Real Estate, Worker Mobility, and Detroit

There is a page one article in today's NYT by Louis Uchitelle that discusses the effects on worker mobility caused by the downturn in residential real estate.

The rapid decline in housing prices is distorting the normal workings of the American labor market. Mobility opens up job opportunities, allowing workers to go where they are most needed. When housing is not an obstacle, more than five million men and women, nearly 4 percent of the nation’s work force, move annually from one place to another — to a new job after a layoff, or to higher-paying work, or to the next rung in a career, often the goal of a corporate transfer. Or people seek, as in Dr. Morgan’s case, an escape from harsh northern winters.

Now that mobility is increasingly restricted. Unable to sell their homes easily and move on, tens of thousands of people like Mr. Kirkland and Dr. Morgan are making the labor force less flexible just as a weakening economy puts pressure on workers to move to wherever companies are still hiring.

What is also interesting about this article is the mention of Detroit property values, which I've dwelled on before. How can such beautiful, and in some cases historically significant, homes in the Detroit area sell for so little? The article doesn't say much about the Kirkland/Morgan home, which is currently valued at well south of $200K, but it looks to be impressive. Just goes to show you, there are only three things you need to know to value a home: location, location, and location.