Home Sales Drive Economy
Home sales drive local economies in a large number of ways, including home construction, mortgage lending, real estate brokerage, title insurance fees, appraisal work and moving expenses. Income generated from home sales in the state of Nevada alone averages $8,122 for each home that is sold, according to the National Association of Realtors.
Other additional expenses like new furniture purchases, new appliances and remodeling also contribute to the economy an average of $12,492 for each re-sale home that is sold. When a home or condominium is sold in Las Vegas it generates an economic multiplier impact, creating greater spending at restaurants, casinos, sporting and entertainment venues and charity events. The multiplier also produces more new home construction and pressures the local community to modernize with new building conveniences that attract more residents and visitors.
Since Las Vegas is a world class destination for entertainment and gaming, the valley is growing at a much higher rate than many regions of the U.S. following the global financial crisis and the future appears promising, with robust growth, including a large concentration of new home developments on the north side.
The median priced home is currently about $200,000 in the Las Vegas area and the economic impact from the sale of a home is hardly recognized by most consumers since the money is spent in the community with little fanfare. Homeowners go on about their daily lives with little realization that the housing market is responsible for as much as 32% of the economy depending upon which study is consulted. This chunk represents a major part of the local economy with the Las Vegas metropolitan area currently housing 2.5-million residents.
Lower home prices and foreclosures triggered a large volume of sales in 2012 and 2013 and near record low mortgage rates offered by lenders should continue to sustain a healthy volume of home sales in Las Vegas for years to come. Projections by state and local agencies show that the Las Vegas metropolitan area should grow by more than 250,000 over the next decade.
The total income derived from the sale of a home was an average of $42,393 in 2012, the last year for which figures were available, according to the NAR Bureau of Economic Analysis. Like home prices, those figures rise and fall as the economy changes, but with more consumers going back to work in the Las Vegas region, home prices and the amount of money contributed to the local economy is destine to increase.