Ask Mark & Sheila: How Will HP Layoffs Impact Local Housing Market?

Written by Mark T Fiedler - The Mark and Sheila Team
February 15th, 2013

Q: My house has been for sale for a couple months. I’m worried that with the layoff of 200 Hewlett Packard employees the local real estate market will be flooded with competition for me. Am I right to be concerned? Nicki in Northern Meadows.

A: First let us say that our hearts go out to the HP employees that have been laid off or who soon will be. Unfortunately, whenever a large employer has to adjust its workforce, people’s lives change, and sometimes their home will too.

We’ve had some experience with this situation in the past with Intel layoffs of up to 1,000 people. Here’s what happened then: Many of the families where someone was laid off were two income households. Though it may have been tough, there was still income to the family while the laid off party looked for another job locally. In a high percentage of cases, the family stayed in their home. Where a decision was made to sell and move away, it sometimes took a long time to decide, further stretching out the process and lessening the impact on the market.

Some employees were renters on 12 month leases, with others on a month to month basis. They were free to move if necessary when their lease was up. Perhaps a few properties went back on the rental market as a result.
In the case of HP, the layoffs may take until the end of October 2013, so the effect on the real estate market will be spread out. Some employees may move with their jobs, but that number has not been disclosed.

The HP facility in Rio Rancho opened in late 2009. Since home prices in the Rio Rancho area have steadily declined since then, employees who purchased a home then and who did not make a substantial down payment are likely to be upside down (owe more on their mortgage than their home is worth). This could result in some homes being marketed as short sales, some homes being lost to foreclosure, and others being rented to cover the mortgage while the owner moves on.

There are just over 600 single family homes for sale currently in Rio Rancho. Because there are multiple paths people will be taking in dealing with the layoff, and their timetables will de different, our best guess is that the number of homes on the market will potentially increase at most 5% at any one time. This is not a big change and should not impact your sale.

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