By TAMMY JOYNER
The Atlanta Journal-Constitution
Published on: 06/13/07If Conrad Coles had it to do over, he would have factored in the sale of his Hampton home when he took the job he now has in Virginia.

“I would probably have never taken the offer without them buying the house,” said Coles, who left his family in Georgia in April to take a managerial engineering job at Sonoco Products Co. in Richmond.

He figured it’d be a cinch selling his $528,000, five-bedroom home. Two years ago, he sold a half-million-dollar home in Virginia in seven days when he moved to Georgia for a job.

“The market was on fire then,” he said. “The market’s really turned over. It’s a buyer’s market now.”

His current home has been on the market for about nine weeks.

“I just knew it would be gone like that, you know?” Coles said. If it hasn’t sold in another month, Coles said he’ll drop the asking price and double buyer incentives from $5,000 to $10,000. Come September, when school starts in Virginia, the house could be a “deal-breaker” between him and his current employer.

“I’m very concerned. I have a wife and three daughters. I have to be with my family,” said Coles, who has been in temporary housing in Richmond since May 7. Sonoco has given him 45 days in living expenses.

“It’s costing me more just to be here.”

As “For Sale” signs languish longer on lawns around the country, relocating for jobs is getting harder for workers like Coles. And more difficult for companies looking for highly skilled executives.

“It’s not an ideal situation,” said Joe Bottenfield, director of avionics for North America at Barco Inc., a Belgian firm that makes everything from giant screens at sports stadiums to flight simulator panels.

Bottenfield works in Duluth. His family is still in Lancaster County, Pa.

“But it’s almost over with and we’re excited about that,” he said last week when his family arrived in Atlanta to house-hunt.

The Bottenfields recently sold their four-bedroom colonial in Pennsylvania.

“We were fortunate. There are other houses that went on the market before us and still haven’t sold,” Bottenfield said.

Slowdown worse at top

Maureen Young, a Realtor for Coldwell Banker Bullard Realty in Henry County, said she definitely has seen a slowdown, “especially in the higher-end homes.”

She blames it on “instability in the economy and uncertainty in employment,” and other future unknowns.

“People are feeling uncertain about their own jobs and futures,” she added “They’re kind of skittish about moving.”

In extreme cases, job offers are being rejected because people can’t sell their homes or don’t want to risk a big loss if they do.

“There’s kind of a hesitation in the market right now. Homes are staying on the market longer. It’s going to take some time for that to be absorbed,” said Rachel Drew, a research analyst who headed the latest national housing report for the Harvard Joint Center for Housing Studies.

“People are trying to see where everything is going to go.”

So are companies.

Considering it can cost up to $100,000 in today’s market to move a top executive, some businesses are being even more selective about their relocation choices.

“Employers are carrying the burden here,” said Robert Baxter, Atlanta-based senior client partner at Korn/Ferry International, a major search firm. “The big pushback in relocation is the cost to employers.”

Those companies that go after prized executives are responding to a slower housing market with bigger relocation packages, going as far as buying the homes of executives or paying closing costs and other housing-related expenses.

Relatively stable here

While metro Atlanta home sales have slowed, the market remains relatively stable compared to other regions. People want to move here, real estate agents say, but Atlanta is seeing the fallout of housing troubles in other parts of the country.

Nationally, sales of new and existing homes have fallen precipitously from peak levels in 2005, according to Wachovia’s June Housing Chartbook released Friday. The report forecasts continued declines through 2009.

“A lot of people are reluctant to accept a position unless the company is willing to take over the responsibility of selling their house,” said Emory Mulling, chairman of the Mulling Corp., a Dunwoody firm that provides services that include outplacement and career transition, executive coaching and retained search.

In the last nine months, Mulling has seen about a dozen “serious cases” where the fate of job offers hinged on home sales. The executives lived in California, New York, Texas, Illinois and other parts of the Midwest.

“In three cases, the companies agreed to buy the homes when they originally said they wouldn’t,” Mulling said. “Four people declined the offers because the companies wouldn’t buy the house.”

Companies do more

A check of other metro Atlanta recruiters, employers and real estate agents found that companies are using innovative tactics to quell what some call “relocation anxiety”:

• The Home Depot and Coca-Cola Enterprises will buy a crucial employee’s home after a certain period of time. In CCE’s case, it’s 60-90 days. At Home Depot, it’s 90 days. “The change in the housing market has meant the company now has to help our associates more often in disposing of their homes to make the transfer possible,” said Home Depot spokesman Jerry Shields.

