Did you know that real estate stimulates the economy in multiple ways?
According to the National Association of Realtors (NAR), the real estate industry accounted for $80 billion or 20.5% of the GDP in 2019. The total economic impact of 1 home sale in Colorado was approximately $122,780 in 2019 (NAR).
Real estate helps people and businesses build wealth. It is still considered one of the best long-term investments. As you pay down your mortgage, this increases your equity and subsequently, your wealth. You can take out this equity for other investments or uses. Most people invest in real estate with the belief that it will be worth more later. So when you go to sell, hopefully you will land a profit! There are a number of factors that determine whether you will make a profit or not.
In terms of economic impact, people are more likely to spend when their wealth is increasing. This in turn helps to stimulate the economy.
Purchases related to the transaction of existing home sales are included in GDP. For example, all payments for services rendered, such as those by a real estate agent, home inspector, attorney, or loan originator, are included. These activities involve actual labor hours for the value the service provided adds to the transaction. (Realtor. org)
Real estate also helps to generate jobs. These not only include realtors, but all jobs associated with real estate.
Some examples include:
- title companies
- construction companies
- repair professionals
To see what is happening in Old Farm specifically, visit our Real Estate Page.
While many may be worried about the economy and how real estate will fair, this situation is much different than that of 2008. Real estate stimulates the economy and is still going strong this year! Prices are still going up and we still have a lack of inventory.
The more homes people buy and sell, the more we will help our economy!