Columbia SC There has been a lot in the news about the increase in existing home sales lately. The level of activity in used home sales does not have the same effect on our economy as new home sales do. The sale of an existing home is just the transfer of an existing asset, but the sale does help the economy indirectly.
The current owners will spend money getting their home in sellable condition by painting and cleaning or replacing the carpet. Once a purchase contract is accepted the home inspections are completed by the buyers and a number of repair issues always crop up, and additional work is required before the sale is final. This all stimulates growth for contractors and home remodeling stores. After the new owners move in they typically paint a couple of rooms to their taste, purchase new window treatments, and add some furniture and new appliances. This all sounds good, but it is nothing compared to the economic activity generated by a new home sale.
Not only do new homes need paint on the walls, they need the walls. Plus framing lumber, insulation, electrical wiring, plumbing, wallboard and roofing materials. That means lots of business for a lot of different manufacturers. It also means that those firms have to hire more workers, so the employment effect of new home sales goes well beyond the crews that are actually on the jobsite.
New home sales is the key to watch for in an improving economy. These jobs are not outsourced overseas.
Terry Edwards www.FeaturedColumbiaHomes.com
Existing and New Home Sales
Russell & Jeffcoat Real Estate, Inc.
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