On the Move: 'Shift Happens': Latest real estate trends impact relocation
Nov 04, 2013
On the Move: 'Shift Happens': Latest real estate trends impact relocation
By Michelle Sandlin | November 1, 2013
There continues to be a lot of good news about Houston's real estate market, which is characterized by comparatively low housing inventory, increasing demand, bidding wars, and appreciating sales prices.
Meanwhile, Houston continues to draw many new residents as a top destination for relocations, adding many new home buyers into the mix.
The current real estate market that we have here in Houston is not unique. In fact it is being felt to a similar degree throughout many U.S. markets, and in some markets, the inventory is much lower and prices are increasing at a much faster pace.
The latest U.S. real estate market trends across the country are also impacting relocation, which in turn is creating implications for relocation policies, transferee experiences, supplier demands, and costs.
This was the focus of an educational session entitled, "Shift Happens," at the recent Worldwide ERC (Employee Relocation Council) Global Workforce Symposium in Dallas.
A panel of real estate and relocation industry experts looked at the different relocation industry segments and the impact of the real estate market on each of those segments.
Moderated by Beth Archibald, owner of Archibald Relocation and Real Estate Services, the panel consisted of: Richard J. Willard, marketing director of Wells Fargo Home Mortgage; Ron Box, president of Box and Associates; May Caffi, senior director, relocation and immigration services of Marriott International; and George Bates, senior vice president of Graebel Companies, Inc.
Attendees were invited to bring their questions and share their insight on what they are doing to successfully move transferees during unprecedented real estate market shifts, like the one that the Houston area has been experiencing.
Archibald pointed out that in real estate markets with a low inventory, high demand and increasing prices that the result is often frustration for people who are relocating into those markets.
She said that it often affects how many home-finding trips a transferee and family will have to make, and can create a "kill the messenger" situation for those who are closest to the transferee, which is typically the relocation agent.
For the corporation, the impact is often the need to stay flexible in terms of making changes to relocation policies and coming up with alternative solutions and exceptions, while trying to remain cost-effective.
Caffi, as the corporate representative on the panel, said that her biggest challenge as a result of these shifts has to do with the fast-pace of the real estate markets. She said that on a typical six-day house hunting trip that their relocating employees might make 10 offers on properties and have none of them accepted, and then need to extend their trip. Although this has become necessary, it costs the company additional money.
From the lender perspective, the shift has largely to do with the changes and challenges that have been brought about by new mortgage regulations and requirements, which impact their business and the ability of a relocation home buyer to qualify for a loan.
Willard said that the shifts for lenders have been focused on the ability of a transferee to repay the mortgage, and on qualified mortgages.
Then there are the relocation management companies that are touching and coordinating many of the relocation aspects for the corporate client, and for the employee and family.
Bates, the relocation management company representative in the group, said that one of the things that they have had to deal with in the last six months is all of the alternatives to home sale programs, like property management, commuter policies, or temporary domestic assignments.
"Now we have a pool of hiring managers and transferees who say that the only way to do this is not just to sell my house in the origin and buy a new house in the new location, so I think that is a huge shift for us," Bates said.
Meanwhile, the appraisers are faced with challenges whenever there is a relocation buyer entering a market and willing to pay over asking price for a property.
Box, the appraiser in the group, said that the challenge for him continues to be the inability of a property to appraise when a relocation buyer opts to purchase a property for an amount that is higher than the asking price.
"We probably had more appraisals not come in this spring than we have had," he said. He added that most of the deals did go through though in the end.
Michelle Sandlin has been involved in the relocation industry since 2000. She serves as Vice President/President-Elect for Houston Relocation Professionals and is Vice President/Director of Communication & Marketing for Chicago Title. Send questions/comments to: michelle.sandlin@me.com. Connect with Michelle on Facebook: www.facebook.com/HoustonRelocation and on Twitter: @MichelleSandlin. Also visit "On the Move - Exploring Houston Relocation with Michelle Sandlin" at blog.chron.com/onthemove.
If you have something to share or contribute, please send an email to michelle.sandlin@me.com. Please look for another Michelle Sandlin "On the Move" relocation article in today's Jobs section.