When David Pendery, a corporate public relations specialist, decided to move his family from Colorado to Illinois this year for work, his biggest worry was whether he would be able to sell his home quickly.
It took just three days.
“We certainly thought selling our house would take longer,” said Pendery, who started in February at Kerry Ingredients, a flavoring provider for the food and beverage industries.
Pendery’s experience may be on the extreme side, but his case may be a sign of a revival in one of the historical advantages of the U.S. job market: the ability of workers to go where the jobs are.
For much of the past five years, falling house prices effectively locked people in their homes, since many were “underwater” – owing more on their mortgages than they could raise by selling.
At the same time, double-digit unemployment across much of the nation meant there were few jobs to move for anyway.
That may be changing. While far from their 2006 peak, home prices in major metropolitan areas have been rising since early 2012. If that persists, it should make it easier for Americans to move and for employers to match job seekers with available jobs, lowering the jobless rate and increasing overall economic productivity and growth.
“Until the real-estate market picked up, people wouldn’t even consider a move without the certainty that they could sell their homes,” said Jerry Funaro, vice president of global marketing for TRC Global Solutions, a domestic and international relocation service based in Milwaukee.
“Companies are now more inclined to make offers since we’re seeing real estate markets across the country coming back,” he said. “Last year, the pace of business started to improve and that momentum has continued in 2013.”
Housing added to growth last year for the first time since 2005, and single-family home prices recently notched their biggest annual rise since mid-2006.
Increased hiring, meanwhile, pushed the jobless rate down to 7.5 percent in April, its lowest in more than four years.
In 2013, employers have added an average of 196,000 jobs per month, although economists say that is still too few to absorb the nearly 22 million Americans who have lost a job, been forced to accept a part-time position or left the workforce altogether.
SERIOUS DETRIMENT
“The lack of housing mobility has been a serious detriment these last few years and, frankly, is something we haven’t seen much of since the Great Depression,” said Russell Price, senior economist at Ameriprise Financial Services in Troy, Michigan.
The unemployment rate reached 10 percent in late 2009, the highest in nearly three decades.
While mobility is not as robust as it was before the crisis, Price said the economic cycle is “about at the point where these types of structural employment problems start to fall away.”
The U.S. Census Bureau found that the number of people who moved last year rose to 35.6 million, pushing the overall mover rate to 12 percent from 2011’s record low of 11.6 percent, the first rise in four years. Long-distance moves ticked up as well.
Insight: Housing improvement may herald return of U.S. workforce mobility | Reuters.
