Housing Recovery Raises Expectations for Relocation Recovery

by Marillyn Tefft, Senior Researcher 5. March 2013 16:13

The keystone in the acceptance of a relocation offer frequently centers on the cost-of-living differential for housing between locations. The U.S. average home price in ERI’s Relocation Assessor dataset reversed from negative to positive in our April 2013 release. Approximately 65% of the over 7,000 locations where we collect home sales data in the U.S. are now trending positive. In addition to providing local home sales price data, our analysts and researchers follow a number of key housing indicators, which are now emphasizing that 2012 was “the year of the housing recovery.” A relocation recovery could mirror this housing recovery. Some highlights from recent research follow.

Census Bureau: New Single-Family Home Sales in January 2013

  1. The number of new homes sold in January (437,000 at a seasonally adjusted annual rate) was the best month for new home sales since July 2008, and the best January in five years.
  2. The total sales volume in January at more than $125 billion was the best month for total sales since July 2008.
  3. The supply of new homes for sale at the current sales pace fell to 4.1 months in January, the lowest level of inventory of new homes relative to sales since October 2004 (3.9 months). The historically low housing inventory levels (for both new and existing homes) should provide increased incentives for home builders to increase construction activity this year.

Federal Housing Finance Agency (FHFA): Home Price Index for December 2012

  1. The monthly seasonally adjusted purchase-only house price index for the U.S. has increased for 11 consecutive months on a year-over-year basis.
  2. The 5.8% increase in December was the largest annual gain in home prices since June 2006.
  3. The FHFA house price index in December (193.8) was the highest level for U.S. home prices since November 2011, more than three years ago.

Case-Shiller: Home Price Index for December 2012

  1. Based on the 20-city Case-Shiller price index, December home prices increased by 6.8% from a year earlier, with increases in 19 of 20 cities (only New York showed a minor decrease).
  2. That was the highest annual gain in home prices since a 7.2% increase in July 2007. On a calendar year basis, it was the best gain since 2005 when prices increased 15.5%.
  3. By metro area, double-digit gains in 2012 home prices were common, with the highest home price increases in Phoenix (23%), San Francisco (14.4%), Detroit (13.6%), Las Vegas (12.9%) and Minneapolis (12.2%).

ERI’s cost-of-living data provide local home price sales for homes in desirable locations with amenities suitable for management/professional families. On the heels of the housing recovery, our research staff forecast increases in both company relocation budgets and employee transfer acceptance rates throughout 2013.