Looking at the current state of the U.S. real estate market, the conversation quickly turns to historically low inventories, increasing sale prices and not enough construction to meet demand.
But that’s not the whole story. Outside major metropolitan areas, when a large employer closes down or relocates to a big city, it tends to leave collateral damage in its wake. Populations decline as residents move elsewhere for work, property values can drop as a result of the decrease in demand and other businesses suffer from a lack of customers.
Especially when faced with the possibility that it may be your employer moving out of town, the prospect of a drop in home values or demand can be scary.
However, the loss of a major employer in town doesn’t have to spell doom for a small city or town, nor does it guarantee you’ll be dealing with plummeting property values – at least not more so than other small-town real estate markets facing general population decline.
“Every little town is different,” says Scott Rodgers, a Realtor and owner of Rodgers Real Estate Group, a part of Re/Max in Peoria, Illinois. “Some towns and areas, the prices have dropped more than others. Some haven’t dropped at all.”
Peoria made headlines earlier this year following the announcement that construction equipment company Caterpillar, long headquartered in Peoria, would be relocating to the Chicago area.
While Caterpillar’s executives have been relocating up to the Chicago area, the engineering and production jobs are remaining in Peoria. “When the news first came out about Caterpillar, yeah, it was devastating because we didn’t know what was going to happen,” says Laura Booher, a real estate agent with Century 21 Lincoln National Realty in Peoria.
But the mixture of other manufacturers and health care institutions in the area and the fact that Caterpillar's existing manufacturing is staying put for now means “the worldwide economy still has a lot of play in Peoria,” Booher says. While the real estate market has slowed on the higher end, she notes it remains active in the biggest segment – between $120,000 and $150,000.
A town that has already experienced this transition is Paducah, Kentucky. The small city lost a major employer in 2013 when the Paducah Gaseous Diffusion Plant shut down. The plant produced enriched uranium for nuclear reactors beginning in the 1950s.
Whether you’re selling or buying, it’s a good idea to understand the basics of real estate disclosures.
Located along the Ohio River in western Kentucky, Paducah has a population just over 25,000. While the population has consistently declined from its peak of just over 34,000 residents in 1960, local Realtor Ben Sirk, owner of real estate firm Sirk & Company, says Paducah has managed to avoid much of the mass exodus typical of a small town that loses a major employer. Its prime waterway location means major shipping companies have locations or are based in and around Paducah, and Sirk says the shipping industry is the biggest source of employment. As a result, while property sales experienced some aftereffects from the plant shutdown, Sirk says the market has since normalized and median home values continue to grow year to year.
“Being a smaller town, we don’t see a lot of the real highs or the real lows. Fluctuation is a lot more minimal with those ups and downs,” Sirk says.
Towns where the only employer shuts down or leaves may undergo a complete rebranding. Jerome, Arizona, began as a copper mining camp in the 19th century and reached its peak population of 15,000 in the 1920s. Decline in copper demand closed the local mine in 1953, effectively reducing the population to between 50 and 100 shortly thereafter. In recent decades, however, the small population has managed to capitalize off the loss of residents that left the town all but vacant – and the Jerome tourism site marks it as "the largest ghost town in America." With a tourism industry in place, Jerome's population has climbed to 455 residents in 2016, according to the U.S. Census Bureau. Properties currently on the market range between $150,000 and $745,000.
Whether you’re selling because your job’s taking you to a different town or you’re worried for a loss of opportunity in your small town, rest assured that the real estate process largely remains the same. It’s simply a matter of approaching your home sale with the right perspective.
Call a pro first. If you’re concerned about a drop in demand as people move out of town for new job opportunities, taking it on alone can only be more stressful. Sirk stresses that a seasoned real estate agent will have weathered the housing market during a previous economic downturn and will be able to help you manage your expectations as it pertains to the local situation.
Lower your price expectations, though that’s not always the case. As people move out of town, a drop in demand for housing is an obvious side effect. As a result, Rodgers notes: “The prices are going to drop.”
However, that doesn’t mean prices are going to plummet all over town. Both Booher and Sirk point out that while parts of the market have seen some decline or may be staying on the market longer, median sale prices are still going up year-over-year in both Peoria and Paducah.
“The impact that [the Gaseous Diffusion Plant closing] had was minimal, almost to the point that it was not noticeable or felt by the majority of the population, including by the people that bought and sold homes during that period,” Sirk says.
Take advantage of affordability if you’re staying. Where prices do drop, however, it may be a great opportunity to buy a house that's the next step up if you’re staying in town. Booher says the increased number of higher-end homes on the market in Peoria means buyers have the advantage, “giving people the opportunity to move up when they otherwise wouldn’t have been able to.”
Consider holding on. As long as there are other employers in town or nearby, there’s a good chance the town will be able to weather the storm – and therefore no need to flee for fear of plummeting home prices. Weigh the possibility of waiting out the local downturn, then selling once the market has recovered.
Booher recalls previous years in Peoria when Caterpillar or other employers were laying off workers – prompting the joke that the last person out of Peoria should turn the lights off – but it proved to be part of a larger cycle. “We decided to keep the lights on, and we did survive,” she says.
[Read: Maximize Remote Workers' Location.]
Get active in revitalization efforts. If you are willing and able to hold onto your property until you feel more confident in property values, don’t be a passive member of the community. Help spur a faster turnaround by getting involved in city planning, revitalization efforts or advocating for tax incentives to help encourage new employers to open up shop in town.