• One consumer company accommodated a division president by extending his commute from his home in the Northeast for six months to a year. His home hasn’t sold.

• Another Atlanta company paid $5,000 toward the closing cost on one executive’s home. Still another gave a job candidate a lump sum of money toward moving expenses.

“Most of these assignments are mission critical,” said Dale Jones, an Atlanta-based managing partner for executive search firm Heidrick & Struggles.

“So the softness in the housing market rarely will scuttle the deal, but oftentimes it may delay the deal or cause the deal to be more expensive.”

Despite the national housing slump, metro Atlanta continues to attract people because of affordable homes, weather and other lifestyle issues.

“The Atlanta market is wonderful compared to everyone else,” said Dana Eskridge, vice president of relocation and corporate services at Metro Brokers GMAC Real Estate.

“They’re still coming and they’re still buying,” Eskridge said “They’re just going to have to take their time. They’re not going back or giving up.”

Meanwhile, the Bottenfields seemed close to finding a home here.

By midafternoon Friday, the family had seen about 17 homes. “There’s one that we found up in Chattahoochee River Club that seems to be everyone’s favorite,” Bottenfield said. They had one house left to see.

“Hopefully we can pick one and just go forward.”

TO MOVE OR NOT TO MOVE?

It can cost a company $60,000 to $100,000 to relocate a senior executive and his or her family. Here’s how it typically breaks down:

• Moving expenses

• Househunting trip for spouse.

• Brokerage commission. This is one of the biggest expenses when you consider a 7 percent real estate commission on a half-million dollar home is about $35,000.

• Closing costs.

• Temporary housing. (Typically about six months)

• Taxes

• Miscellaneous or curtain allowance. Amounts to two weeks or a month’s base salary. It’s usually used to help the executive and his family get established in their new home.

By TOM WALKER
The Atlanta Journal-Constitution
Published on: 06/07/07 Sellers dominated the stock market for the second straight day on Wednesday as a hint of wage inflation reinforced earlier investor concerns that Federal Reserve interest rates may not go lower anytime soon.

All the major stock market indexes continued to fall back from Monday’s year-to-date highs. The Dow Jones industrial average fell 129.79 points to 13,465.67, the index’s fourth-biggest daily loss in 2007.

The sell-off started early and continued all day after the government announced that first-quarter nonfarm productivity growth was weaker than originally estimated, while unit labor costs — a measure of wage inflation — were worse than initially projected for the January-March period.

This came a day after news of stronger-than-expected growth in the U.S. nonmanufacturing, or services, sector. Also Tuesday, Fed Chairman Ben Bernanke highlighted his ongoing concern about core inflation, suggesting that the Fed might not lower its federal funds rate as early as Wall Street has forecast.

Treasury prices also fell on Tuesday as bond traders reacted to the same Fed rate concerns, a move that sent short-term Treasury yields to 5 percent — a level attractive to investors and competitive against stocks. On Wednesday, those yields apparently did attract buyers, which had the effect of lowering the yields, which move opposite to price.

Strategists blamed Wednesday’s broad market sell-off on the prospect of rising prices.

“Today’s Labor Department report of higher wage cost and slower productivity growth added to the market’s concern that inflationary pressures may be rising,” said Phil Larkins, senior portfolio manager for Northern Trust-Atlanta.

As for the bond market, Larkins said yields that go “too much above 5 percent” may prompt investors to take “a fresh look at their asset allocation to determine if they might switch some assets out of stocks and into fixed-income assets.”

Analysts at UBS Investment Research somewhat tempered Wednesday’s productivity and wage revisions. The downward revision in productivity — to 1 percent annually from the initial 1.7 percent — “appears to largely reflect the cyclical downturn in housing,” the analysts said in a client message.

Meanwhile, the increase in unit labor costs to 1.8 percent from the original 0.6 percent may reflect changes in the timing of year-end bonuses by companies to workers, exaggerating the strength of the fourth quarter, UBS said.

The market’s two-day dip is the first setback for the Standard & Poor’s 500-stock index since it broke above its previous 2000 high to close at a record on May 30, after which it posted three additional highs.

The Dow, meanwhile, has become more volatile since its 416-point one-day loss on Feb. 27. The Dow has posted four daily losses of more than 100 points.