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Firm Predicts Job Relocation Surge from Former Underwater Borrowers

""Challenger, Gray & Christmas, Inc."":http://www.challengergray.com/, a nationwide outplacement firm, is predicting a relocation surge in 2013 by job-seeking homeowners who are finally able to list their properties.


As home prices improve, more homeowners have been lifted out of negative equity, and thus more free to sell their properties and relocate. According to a recent ""report"":http://dsnews.comarticles/zillow-19m-homeowners-released-from-negative-equity-in-2012-2013-02-21 from ""Zillow"":http://www.zillow.com/, 1.9 million homeowners were freed from negative equity in all of 2012.

""One factor that has kept unemployment rates high has been the inability of underwater homeowners to relocate for employment opportunities. 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,"" said John A. Challenger, the firm's CEO.


According to a December ""report from the Bureau of Labor Statistics"":http://www.bls.gov/news.release/archives/metro_01302013.pdf (BLS), 130 metropolitan 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 below the national average of ""7.9 percent as of January 2013"":http://dsnews.comarticles/jan-unmeployment-rate-up-to-79-economy-adds-157k-jobs-2013-02-01.

""It is likely that employers in these low-unemployment regions are actually struggling to find available workers with the skills need to fill job openings,"" Challenger said.

As for trends the firm is seeing, Challenger says relocation increased for job seekers going through the firm. 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 at 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"":http://www.fhfa.gov/webfiles/24676/2012Q3HPI.pdf (FHFA), and the state also hosts 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, Riverside were among the top metros where the most homeowners were freed from negative equity in 2012.

About Author: Esther Cho


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