A local manufacturer recently found a strong candidate for a quality director's job. Trouble was, the man lived in Texas. He feared it could take a year to sell his $325,000 home.
"The candidate wanted the job; he truly did," recalled Eric Kean, a local recruiter with The Lee Group, a search firm. "But it came down to pure economics. The offer was a good offer, but it was just not enough to justify taking that financial risk."
That was in January. The job, Kean said, is still open.
The delicate housing market, he said, is having a "huge impact" on recruiting.
The effect isn't universal, but some other recruiters and companies report longer searches and fewer candidates because of housing concerns.
"People are being much more cautious," said Dave Taylor, who runs D.P. Taylor Staffing, a recruitment firm in Virginia Beach. "Six months ago, I first started hearing applicants tell me, 'I'm not sure I can relocate because of the housing situation that I'm in. I don't want to be stuck with two mortgages or a mortgage and a rent, not knowing how long it's going to take to sell my house.' Or 'I can't sell my house because I'll lose so much money.' "
The National Association of Realtors said Monday that sales of existing homes rose 2.9 percent last month. However, the median sales price for single-family homes fell 8.7 percent, the sharpest drop in four decades.
Challenger, Gray & Christmas Inc., a Chicago consulting firm, conducts a quarterly survey of job hunters. In the last quarter of 2007, it found that 11 percent moved for a new job - the lowest percentage in more than five years.
John Challenger, the firm's chief executive officer, called housing obstacles a "big factor."
The slowdown in job migration, he said, poses dangerous economic repercussions. Employees "are not utilized across the economy as well, or they go through longer periods of unemployment."
For firms, Challenger said, "positions not only go vacant for a longer time," but the eventual hires aren't always the first choice. "They lose the quality of fit because there are fewer people to look at."
Some local companies, though, report little effect on recruitment from housing. They include Norfolk Southern Corp. and Booz Allen Hamilton.
At Northrop Grumman Newport News, "there have been a few instances of candidates declining employment due to the housing market," spokeswoman Jennifer Dellapenta said.
"While the impact is minimal at this time," she wrote in an e-mail, "it is something our recruiters monitor closely."
Universities say it hasn't affected hiring of junior faculty members, who are often renters. At the senior level, some recruited professors have asked for a delayed start date to provide time to sell their houses, said Carl Strikwerda, dean of arts and sciences at the College of William and Mary.
Kean, principal of The Lee Group, an executive search and staffing company with offices in Chesapeake and Newport News, said the housing market "is making positions open much longer than any company would wish for."
Affected sectors include finance, manufacturing and engineering, he said. Geographically, recruiters said, the housing issue is magnified with job candidates in states including California, Florida, Ohio and Michigan, which face a glut of houses on the market or larger-than-average price declines.
One of his clients, Kean says, won't interview candidates who own homes in Michigan "because it's a waste of time."
With positions at the highest echelons, the impact is muted, said Tim McNamara, managing director of Boyden Global Executive Search in Washington. Companies often offer those candidates substantial perks, such as buying their houses in three to six months if they remain unsold.
For hard-to-fill spots, employers have sweetened other moving benefits, said Cris Collie, CEO of Worldwide ERC in Arlington, which helps companies with relocation. They might increase the number of paid trips to visit family at the former location - or the amount of time they pay for temporary housing in the new city.
One side effect for local sellers is an increase in clauses conditioning an offer to buy a house on the successful sale of the current one, said Chuck Halman, managing broker of the Oceanfront office of Rose and Womble Realty.
Old Dominion University economic researchers haven't studied the link between housing and recruitment, Professor Gilbert Yochum said. But he theorized that the area's higher-than-average home prices could pose another recruitment obstacle, unless employers raise wages.
That, too, was an issue for the Texas recruit, Kean said. The man feared he'd pay $200,000 more for a house here.
The sensitive housing market could cut both ways. It might be harder to lure new workers, but it also might be easier to keep employees from straying, said Strikwerda, the W&M dean.
He predicts fewer professors will leave any time soon. "The grass isn't looking greener anymore," Strikwerda said.
Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com
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Gotta Love Realtors
It's Always A Great Time To Buy!!, It's Always A Great Time To Buy!!, It's Always A Great Time To Buy!! (Head ON APPLY Directly to the Forehead)
Just the sales around your
If you want to know why your house value went up, check the recent sale prices around your neighborhood. It's all public record. The national average is useless when determining your house value. The big drops were heavily on the West coast so someone has to be making gains to offset them.
