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?
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.
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.