With the housing market continuing to strengthen with rising prices and unit sales, the dollar volume of those closed sales in the last year has hit a 5.5 year high, nearly $12 billion. Each sale creates a flurry of economic activity – let’s look at just some of the areas that are often impacted:
- Real estate agents
- Title company employees
- Loan officers
- Home Inspectors
- Home improvement stores
- New construction
Just in real estate commissions alone, there’s probably $300-$400 million that lands in the hands of real estate agents in the Twin Cities, even after the broker has taken their split, and that number is up nearly 60% from its lows in 2011. All told there’s probably more than $1B in revenue earned by people involved along the way. Those people in turn are spending that money on everything the rest of Minnesotans do: food, clothing, housing, etc. So as the housing market has continued to recover, there is real impact to the local economy and of course direct impact to the people involved and their families.
I am not an economist and I made estimates in my numbers above based upon my experiences and judgment. They are estimates only.