How Odd that My house appreciated..
With the value of the average house falling 8.9% last year, somehow the taxed value of my home jumped 20 thousand dollars OVER WHAT I PAID FOR IT A YEAR AGO! I'd like an explaination of THAT from my elected official who are now taxing me into the stratosphere!!
Concise Illustration
Miranda Mulligan, Congratulations, you managed to say pretty much what the whole problem is, simply, or maybe not so simply... with an illustration. Great Work!
Our labor pool
Moving is traumatic and companies should reconsider moving people around. Its time to open the doors to unrestrited immigration, ellis island style to get the housing going again. Life is about choices...
Bigger issue than before....
...when in the past you could turn your house in 30-90 days and employers would cover that in the relo package, now it can take a year to sell your house and an employer cannot cover that. Things have changed.
House
That's why when you move for a job, you make sure the company will buy the house from you if it doesn't sale within 3 or 6 months. Had a job relocation happen to me and they bought our old house from us when the house couldn't sale. No worries if you know how to negotiate properly.
A company as big as Northrop Grumman can easily buy the new hires house if they are out the area. It shows that the company is committed to the employee for the long term and vice-versa. Common sense to me.
Building has not slowed
In Ocean View building has not slowed down. $300,000 to $500,000 homes continuing to be thrown up. Vacancies and for sale signs are everywhere, but the building continues, and vinyl siding is being thrown on houses that look like they could fall down, and then the price skyrockets for a piece of crud. None of it makes any sense to me, but what do I know, I'm not a Realtor who will tell you whatever you want to hear while he is saying "sign here".
It's always been like that
That's always been an issue when hiring people that must move to take the job. I know people that just ended up renting their old house. If you come from a higher end market, the rent there will pay for a mortgage here.
Huge pool of local talent to choose from.
Why would a manufacturing, or any business, corporation in this area go outside the area to hire? There is a huge pool of extremely qualified candidates right here in Hampton Roads. Retiring military are used to handling business even under high pressure. There are very few of our retiring military that don't hold a degree. Couple that up with the dedication they have and being accustomed to working long hours. They HAVE to pay attention to QUALITY, because theirs (and their whole units) lives do indeed depend on their product. I have to wonder if that manufacturing company looking for the quality director shouldn't be looking for a new CEO or recruitment officer. The best of the best is right under their nose!
The lawyer comment is so true.
Maybe the way to control that is to make the board test harder. That way only the top of the top pass the board and the flounder has to go elsewhere. The finance companies have been working with the realtors too long. Creative financing is what has gotten most people in trouble. Interest only loans and low interest ARM loans used by people speculating that they'll be able to sell a year or two later at a profit, has at last come to stare them in the face. Realtors don't see the damage done to families that make wrong mortgage moves, all they see is that 6 or 7% of the sell price. The banks play along with them, financing the questionable mortgages so they can get the realtors to come to them for the "actually qualified" mortgages."National Association of Realtors said Monday that sales of existing homes rose 2.9 percent last month. However, the median sales price for single-family homes fell 8.7 percent, the sharpest drop in four decades" Is that a 2.9% rise in one month, after falling for how many months? Huge NRA spin there!
whatever
You make a good point about the lawyers. Whenever a country produces more lawyers than engineers or doctors it is in trouble. The state should put a cap on handing out state bar licenses.
good article
People on these boards have been saying since 2005 that the housing prices in this area were not in line with local wages. It is either wages are way too low or prices are inflated. I think it is both. Who can afford a $300,000 house working at a call center? The best way to lure higher caliber corporations here is for the cities to lower the corporate tax. I believe we have a decent talent pool given ODU, NSU, Hampton U., VA Wesleyan, CNU, and William & Mary. If we keep raising taxes this place will look like Detroit or anywhere in Ohio.
Tell us something we don't already know
I don't know what else to say. No "words of wisdom" here....
Capitalism "gone wild". Too bad the folks leading our country are not really affected by all the problems...
Low wages
High health care costs
Job exodus to the third world
Rising college tuition
Insane property taxation
Insane health "care" costs
Idiotic fuel prices
Lawyers
Politicians
Corrupt Local Officials
and the list goes on...