Written by Price Lechleiter
When real estate is discussed, the conversation most often turns to the number of homes sold, the median price in the area, available inventory or pending sales. All of those items and the trends they represent are important, but rarely does anyone
take a look at the overall impact of the real estate market on the economy.
Economic development efforts sometimes overlook the key impact of the housing market.
Let’s take a look at the economic impact of single-family homes in Greater Nashville just so far this year (not even including condominiums) using the number of closings and median prices already reported. Based on the number of homes sold in the first quarter, at the median price reported in each of the first three months of this year, there have been more than $825 million in residential real estate sales in the Greater Nashville area.
In addition to that, whenever someone purchases a home, there is a significant amount of money put into the economy through the add-on purchases such as appliances, furniture, flooring, cabinetry, lighting, window treatments, landscaping, lawn service and much more.
There are several reasons this is so important. First, if there is not a healthy real estate market here, with meaningful inventory choices at a variety of levels, it becomes much more difficult to attract companies and families here. The choices are not just about price. Access to services such as transit, shopping, education and entertainment figures into the equation. Proper planning for housing location and services is critical.
Second, let’s consider the jobs created by housing activity. Realtors, mortgage lenders, builders and developers are all directly connected. But it is also important to remember the jobs related to the manufacture and sale of appliances, furniture and the other items mentioned earlier.
And we have not even mentioned the impact of property taxes as the main resource that funds many of our government services.
All of this is to say, while we enjoy our own homes or like dreaming about the one we want to purchase, the housing market has a major impact beyond the individual purchases. Keeping the housing market active and free of questionable choices by government (like decreasing or removing the mortgage interest deduction or ending FHA, Fannie Mae or Freddie Mac) is important to all of us.
Read full article from The Tennessean: http://www.tennessean.com/apps/pbcs.dll/article?AID=2013304090015&nclick_check=1
