Trulia: Job Growth Aids Asking Home Prices, Creates New Households

Jobs, housing activity and home prices are irrevocably intertwined. Recent reports indicating the job picture keeps getting better has fueled a housing recovery (finally).

Investors, standing on the “sidelines” during and after the recession, are back in the game. However, investor return to the real estate market is only part of the story. The increasing number of stable jobs is providing a dramatic boost to the formerly moribund housing market.

More jobs start a chain reaction with multiple components.

  • Job growth renews consumer confidence in the economy.
  • Employment translates to increased spending power.
  • Good jobs offer feelings of security and stability.
  • Potential buyers feel safer in purchasing homes.
  • More buyers translates into higher home prices.

New households need to outfit their homes. This means more spending. More spending means even additional jobs. This is how a free economy works and strengthens. Increasing consumer confidence usually must come first.

As consumer confidence increases, the home buying market historically follows with its own impressive increase. This is a much more stable condition than depending on investors to generate these higher prices. Why? Investors come in and go out of the housing market regularly. As they sell and generate profits, they seldom have the long-term stability of family home purchasers.

Cary Amo, representing Sotheby’s International Realty, focuses on LaFayette and surrounding areas, keeping up-to-date on asking home prices and helping create new households. But, remember —

More jobs equal more home sales. More home sales equal higher prices. More households equal more spending. More spending translates to a stronger economy. But, it all starts with more jobs.

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