The Hidden Costs of Moving in 2021
The booming housing market of 2021 has left many homebuyers feeling nostalgic as they fondly recall their past experiences with buying a home. Gone are the days of leisurely comparing homes across multiple visits, paying ask-price (or even getting a deal after the inspection), and a cadence that was tolerable. Nowadays, buyers are feeling frayed at the edges with the pace and high-stakes nature of real estate in 2021. Understandably, it can get a bit overwhelming and sometimes key points of the transition can inadvertently be placed on the backburner.
One element of moving that I like to remind clients about is that they need to forecast appropriately for their upcoming moving expenses. With so much attention being placed on the sale price of the home you’re purchasing, many homeowners underestimate the financial costs of moving. That’s not to say they have neglected these costs, but they might not understand the market dynamics that are in-play this year and how those variances could cost them a premium. Below are some of the most common and overlooked costs of buying a home in San Diego.
Moving Trucks and Shipping Costs:
We all know that there are only a few reasonable options for moving the entirety of your household items from one home to another. If you’re moving to a new home locally, you might be fortunate enough to use your existing vehicles (and those of your most loyal friends), but most of us require a moving truck or container for shipping. No matter if you’re going to hire movers to do-it-all, rent a truck for self-serve moving and packing, or rent a container for shipping, you will be paying a notable premium this year – particularly for out-of-state moves!
A client of mine was moving from 2 states away and he was charged over $4,500 for one PODS shipping container that measured 8’ by 16’ in width and length. I’ll let you figure out how much of your home’s furniture and belongings could fit into one of those containers, but for many households with children, you would require at least 2 to 3 of those. Doing the math, that means you’re looking anywhere from $4,500 to over $13,000 in shipping alone.
This same client also explored residential moving trucks for their trip. While the initial rental fee was more affordable it wasn’t by much when you added up all the associated expenses. Keep in mind that renting a large residential moving truck will also require you to pay for the fuel costs along the journey and any overnight stops you’ll make to break up the drive for a manageable pace. Oftentimes, as my client experienced, they were moving their primary vehicles too. If your household only has two adults and two vehicles, someone else is going to have to drive the moving truck. In my client’s situation, that would have been a family member who they would have had to pay for a flight home after his volunteer service.
While hiring comprehensive movers to pack and transport your homegoods is appealing and the least taxing during a high-stress life-event, they are always the most expensive option, even in normal times. If you’re relocating due to a company move or military permanent change-of-station, that can often be comped by your organization, but for the private buyer that’s often too costly.
According to Matt McCollum, director of business development at HireAHelper.com, the reason these costs are at a premium this year is multifaceted and fluid. With so much relocation occurring across the country, many vendors don’t have the supply of trucks or containers in particular markets. As you can probably imagine, California saw a notable portion of the population relocate out of state this year, which means all of those units are no longer locally accessible. A surprising culprit in this equation is also the freight market, as many online and e-commerce vendors saw surges in customer demand last year and had to rent these vehicles to fulfill their orders.
Depending on your unique situation and needs, one of the above options will likely be acceptable albeit not ideal. One way to save some money is to look for discounts provided by any number of large-scale national organizations you may belong to. Common providers include AAA, AARP, USAA, and most of the insurance providers for your vehicles and home policies. These will often be 10% off, which might not seem like a lot, but it’ll add up and be helpful down the road. Do a search for discounts associated with the organizations you belong to or make an inquiry with your booking agent before you finalize your order (many vendors require the discount at the time of booking). Here are some we’ve seen clients use for PODS that we wanted to share for your use:
- USAA = 10% off moving, 15% off storage
- Allstate = 10% off moving and storage
- Progressive = 10% off moving and storage
- State Farm = 10% off moving and storage
- Military Members = 10% off moving and storage
Rental and Storage Fees:
Remember that sense of nostalgia I mentioned earlier? A common element of home buying from yesteryear that’s hard to come by today includes scheduling your move-out and move-in dates with some congruence. Ideally, you would be able to leave the property you sold and enter into the new home with very few days unaccounted for. However, most homebuyers these days aren’t so fortunate, as they are selling quicker than ever and taking a longer time to find a new property. This means that many homebuyers are forced to bunk with family, find a short-term rental, or AirBnB it. Keep in mind this doesn’t account for your home goods that need storing.
Finding a rental in today’s market is hard! With all the relocations occurring and the rising cost of home ownership, many community members are renting and that means supply is at an all-time low. As you can guess, that means prices for rentals, whether long-term or short, are also at an all-time high. Yahoo! Finance recently shared a report that rental costs are up 5-12% this year, so that should be your barometer for what to expect. Specific to San Diego County, RentData.org confirms that local rent prices are anywhere between $1,478 per month for a studio and up to $3,677 for a 4-bedroom. While there are too many variables to assume what’s best for you and your family with regard to a rental, you shouldn’t expect any bargains this year.
Back to storage fees, using the same client from before as reference, he went with the PODS option, as he was building a new home that wouldn’t be done for 3-4 months. This meant that his family would need to store those items for the duration of the construction process. That added up to around $425 per month per PODS container. If you’re a family of 5 and required three PODS for the move, it would mean you’re paying over $1,200 per month on storage while you wait to move into the new home. Do not assume storage will be easily found or affordable, so plan ahead for this part of the move.
Furniture and Household Items:
Now that you’ve secured your new home and you’re ready to move in, the expenses should stop, right? Unfortunately, that’s not always the case and the biggest factors you’ll need to consider are replacing furniture and restocking your household with daily-use items. I know, I know, you just spent $10,000 on moving your stuff and storing it, so why do you need to consider furniture purchases and other items? Many times this is because the home floor plan you end up with might not be compatible with the existing furniture you’ve relocated with or be right for the new home’s design elements. You’ll often see this with homeowner’s and their sofas, bedroom sets, dining tables, outdoor furniture, and garage items. If you’re able to wait for deals on used items or for holiday sales your wallet will thank you, but some items can’t really be delayed. One way to mitigate this situation is to sell items when you’re moving that likely won’t work in the new home. This will save you on transportation and storage costs by requiring less room and give you some “walking around money” for the move.
Less notable, but still an expense, will be your household items. This can include everything from toilet paper to pantry food items, trash bags in the garage to new hoses for the outdoor spigots. While it would be nice to have packed all those items, most of us get into a purge mode about half-way through the moving process and start wildly donating items we’re over dealing with. Commonly, that will include these “replaceable items” we can get when we land.
While all of these expenses associated with moving can feel a bit daunting, I don’t want them to discourage you. At the end of the day, getting on and staying on the real estate merry-go-round is one of the best vehicles to increase your family’s wealth. As Fox 5 San Diego recently shared, home prices in San Diego County have increased over $100,000 since last year. While we could see some leveling out in the market, I don’t see it falling back to former prices anytime soon!
If you’re planning a move this year contact the team here at Gluch Group San Diego. We have a stellar reputation and want to help you find your perfect home. Call us today 619-285-2301