I recently attended the International Retained Search Association conference and attended a presentation on relocation trends that I found to be very insightful.  Here are a few facts on relocation trends:

1. The number of homes sold from 2005-2007 declined from 7.1M to 6.46M to 5.62M respectively.  Those drops reflect a 10% drop in 2006 and 13% drop in 2007.
2. The existing home inventory has increased to a 10.3 month supply, which represents an increase of 129% over the supply levels in 2005 (4.5 months).
3. The sheer number of unsold houses now stands at 4.4M vs. 2.9M in 2005, a 52% increase.
4. Nationally, the median home price has declined 5.8%, although the individual market declines have significant variance.
5. Smaller markets tend to have held prices steady or continued growing.
6. The Carolinas, which are the most active states for in-bound relocation, have decreased home prices by an average of 15%.
7. Michigan, New York and New Jersey, which represent the top three outbound relocation states have had declines of home values of 3% (MI) to 9% (NY, NJ).
8. The forecast is for home sales to drop an additional 5% in 2008 and then rebound in the third quarter.  (Dr. Lawrence Yun, National Association of Realtors Chief Economist)
9. The number of days for a new employee to report to their new location has increased from 25 days to 31.
10. The total cost of relocation for a new employee is $55,165.
11. The total cost for a current employee is $62,185.
12. The relocation cost for a new renter is $16,177.
13. The number one reason for candidates to reject an offer which requires relocation is the slowed appreciation in value of their current home.
14. Candidates are looking for relocation package to include:
    a.  Home buyouts
    b.  Delayed starts accommodating the time and expense of relocation
    c.  Real estate costs covered and grossed up for tax purposes   

The net effect of the above is that attracting quality talent is more difficult and more expensive for companies, if the talent can't be sourced locally.

Relocation represents one of the top most stressful events for people, as does changing jobs.  Our approach is to help candidates and clients become more fully grounded in real numbers and data before they make a decision.  'Averages' are just that, they never reflect the actual impact on any singular individual.  As such, using internet data to calculate cost of living variances, housing costs, etc. can be very misleading.  Reality occurs when a prospective candidate walks the new area, sees the location, proximity to schools or cultural activities, commute challenges, general quality of life issues, etc.  We try to ground them in financial reality, too.  As an example, moving to an area where housing will double their house costs and increase their mortgage by an additional $200,000 doesn't mean they need to increase their earnings by double.  An additional $200,000 debt costs then less than $15,000/year and usually will be offset by their new compensation plan.

Our advice for clients in this time of housing crisis is as follows: