two (Local) Markets
Although the typical American home has an average value of $356,026, real estate values vary wildly across the U.S.—and we’re just talking domestic moves here.
For example, in San Jose, California, the median home price is a staggering $1,312,164. Contrast with Decatur, Illinois, where it’s a modest $103,100. An employee relocating from West Coast to the Midwest may be thrilled to score a mansion, but one making that move in reverse may need to make some serious concessions.
Either way, employees need to know this upfront, so they can plan accordingly.
And so do employers, so they can calibrate their job offers accordingly. For example, a Silicon Valley tech company trying to attract far-away talent might need to sweet the pot with a big signing bonus to cover a hefty down payment.
A Rapidly-Changing National Outlook
For the last few years, the U.S. has enjoyed a booming housing market: soaring housing prices, record-low mortgage rates and a hot seller’s market. But now that’s changing—and changing fast.
Talk about whiplash. One year ago, the average rate for a 30-year fixed mortgage was under 3%. Recently, those same rates have topped 6%. On a $300,000 mortgage, that’s an additional monthly payment of about $535. Ouch.
Not surprisingly, home values have fallen. And houses are staying on the market longer, which may slow relocations for employees selling a home. Any way you look at it, it’s a whole new ballgame—one that’s happened so quickly, relocating employees may need help wrapping their heads around it.
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How Employers Can Help Employees Master the Real Estate Market
Smart employers are leveraging their relocation programs to give employees the information and support they need. Often, this includes:
Providing Responsive Relocation Benefits
Home-buying isn’t easy under the best of times, and it’s no longer the best of times. A competitive relocation policy offers the flexibility to cover needed house-hunting trips, as well as some or all closing costs—partially offsetting the sting of higher mortgage rates.
Offering a Network of Vetted Real Estate Agents
Proactive relocation providers have created national networks of top-performing real estate agents who help employees manage both ends of the home-selling/home-buying process.
A powerhouse real estate agent can quickly bring families up to speed on their local market, including current home values, the most promising neighborhoods for their situation, commuting options, etc.
They can help home-sellers prepare and price their home and help buyers negotiate a good deal, while providing referrals to trusted attorneys and home inspectors, simplifying the closing process.
Offering a Network of Preferred Mortgage Lenders
Similarly, top relocation providers have developed relationship with leading lenders who may offer discounted interest rates and an expedited approval process in return for a steady volume of business. And given current interest rates, this can be especially advantageous right now.
Connecting Employees to Hyper-local Market Information
Rather than leave employees to browse the Internet on their own—an overwhelming and not- always helpful process—tech-based relocation companies connect employees directly to current, carefully-curated information about their new location.
For example, UrbanBound’s relocation platform connects employees to city and neighborhood guides that detail real estate activity, school ratings, crime data and more—as well as insider tips from future coworkers that can make a big difference.
Whatever the state of the real estate market, thoughtful employers give their relocating employees the information and tools to manage it—and right now, that’s more important than ever.
If your current relocation program isn’t getting the job done, now’s a great time to upgrade your program.
