Before people can move into a new home, they need to buy a new home. For this reason, real estate market trends have a direct impact on moving trends. A look at the current real estate trends shows how they’re driving moving trends.
Buying and Selling Activity
According to the National Association of Realtors (NAR), existing home sales declined for 12 straight months between January 2022 and January 2023, but this trend experienced a sudden reversal in February 2023 when existing home sales rose by 14.5%. This is the largest increase since July 2020. Furthermore, sales were up across the country, with all four regions in the U.S. seeing month-over-month sales increases.
Despite this significant bump in home sales, activity is still down compared to a year before. This is due to the decline in activity that occurred for a full year prior to the recent increase.
What does this mean for the moving industry? When home sales are down, moving activity tends to fall as well. Since the past year has seen reduced home sales, many moving companies have been facing declines in their business. Things may finally be looking up, but home-buying activity is still down compared to a year ago and it’s too early to tell if February was the first sign of a real recovery or an anomaly. There’s reason for moving companies be optimistic, but they still need to be practical about managing their budgets and finding new sources of revenue.
Home Sale Hotspots
Although home sales increased throughout the U.S. in February, some metropolitan areas are seeing more home-buying activity than others.
According to NAR, some areas have a particularly high proportion of new homebuyers. Homeowners who bought a new home in the past year made up:
- 8% of homeowners in the Cheyenne, Wyoming, metro area
- 12% of homeowners in the St. George, Utah, metro area
- 3% of homeowners in the Coeur D’Alene, Idaho, metro area
Some metropolitan areas are seeing much lower home sale activity. According to Realtor.com, home sales have fallen the most in Tucson, Arizona; Las Vegas, Nevada; Charleston, South Carolina; Ventura, California; and Salt Lake City, Utah.
What does this mean for the moving industry? Some areas are seeing higher home sale activity. As a result, these areas may also be seeing more moving activity. This means moving companies may have different experiences in regard to business volume according to where they are based. In addition, changes in moving patterns can have an impact on moving companies. For example, if people suddenly move from California to Idaho, demand for moving trucks leaving California will increase, which can impact availability and pricing.
Housing Prices and Affordability
Housing affordability is another key issue that can impact home sales and moving trends. Rising home prices have made it difficult for many people to afford homes, especially in certain areas.
According to the S&P CoreLogic Case-Shiller Indices, year-over-year U.S. home prices were up by 20.6% in March 2022. Tampa, Phoenix, and Miami saw the largest price hikes – in Tampa, prices were up 34.8%.
More recently, home prices have moderated. In December 2022, year-over-year prices were up 5.8%, compared to an increase of 7.6% in November.
What does this mean for the moving industry? Although price hikes have slowed, some homebuyers may still be priced out of expensive markets, which can impact demand for movers. Higher home prices may also mean homebuyers are maxing out their budgets and may be looking for ways to save money on their moves. This means moving companies will need to show they provide a good value.
The current real estate market has created some challenges for moving companies. Some of the trends of 2022 – including rising home prices and declining home sale activity – appear to be reversing. However, economic uncertainties could impact both the real estate market and the moving industry in the year ahead. For example, a recession could cause housing prices to drop, but it could also negatively impact homebuyers’ capability to qualify for home loans and purchase houses.
Regardless of what the rest of 2023 brings, recent disruptions and real estate market trends mean that moving customers will be looking for good value and security. Moving companies can provide this by partnering with Relocation Insurance Group to offer moving insurance. Become an affiliate.