A May 2015 report from the U.S. Environmental Protection Agency that examined how small towns and cities can rebuild their economies notes that concentrated efforts to encourage rehabilitation of downtown main streets decreased retail vacancies and appeared to bring more interest to the city from businesses and residents alike.
“[Paducah’s] been saved from just going into oblivion, because a lot of these smaller towns just end up wasting away, so we’re hoping ours doesn’t, and so far it’s not,” Sirk says.
Time your listing for a fast sale.
Selling your home quickly not only allows you to move on with your life, it also means fewer days of keeping your home in pristine condition and leaving every time your agent brings prospective buyers for a tour. Real estate information company Zillow crunched data from 2008 to 2016 and found the optimum time to list a home for sale was on a Saturday between May 1 and 15 – at least looking at national numbers. Homes listed during those times sold nine days faster and for 0.8 percent more than the average annual home price, according to Zillow’s analysis. In more moderate climates, the optimum time came in March or April.Timing isn't everything when selling your home.
Timing isn't everything when selling your home.
As you list your home, remember those numbers are historical averages and this spring may be different. "With 3 percent fewer homes on the market than last year, 2017 is shaping up to be another competitive buying season," Zillow chief economist Svenja Gudell said in a news release. "Many homebuyers who started looking for homes in the early spring will still be searching for their dream home months later." But how fast your home actually sells, and at what price, depends on a lot more factors than when you list it. A National Association of Realtors survey published late last year found that the average home was on the market a month in 2016, down from 11 weeks in 2012.
Here are 10 secrets to selling your home faster, no matter when you list it.Take great photos.
Take great photos.
According to an NAR survey, 51 percent of homebuyers found the house they eventually bought online and 95 percent used the internet in their home search. If your listing photos don’t show off the features of your home, prospective buyers may reject it without even taking a tour or going to the open house. Hiring a professional photographer and posting at least 30 photos of your home, inside and out, is a good way to attract a buyer.Clean everything.
(People Images/ Getty Images)
Nothing turns off buyers like a dirty house. Hire a company to deep clean if you can’t do it yourself. That includes washing windows inside and out, removing any clutter and cleaning the garage, basement, baseboards, ceilings and closets – and anywhere else the buyer can see.Depersonalize the home.
Depersonalize the home.
Remove all your family photos and memorabilia. You want buyers to see the house as a home for their family, not yours. Remove political and religious items, your children’s artwork (and everything else) from the refrigerator and anything that marks the house as your territory rather than neutral territory.Let the light in.
Let the light in.
People love light and bright, and the best way to show off your house is to let the sunshine in. Open all the curtains, blinds and shades, and turn lights on in any dark rooms. If your house is on a lockbox and your real estate agent isn’t going to be there to open blinds and turn on lights before showings, leave everything open when you leave for work every morning.Make your home available.
Make your home available.
Buyers like to see homes on their schedule, which often means evenings and weekends. Plus, they want to be able to tour a home soon after they find it online, especially in a hot market where they're competing with other buyers. If your home can be shown with little or no notice, more prospective buyers will see it. If you require 24 hours’ notice, they are likely to see and perhaps choose others homes first.Set the right price.
Set the right price.
No seller wants to leave money on the table, but the strategy of setting an unrealistically high price with the idea you can come down later doesn’t work in real estate. Buyers and their agents have access to more information than ever, and they know what most homes are worth before viewing them. A home that’s overpriced tends to stay on the market longer, even after the price is cut, because buyers think there must be something wrong with it. Set the right price from the beginning, otherwise you might cost yourself precious time and money.Remove excess furniture and clutter.
Remove excess furniture and clutter.
Nothing makes a home seem smaller than too much big furniture. Rent a PODS self-storage container or a storage unit and remove as much furniture as you can. It will immediately make your home seem calmer and larger. Remove knickknacks from all surfaces, pack them away and store the pieces upon which you displayed them. Take a minimalist approach to books, CDs, throw rugs and draperies, and clear off your kitchen and bathroom countertops, even appliances you normally use. If you can remove half the stuff in your closets, that’s even better, because it makes the home’s storage space look more ample.Spread the word.
Spread the word.
Your neighbors are often the best salespeople for your home because they love the neighborhood. Make sure they know your home is for sale and are invited to your open house. Share your listing on social media and ensure your agent does the same. Put flyers on neighborhood bulletin boards and share the news on neighborhood email lists and Facebook groups. If you have the skills, make a video to tell the story of how much you love the house and the neighborhood and put it up on YouTube.Repaint in neutral colors.
Repaint in neutral colors.
A coat of paint will do wonders to freshen up your home, both inside and out. This is the time to paint over your daughter’s purple bedroom and cover up your red dining room accent wall. You want to create a neutral palette where buyers can envision putting their own personal touches. Warm neutrals such as gray, taupe and cream are better than bright white.Spruce up the front of your home.
Spruce up the front of your home.
You’ve heard it 100 times before, and it’s still true: Curb appeal matters. You don’t get a second chance to make a first impression. A new or freshly painted front door, new house numbers and a new mailbox can breathe life into your entryway. Fresh landscaping and flowers in beds or in pots also enhance your home’s first impression. Trim trees and bushes, and pressure wash walkways, patios and decks. Leave the outdoor lights on, too, because prospective buyers may drive by at night.Read More
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at email@example.com.