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The Shifting Real Estate Market Reaches Further Than Just Real Estate

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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.

Mariana is a real estate agent and co-owner of the Wagner iTeam with her husband, Derek. She maintains the Colorado Springs Real Estate Connection Blog and is also a real estate technology trainer and coach. Mariana really enjoys helping real estate agents boost their businesses and increase their productivity through effective use of technology. Outside of real estate, blogging and training, she loves spending time with her husband and 2 sons, reading, re-watching Sci-Fi movies and ... long walks on the beach?

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7 Comments

7 Comments

  1. 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.

  2. 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.

  3. 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!

  4. 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.

  5. 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…

  6. 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.

  7. Mariana

    October 26, 2007 at 2:57 pm

    Thank you.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

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gas-tax

Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

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Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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