US workers saddled by houses that won't sell
Soft real estate markets hurt worker mobility as relocation gets more costly – financially and emotionally.
from the April 2, 2007 edition
Page 2 of 4
"The profit was just going away," Greenish says. "We started questioning our decision to move. It was getting harder and harder – the financial issues of living in two places, traveling back and forth, and the general strain on a marriage."
The publishing company that hired him offered Greenish no relocation reimbursement or buyout of his house.
"That seems to be the trend now," he says. "If the company is actively recruiting somebody, or it's a high-level job, that's a different thing. But a lot of companies aren't ready to absorb relocation costs anymore."
He tells of a neighbor, an architect, who received only $1,000 from his new employer to move from Denver to Orlando.
In 2006, the average cost to transfer a current employee who owns a home was $64,235, according to Worldwide ERC. For a renter, the cost was $18,736. Moving new hires costs a business less.
In areas such as Florida, companies typically pay $2,000 to $3,000 a month for a furnished two-bedroom executive suite, Drescher says. In San Diego and San Francisco, monthly costs average between $3,000 and $5,000.
Moving companies hurt, too
Moving companies, too, are feeling repercussions. "We're dealing in a fairly soft market," says Ron Martin, regional sales manager for United Van Lines in St. Louis. "Business is based on corporations needing people."
Some companies are avoiding or postponing moves by turning to telecommuting. "It's a lot cheaper to set them up in their home with all the tools," Drescher says. "The Internet provides the ability to perform the same task that they would at a bricks-and-mortar location."
For families, the current housing market raises complex questions. "It's not as simple as, 'Hey, honey, I have a new job, we need to move,' " says Jim Lanzalotto, vice president of Yoh, an outsourcing firm in Philadelphia. "Now you have to evaluate whether it's worthwhile to make the change."
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