By Patty Kelley, president of the Nevada Association of Realtors
I’ve worked in the real estate industry for 35 years and have been honored to preside at various times over the REALTOR® associations for Las Vegas and for all of Nevada. I’ve seen more studies than I can count on how real estate and home ownership contribute to the economy and our quality of life.
But I was still impressed by a report issued recently by National Association of REALTORS® that showed that the real estate industry accounted for more than $23 billion worth of economic activity in Nevada in 2011. That’s roughly 17 percent of Nevada’s gross state product in 2011, the most recent year for which such data is available.
According to the NAR report, a home in Nevada that sold for the 2011 median price of $129,400 has a local economic impact of $45,812.
That figure includes an estimated $11,646 in spending on industries and services related to real estate, another $5,647 in spending on consumer items like furniture, appliances, paint and similar services, plus another $2,732 spent on home remodeling projects within two years after buying a home.
Of course, that spending ripples through the rest of the economy. It generates additional revenue for restaurants, entertainment venues, family activities and more. NAR estimates this “multiplier” effect is about $9,612 for every home sold in the Silver State.
And as more homes are sold, more new homes need to be built to keep up with demand. Typically, for every eight existing homes sold, NAR estimates that one new home is built. So, NAR’s report concludes, every existing home sold in Nevada generates another $16,175 in economic activity – or about one-eighth the value of the typical home sold here.
When you add it all up, you get the $45,812 economic impact mentioned earlier for every single home sold here in Nevada.
It’s worth noting that this economic impact is increasing along with our recently rising home prices. According to the Greater Las Vegas Association of REALTORS®, the median price of a single-family home sold in Southern Nevada is now $150,000, a 24 percent increase from one year ago.
Real estate has and will continue to play a key role in Nevada’s economic recovery. In fact, the NAR report points out that it contributes more to the economy in Nevada than in most states.
In 2006, near the height our most recent housing boom, rental and leasing activities, along with other real estate services and construction, accounted for about 25 percent of Nevada’s gross state product. That put Nevada at the top of the list, along with Florida, of states where real estate had the greatest impact on a state’s economy.
NAR found that real estate’s contribution slipped during the Great Recession. Still, NAR reports that Nevada remains in the top 10 nationally.
If our state’s history is any guide, don’t be surprised if real estate returns to those levels in the near future.
View NAR’s report at http://www.realtor.org/reports/state-by-state-economic-impact-of-real-estate-activity.
About the NVAR
The Nevada Association of REALTORS®is a professional trade association with nearly 14,000 members. NVAR is committed to protecting, promoting and preserving our communities. Visit www.NVAR.org.
About NVAR President Patty Kelley
Before being elected to serve as NVAR’s president for 2013, Kelley was the state association’s president-elect in 2012. She also served as the 2008 president of the Greater Las Vegas Association of REALTORS®. She has worked in the real estate industry for 35 years and runs the Las Vegas-based real estate firm of Kelley & Associates with her husband, Keith.