[1]A recent report about moving holds some important glimmers of light for the moving industry.
The Boston Fed study [2] found that housing prices have become a key determinant in whether people move – if people can not get the price for their home that they think it’s worth, they won’t sell and move. That’s a shift: before, if you needed to move, whether for retirement or a job, selling your current home wasn’t a roadblock.
Now that housing prices have fallen so much, that type of activity has stalled, and migration patterns have hit generational lows.
So where exactly is the good news in this?
The biggest hindrance to someone selling their home, or putting their home on the market, is the perception that they’re losing. The home that 4 years ago was worth $300,000 is now worth only $250,000. They sell now, and they’ve lost, even if they only paid $200,000 for it.
It’s a skewed way of looking at things.
Granted, there are many folks who are underwater on their mortgage, effectively shackling them in place unless they can either produce the cash to pay off the difference between the mortgage and the selling price, or convince their lender to do a short sale.
However, many people bought well before the housing boom. They’re not underwater. They have equity. They can move.
But the housing industry and government have beaten into our heads that your home is an investment. Expect a solid return year after year. Tap into your home to fund your retirement.
People are slowing catching a whiff of the the new reality.
That reality: Depending on where you live, that nice nest egg with a front porch is now 10%-50% less than what you thought it was.
That sucks, and you’re probably angry. But will that stop you from living where you want to live?
The longer the housing drag continues, this ‘I-shoulda-sold-in-2006 remorse’ will be less of a factor in peoples’ relocation decision. The regret over your ‘loss’ will lessen. You’ll feel better about selling.
The bursting of the housing bubble has been a painful process so far, and it’s still got a ways to go. But the sooner we get there, the sooner houses will be sold — and the sooner moving companies [3] will see some daylight.
Related Articles: