As the new year rolls in, I know I can always count on at least a handful of clients, friends or family members to ask two questions.
- How’s the housing market shaping up for the next year?
- Is now a good time to buy or sell and what will it mean for me if I do?
Unfortunately, realtors can’t predict the future! But, we can look to our local, state and national economies while examining current trends within our community in order to help you make the best decision for you and your family. And, with 2016 being an election year, you can count on the economy and the housing market’s role within it to be a hot topic!
As I’m sure you already know, purchasing a home definitely impacts a homeowner’s financial situation. But, did you also know it greatly impacts your local and national economy?
While you’re building your personal financial portfolio, you’re helping others build theirs. From start to finish, there are typically 26 different services involved in a single real estate transaction! Contractors, movers, and real estate professionals (and their assistants!) all benefit from the process of home buying and selling! And, as an added bonus, you may even continue to use these services long after the transaction has closed.
Your community benefits from homeownership. Through the collection of property taxes, you are helping support infrastructure such as schools, community programs, fire departments and local law-enforcement. All of these things lead to better health, lower crime, higher education rates, increased charitable giving and higher social capital.
Even remodeling has an impact on your local economy. Through the use of local labor and businesses, as well as government related fees and permits, renovations help contribute to a community’s financial well-being. A recent study, conducted by The National Association of Home Builders tracked the one-year impact of residential remodels on the local economy. It concluded that spending one million in remodeling generates an estimated $841,000 in private income and an estimated $71,000 in government revenue while creating an average of 11 local jobs.
Now that we’ve looked at the local picture, let’s take a look at how the housing market affects the national economy.
The GDP (gross domestic product, defined as “the monetary value of all the finished goods and services produced within a country’s borders in a specific time period”) measures how well your country’s economy is faring. Residential investments (home building and renovations) and housing services contribute directly to the GDP. According to the NAHB, housing has contributed to more than 15% of the GDP over the past two years. At this time last year, housing comprised of roughly 15.45% with home building and remodeling making up 3.14% of that number. This also indirectly impact consumer spending. Studies show when homeowners have more expendable income or more access to credit, they tend to buy more goods and services. As we already know, this benefits the overall economy tremendously. And a healthy housing market is a sure sign that your nation’s economy is growing!
Now is the perfect time to buy or sell! When you’re ready to jump into the real estate market, give me a call! I’m here to help you navigate the waters smoothly while getting you into the home of your dreams!
*All information is used with permission from 2016 Buffini & Company. All Rights Reserved.