Buyers and sellers obviously understand the importance of the housing market to their overall well-being. But what about those who aren’t currently in the real estate market? Does the health of the housing industry make a difference in their lives?
Indeed, a robust housing market benefits many sectors of the economy. To understand the ripple effect, a recent report from the Colorado Association of Realtors (CAR) broke down the financial impact of a home sale throughout the economy.
When an existing home is sold in Colorado for the median price of $253,300, CAR estimates that an additional $67,310 is generated in the local economy, going to:
- Real estate professionals (lenders, title companies, appraisers, agents): $21,177.
- Spending on furniture, appliances, paint and so on: $4,429
- Spending on restaurants, sports, charity events and other cultural institutions, due to the “multiplier effect”: $12,291.
- Costs associated with new housing. CAR reports that, typically, one new home is built for each existing home sale and that one-eighth of the value of that new home is added to the local economy: $29,413.
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