Analysts say that the decline in new home sales is starting to hurt moving businesses, which normally would be starting to hit their peak season at this time of the year. In July of this year, new home sales fell to their lowest level since the government began tracking home sales in 1963. According to the American Moving and Storage Association industry fact sheet, almost 50 percent of residential moves occur when families upgrade their homes (looking for more space) or buy their first home. Now that home sales are down, Americans are moving less, and some moving companies are suffering.
In last week’s Hartford Business Journal, Mark Gagnon, the president of Capitol Moving and Storage of Hartford, commented that the only reason he was still in business was that Capitol has a policy of diversifying. “When I started here years ago, all we did was household and business relocation,” he explained. “We’ve diversified since then, fortunately, and that’s one of the reasons we’re still standing.” Real estate sales in Hartford dropped by 49 percent in July.
Now, in addition to moving households, Capitol also does moving for trade shows and offices, and does specialty moving of fragile electronics.
Not only are fewer families moving, but those who are frequently are renting their own moving trucks and accomplishing a “do it yourself” move.
Earlier in the summer, the Census Bureau reported that more families moved in 2009 than in 2008. But moving rates for 2009 were still low, at around 12.5 percent, up from 11.9 percent in 2008. The statistics for 2010, when they are released, may show a lower moving rate still. When the economy is strong, moving rates tend to range around 15 to 17 percent.
Even in 2009, industry analysts expressed concern that most moves were local, not long-distance, and that families were moving from one rental apartment to another or were moving because of a foreclosure, not because of a new job or economic opportunity. In May, demographer Kenneth Johnson, of the Carsey Institute, who also teaches sociology at the University of New Hampshire in Durham, spoke to the Christian Science Monitor about the trend.
“What the [recession] has done is frozen people in place,” Johnson told the Monitor. “I’ve never seen changes of this magnitude in so short a period: It’s stunning for demographers.”
ElBoghdady, Dina. “New-home sales hit a 40-year low.” The Washington Post. Aug. 25, 2010.
Haq, Husna. “More Americans on the move: why that’s a good thing.” The Christian Science Monitor. May 11, 2010.
Hauser, Christine. “New-home sales declined sharply last month.” The New York Times. Aug. 25, 2010.
Roy, Kathryn M. “Moving companies hurting with real estate slowdown.” The Hartford Business Journal. Aug. 27, 2010.