Knowing how much it costs to rent a U-Haul can help time a bottom in your local housing market.
The moving company charges different rates depending on where you’re going. But some customers may be surprised to learn that the rates are based more on demand than the distance travelled.
People move for a variety of reasons, but most do so for economic reasons. If there are no jobs available or the cost of living is too high in one area, people tend to move to where they at least think the jobs are.
Jobs and wages are also related to housing prices. Actually, the future expectations of good jobs with high wages are needed for a strong housing market; layoffs lead to downward pressure on home prices.
In a perfect world, U-Haul could use its customers to relocate its inventory. Trucks would be delivered to high-demand locations by customers moving from less desirable locations.
It never works this way, so we can use their Web site to price moves and see where the demand is.
For example, we learn that it would cost $841 to rent U-Haul’s smallest truck to relocate from San Francisco to Denver. Those looking to relocate to San Francisco could get the same truck for 30 percent less.
This tells us that there is greater demand to leave San Francisco. We can look at any other pair of cities to see the relative attractiveness of one to the other.
Right now, it seems that the problems in California are causing more people to leave since it costs more to rent a truck from there for almost any destination.
Interestingly, there is also a relationship between U-Haul pricing and the S&P/Case-Shiller Home Price Index. It costs more to leave cities that have experienced large price declines in their housing markets.
Since all real estate is local, you can use this tool for your own city to track the longer term trend. Using an average of rates between five or six cities should help you spot turning points in the economy and in home prices.
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