Plan sponsors can help employees who are looking to relocate navigate this important financial decision by providing links to reputable realtor sites, organizing virtual panels, and providing access to trustworthy informational resources and experts that they may need.
It’s clear that COVID-19 will have lasting impacts on the ways in which we navigate society.
Businesses are rethinking their office models, extending work from home options, and even shuttering long-held physical locations. Parents are also debating whether or not it’s safe for their children to return to school, as schools, especially those that have not taken serious measures to protect staff and students, are seeing a spike in coronavirus cases immediately after opening. For example, in Cherokee County, GA, ten schools sent letters home informing parents of a positive COVID test within the school one day after reopening, and 1,200 students and staff in the district are already quarantined.
With so many people at home every day, combined with the highly communicable nature of the virus, it’s no wonder then that there are so many reports of individuals and families looking to move out of densely populated urban areas in both the long- and short-term. Axios is one of many outlets reporting that suburban home sales have skyrocketed as city-dwellers and suburbanites alike are looking for houses with more amenities like pools, larger homes with dual office space, backyards, etc. Adults, they say, are preparing to spend most of their work and leisure time at home for the foreseeable future and are additionally considering the possibility of having their children doing at-home remote education as well.
However, Zillow’s 2020 Urban-Suburban Market Report argues that the story of fearful urbanites fleeing densely populated cities en masse in favor of the more socially distant suburbs is a myth. Instead, their study finds that “suburban housing markets have not strengthened at a disproportionately rapid pace compared to urban markets.” Conflicting reports of urban and suburban migration patterns aside, one thing is clear: it’s a seller’s market. The National Association of Realtors found that this quarter, “median single-family home prices increased year over year in 96% of measured markets—or 174 out of 181,” a trend driven by “historically low” inventory.
For employees looking to move, it’s clearly a good time to put their house on the market--or on Airbnb, if they’re in the right place. As a business that relied on travelers’ freedom of movement, Airbnb was part of the travel industry particularly hard-hit by the coronavirus pandemic. They announced massive layoffs of 1,900 employees (about a quarter of their workforce) in May, and their Q2 reported earnings came out to $335 million with an adjusted loss of $400 million; a staggering 67% dip in revenue from the $1 billion they reported this time last year.  However, as states begin to reopen and lift quarantine orders, we’re now seeing a surge in demand for Airbnb rentals in rural areas, sought after by those who want to go on vacation while minimizing risk. The average Airbnb rental period has gone up from an average of 4.27 to 7.43 days now that the ability to work remotely allows employees to extend their time out of town without having to use precious vacation time.
Plan sponsors can help employees who are looking to relocate navigate this important financial decision by providing links to reputable realtor sites, organizing virtual panels, and providing access to trustworthy informational resources and professionals that they may need, including easily accessible and clear directions on how employees can change their address for tax and payroll purposes. These resources can benefit sellers as well as buyers, those looking to buy who may not be able to find a place that fits their needs, and can also include information on renting in addition to home ownership. Rent is falling in many cities for the first time in decades as landlords try to attract new tenants, andthis includes notorious hotspots like New York City; 34.7% of NYC boroughs saw an 6.7% price drop on average. This trend is further supported by Zillow’s findings, which state that “rents in urban ZIP codes fell more relative to their pre-pandemic trend than in suburban areas, supporting the theory that urban ZIPs were disproportionately affected in the rental market.” Information on rent negotiation, safe apartment viewings, and tenants’ rights in the era of COVID-19 can be particularly helpful for young employees who are less likely to own a home, but will have just as many concerns as homeowners when it comes to moving and safety.
These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.get xpress proposal