How Do Home Sales Impact A Local Economy?
- Every time a home is sold, the surrounding economy feels a boost.
- Different industries and businesses benefit at each stage of the process of moving into a home!
- Hawaii leads the way with a $177,000 boost to the local economy.
It stands to reason that the sale of a home would have an impact on it's surrounding economy, but what exactly is that impact? Well, In California, each home sold puts more than $111,000 into the local economy.
Where does this money come from, or go to? Of course there is the potential income to the Home Seller in the form of profit over what they owe vs. the selling price, and that profit either goes into a Seller's reserves, or is used to purchase a replacement property, generating more income for the area. Additionally the commissions paid to Real Estate Agents creates incomes for these agents, their support staff and brokerages as well as their vendors.
Another avenue of economic impact are all those services and products related to moving or taking possession of a new property, such as handymen, contractors, painters and building supply stores.
It's easy to look at a rising Real Estate Market, like we have now, and see only the individual homeowner as benefiting from an increased home value, but in reality the benefit starts there and flows all the way down to the clerks manning local businesses. Even in an economy as large as California's this translates to an estimated $46.1Billion impact to our economy. (Based on $111,000 multiplied by the an actual number of escrows closed in 2014: 415,000). This number will predictably be higher as we close out 2015, because not only have home prices risen, but the number of escrows closed is up about 15% in 2015 when compared to the same time last year. This translates into an estimated $53Billion boost to California's economy.
