How Labor Impacts the Job Market and How it Impacts the Housing Market
Being under-employed, unemployed, or fear of losing your job is not easy. One of the earliest things most people do when they find themselves in one of these circumstances is tighten the strings and decrease their spending. Assuredly, the absolute last thing they may be thinking of is a major purchase such as a house which is just not a responsibility that the majority of people are disposed to take on when they confidence is missing in their financial strength.
Although these type of decisions are made predicated upon an individual's prospects for employment, there's a ripple consequence that happens which has an impact on a broader economy, which includes the housing market. There are three key aspects that shed some light on identifiable ways the employment market has an influence upon the housing marketplace.
Prices of home: A more secure labor market can help with the stabilization of home prices, as there are less people have a risk of having their homes lost through foreclosure. Additionally, improvements in the employment market typically open the door to allow additional first-time homebuyers turning into homeowners. Eventually this is going to help improve home prices.
Sizes of Homes: If you run a business and have a need to hire another employee, during a good strong employment market you may have a need to persuade your top choice. One of the ways you can do that is possibly by offering them a stronger salary. And when someone receives a strong salary, most often one of the very first things they typically think of doing is buying a larger home.
Neighborhood Location: When the employment market is booming, an employer might even have to attract people who now live outside their immediate area to take this job, which is a major reason that housing markets are often so localized. One particular community, city, or state could have a much stronger employment market than in a neighboring region. For this very reason it's extremely important to have an understanding of the job situation in your particular city and state in order to get a strong feeling for the
vitality of the housing marketplace there.
So the key point to remember for 2012 is that every real estate market is local which means that there is going to be tremendous fluctuations across the nation. In locations where the employment market is continuing to struggle, the real estate market there may be in for prolonged struggle also. However the job market is improving for many areas of the nation, and the real estate market in those parts of our nation will follow suit.
Feb 10, 2012