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Real Estate’s Effect on the Oregon Economy
The National Association of Realtors has released its 2008 State-by-State “Economic Impact of Real Estate Activity” Reports. These reports evaluate the total economic impact of real estate related industries on the state economy, as well as the direct and subsequent expenditures that result from a single home sale.
Their net result? The average home sale in Oregon drives an additional $81,600 in state income (presumably most of which is taxable). Here’s their numbers for Oregon (based on 2006 results):
Real Estate’s Economic Contribution in Oregon
The Real Estate Industry accounted for $27,675 million or 18.3% of the Gross State Product in 2006.
Economic Contributions are derived from:
- Home construction
- Real estate brokerage
- Mortgage lending
- Title insurance
- Rental and Leasing
- Home appraisal
- Moving truck service
- Other related activities
When a Home is Sold in Oregon…
Income generated from real estate related industries is: $25,776
Additional expenditure on consumer items such as on furniture, appliances, and paint service is: $5,171
When a Home is Sold in Oregon…
It generates an economic multiplier impact. There is a greater spending at restaurants, sports games, and charity events. The size of this “multiplier” effect is estimated to be: $14,854
Additional home sales induce additional home production. Typically one new home is constructed for every 8 existing home sales. Therefore, for each existing home sale, 1/8 of new home value is added to the economy which is estimate in the state to be: $35,800
The Total Economic Impact of a Typical Home Sale in Oregon
Median Priced Home in Oregon: $286,400
Total Income Derived from a Sale of a Home: $81,601
So, while the market may be going through a necessary correction period, a prolonged slump will create a real drag on the state’s economy.
Data: NAR Research Department, April 2008.
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2 Responses to “Real Estate’s Effect on the Oregon Economy”
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Those are interesting stats, Ron. 18.3% of gross state product is huge. Any idea if that counts the multiplier effect?
If I can find some time, I’d like to correlate with numbers from the state…if they exist.