| Wow, that’s an exciting headline. Million dollar homes, homes; plural that is, are being sold. Right here in Ada County. Since January of this year three homes priced a million dollar plus have sold here. Three more have accepted offers and are pending. Only one of the homes that sold was a short sale. None were a bank owned property Woohoo. One a month is pretty exciting. More importantly we having been selling about 1 per month since January of 2012. Of those two were a short sale.
Why is that exciting you ask? Well I’ll tell you. For every two home sales we have (based on a sales price of $173,000) we create 2 jobs. It is great to see that much money being re circulated in our economy. How much money you ask? A bunch, heck two jobs were created. For those who want to crunch the numbers at the end of this article is the math presented by the National Association of Realtors.
When a home is sold in Idaho:
- $10,386 of income is generated from real estate related industries.
- $5,647 is spent on consumer items such as furniture, appliances, and paint service.
- $2,437 is spent on remodeling within two years of home purchase.
(NAR, see link below)
What’s it like in other States ? Look here: http://www.realtor.org/reports/state-by-state-economic-impact-of-real-estate-activity
Impact of Single Existing Home Purchase
Median Price $173,000
| Real Estate Industries |
Related Industries
(Furniture/Gardening) |
Local Economic
Multiplier |
New Housing
Construction
Inducement |
Total
Contribution |
| $15,570 + |
$5,235 + |
$9,987 + |
$27,738 |
= $58,529 |
GDP can be measured in three ways, one of which is the sum of all income1. Using the income concept and comparing GDP2 to the number of payroll workers in the US3, we find that the average income per employee was $113,000 in 2010.
This is an over-estimation of salary income since income can be earned from profits, rents, and other sources, however this gives us a ceiling to earnings per worker. Survey data show that full time US workers earned a median of $42,400 and average of $57, 4004 in 2009.
Putting these figures together reveals that every two home sales generate one job.
| Income from two home sales: |
$117,058 |
Income from two home sales |
$117,058 |
| Income per worker (GDP/worker): |
$113,000 |
Income per worker
(Average Earnings): |
$57,400 |
| Workers per two home sales: |
1.04 |
Workers per two home sales: |
2.04 |
| Impact => 2 home sales = 1 job |
Impact => 2 home sales = 2 jobs |
1 GDP can also be measured using what is called the expenditure approach or the value added approach. See
http://www.bea.gov/national/pdf/nipa_primer.pdf for details.
2 GDP ranged between $14.4 and $14.9 trillion in 2010 per the Bureau of Economic Analysis.
3 Payroll employment in 2010 ranged between 129 and 130 million per the Bureau of Labor Statistics (BLS)
4 BLS/Census Current Population Survey’s Annual Social and Economic Supplement 2010
Boise area home prices won’t stay this low; with mortgage rates still at historic levels it’s a GREAT time to buy a home in Idaho! I can help you find the homes you are looking for in Boise, Meridian, Star, Eagle and more! Visit my website to start searching on your own or contact me to get the help of a qualified Idaho REALTOR® ! I specialize in homes in Meridian but can help you find the perfect place no matter what city you want to live in!
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