FIRM PREDICTS JOB RELOCATION
SURGE FROM FORMER
UNDERWATER BORROWERS
Challenger, Gray & Christmas, Inc., a nationwide outplacement firm, expects to see a relocation
surge in 2013 from job-seeking homeowners who
have regained some equity and are finally able to
list their properties.
As home prices improve, more borrowers
have been lifted out of negative equity and are
thus uninhibited from selling their properties to
relocate. According to a recent report from Zillow,
1.9 million homeowners were freed from negative
equity in 2012.
"One factor that has kept unemployment rates
high has been the inability of underwater homeowners to relocate for employment opportunities,"
said John A. Challenger, the firm's CEO. "With
home prices bouncing back, even those who may
now simply break even on a home sale might
consider moving to a region where jobs are more
plentiful. This could spark a more rapid decline in
the unemployment rate over the next year."
According to a December report from the
Bureau of Labor Statistics (BLS), 130 metropolitan
24
areas had an unemployment rate that was 8 percent
or higher and 47 metros registered rates 10 percent
or higher. At the same time, 20 metro areas have
a rate that sits below 4.5 percent, well beneath the
national average of 7.9 percent as of January.
"It is likely that employers in these low-unemployment regions are actually struggling to find
available workers with the skills needed to fill job
openings," Challenger said.
According to the firm, its job-seeking clients
were more willing to relocate for a new opportunity last year. In 2012, an average of 13.3 percent of
those finding new positions each quarter relocated
for the opportunity, up from 11.7 percent in 2011.
In 2009 and 2010, the relocation rate was about 10
percent.
The firm also noted states that are showing the biggest gains in home prices are also the
same states dealing with higher unemployment.
Arizona has seen home prices rise 20.1 percent
over a one-year period, according to data from the
Federal Housing Finance Agency (FHFA). The
state also has metros with high unemployment
rates such as Flagstaff (8.4 percent), Lake Havasu
City (9.5 percent), and Prescott (8.6 percent).
In California and Nevada, home prices rose
7.2 percent and 8.7 percent, respectively, over a
year, according to FHFA data, while their unemployment rates are above the national average.
BLS reported California's unemployment rate
was 9.7 percent in December, while Nevada had a
rate of 9.8 percent.
Furthermore, data from Zillow showed
Phoenix, Los Angeles, and Riverside were among
the top metros where the most homeowners were
freed from negative equity in 2012.
KNOW THIS
The number of U.S.
properties with a
past due mortgage
totaled 5.2 million
as of January 2013,
Lender Processing
Services reports.
