Real estate plays vital role in Utah's economy-President's message
Real estate plays vital role in
economy
President’s Message
Chris Sloan
This week I had the opportunity
of attending the inauguration ceremony for Utah’s new governor, Gary
Herbert. Not only was the event an opportunity to celebrate a milestone in the
state’s history, but it was also a chance to glimpse where
Herbert’s leadership will take us in the coming months and years.
During his speech, Herbert outlined his three top
priorities as governor: jobs, education and energy. For me as a Realtor, the
message was particularly meaningful because employment plays such a crucial
role as families work to obtain and sustain homeownership. Not surprisingly, a
new study from the National Association of Realtors found that 83 percent of
Americans see job layoffs and unemployment as barriers to homeownership.
While the real estate market is showing signs of
stabilization (preliminary data indicates that year-over-year Wasatch Front
home sales in July are up for the second consecutive month), the economy will
play a key role in sustaining the recovery and giving Utahns confidence in
their employment so they can feel comfortable about buying a home.
Health in the real estate sector will also lead to the
creation of more jobs. For every home that is sold, a variety of other jobs and
businesses also generate revenue, from the timber manufacturer all the way to
the furniture store. Statistics from the state’s recent Home Run program
illustrate this point well since the 1,647 homes sold created 7,305 jobs,
produced $239.9 million in wages and generated 20 million in taxes.
I applaud our new governor’s efforts to help the
economy, and I am confident his work to create new jobs will give Utahns the
confidence they need to purchase a home, which will in turn spur the creation
of even more jobs.
Like homeownership’s connection to the economy,
it also plays a role in Herbert’s second priority: educational
achievement. A 2001 Harvard Joint Center for Housing Studies paper reported
that the children of owners achieved math scores up to 9 percent higher than
the children of renters, reading scores up to 7 percent higher and reductions
in behavioral problems of up to 3 percent.
Part of the reason for the improved scores may be the
fact that homeownership provides stability. Homeowners typically stay in their
home for 12 years whereas renters stay no more than three years, according to
the U.S. Census American Housing Surveys.
Although not mentioned in Herbert’s speech,
other public priorities can also be served by homeownership. Studies show that
crime rates are lower in owner communities, and homeowners are 28 percent more
likely to improve their home and 10 percent more likely to participate in
solving local problems.
Homeownership also serves as a forced savings plan,
helping individuals and couples so they don’t have to worry about paying
rent when they retire. A 2004 study by Harvard’s Joint Center for Housing
Studies found that the net wealth of homeowners was substantially higher than
that of renters with comparable incomes. In certain income categories,
homeowners had a median net wealth 81 times greater than that of renters. Even
with the recent drop in home values, 83 percent of Americans are confident that
purchasing a home is a good financial decision, according to the recent NAR
study.
Because of its many benefits, homeownership is an
investment in our future. It provides shelter and security, fosters involvement
in community, and provides economic and social benefits. I am thankful for our
new governor for his commitment to supporting the economy and ultimately
homeownership.