How often do people move? The consensus is that people move every five years and that 40 million Americans move every summer. Although these numbers depend on the state of the economy, they have risen in the last few decades.
We have always been a country of movers. Moving is as American as apple pie. It's increased in the last generation or two, perhaps because of the shift in the economy from the Rust Belt to Silicon Valley, combined with the divorce rate doubling in the last 30 years. Divorces, of course, trigger a lot of moves and sometimes moves can actually trigger divorces.
But when there’s a collapse, homeowners are less likely to move as their home has lost its value and they can’t upgrade to a better home or afford to move to a new one. Also, companies are less likely to pay for employees to relocate.
Then again, if a home has lost value and homeowners have less equity in the home than what they owe, some are likely to just walk away and send the keys back to the lender. It’s better for everyone in the country to stay in their homes if they can work a payment system that’s fair.
For example, the government takes in more taxes when more property is owned. But we too benefit from property taxes – they pay for roads, schools, police and fire departments. The taxes pay for safety and security, which is highly important, especially in urban areas. If there’s less money to pay for police and crime goes up, the housing market will suffer because people won’t want to live in those areas anymore. This is one reason lenders and the government should work together to stave off foreclosures and bankruptcies.
What’s interesting is if homeowners don’t move now, you can’t take advantage of the lower property prices in other areas. So, in some ways there’s a bit of a catch: when prices are up you can get more for the property you’re trying to sell, but when home values are down, then you can’t get as much but you also don’t have to pay as much for the new property.
The ideal situation is to have purchased property located in an area that’s not overgrown and that has long-term growth potential, which can be indicated, for example, by increasing jobs opportunities. During an economic downturn, though, it can be tough. The best option buyers can take is to wait out the downturn if they wish to sell and take advantage of bargains elsewhere. But the flipside is that real estate investor vultures (many of which are foreign) are supposedly swooping down and buying up foreclosures in Florida.
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