I just read that 1 Out of 9 Jobs in Colorado are tied to Real Estate.
The Colorado Association of Realtors® released a report in October of this year (2007) that tracked how the Colorado real estate industry impacts the local economy. These results were tracked from Grand Junction to Pueblo, and included the economic impact of real estate in Colorado Springs. They found that approximately 10.8% of the entire region’s earnings were tied (directly or indirectly) to the Real Estate Industry.
Ultimately, the Colorado real estate industry is larger than the Colorado Tourism industry … and that is even considering that we have some of the BEST Winter AND Summer destinations.
Why is this interesting, especially if I do not live in Colorado?
First, this finding will be relatively true regardless of where you live.
Second, with the recent rising foreclosures nationwide and countless mortgage companies closing their doors, this means that there is a huge chunk of people (in addition to the affected home owners) that are going to be directly affected by the shifting real estate market.
In fact, when the sub-prime market collapsed this last summer, about 130,000 relatively high paying finance-related jobs were lost nationwide.
Now, you have to think about this… Not only are real estate agents, lenders and title/escrow companies affected, but so are inspectors, appraisers, landscapers, contractors and other service providers that depend on the real estate and loan market to make a living.
For example: If a home owner wanted to finish out their basement, they would probably hire an electrician, plumber, contractor, drywall installer, painter, carpet installer, etc., and eventually need an inspector. In many cases, the homeowner would take out a home loan (2nd, HELOC…) to get this job done. To do this, they would need the help of a lender (and possibly their assistant) an underwriter and a title/escrow company (and all the people involved on that end). With the restructuring of the loan industry, this homeowner may not be able to get a loan, and therefore could not finish their basement … creating one LESS job for all those people who would have been needed to get that job done.
This example is even in addition to the business that is “lost” when fewer new homes are being built and fewer resale homes are being sold.
And what about super-auxiliary businesses that will be affected? The CAR report also brought up the impact on furniture stores, electronics and appliance stores…
The effects are far reaching, but not bad.
“Not bad? Not bad, you say? What is wrong with you, Mariana? Have you been reading The Secret too many times again? … ’cause you are off your rocker.”
I know you are thinking it, and you may have even made that weird, wincing “I don’t get you” face while you read it. That’s okay. You just need to think it through with me, here… I am not saying that this “shift” is not going to be DIFFICULT for MANY people. But DIFFICULT is not the same as BAD.
The real estate market IS shifting, and not only do I – the Colorado Springs Realtor® need to adjust how I do business, but this adjustment needs to transcend to MANY different professions. This is opening up a whole new opportunity to strengthen my business alliances. If I can help MY landscaper and MY lender and MY roofer and MY carpet installer figure out how to transition along with this market, I know that, in turn, they will help me as well.
So, yes. This shifting real estate market DOES reach further than JUST real estate, and so should you.
Benn Rosales
October 25, 2007 at 4:46 am
Great breakdown of the economy and the worries many have. The one thing that will pull out the economy is that there were very small pickings in construction, in fact, here in Austin; we had a shortage that led from 3.5 month completion to 6.5. Those numbers will correct. Also, we have so many commercial developments brewing that many of them will also transition. The holidays will bail out the electronics and furniture stores and the list goes on. We won’t really feel these effects until sometime 1st quarter, maybe early 2nd. So you are right to be looking forward, because the dip in the market creates a ripple much like a tsunami several months later.
Mariana
October 25, 2007 at 1:41 pm
Benn- You are right. The ripple effect of this shifting market will be seen for awhile – throughout many industries. However, if we can get ahead of the ball, and maybe even reach out to our alliances in industries who have not quite “felt” it yet (but will) the adjustment time will be much smoother and quicker for everyone involved … maybe a little less of a tsunami.
This market correction is very necessary, though.
Athol Kay
October 25, 2007 at 10:57 pm
I’d want to check into that report a little more. A Realtor Association doing research and announcing that real estate is just the bees knees…
hmmmm
Would you believe the results of a study that a tobacco company did into the effects of smoking?
Did they also say that now was a great time to buy?
Spin! Spin! Spin!
Mariana
October 26, 2007 at 4:52 am
Athol, You make a valid observation, but this report was anything but pro-real estate, actually. It was more focused around how, since the market is doing what it is doing right now, there will be MANY businesses affected – not just agents and lenders.
Jay Thompson
October 26, 2007 at 5:06 am
Does anyone else find the trackback spam as annoying as I do. It seems to have reached a new level of madness lately…
Benn Rosales
October 26, 2007 at 5:15 am
fixed. I may have clicked approve instead of delete. I may be smart, but I’ve yet to reach the level of perfection. totally sucks.
Mariana
October 26, 2007 at 2:57 pm
Thank you.