In our local Quad Cities area, we’ve been fortunate to experience a resilient and diverse housing market.
This quintessential dream does not stop there. It is deeply connected to economic security and, in fact, real estate is often cited as a key economic indicator. The housing market’s performance reflects broader economic trends such as consumer confidence, interest rates and employment levels. When the real estate market thrives, other industries follow, making it a stabilizing force in the economy. Unlike other sectors that are more susceptible to cyclical fluctuations, real estate often maintains its value over time. During economic downturns, property values may dip but generally recover in the long run, providing a cushion against severe economic shocks.
According to an economic impact report released this year by the National Association of REALTORS (NAR), in Arizona, a single home sale in 2022 had a total economic impact of $143,400. This means real estate related industries as well as the expenditures that result from a single home sale, including aspects like home construction costs, real estate brokerage, mortgage lending and title insurance, all generated on average over $140,000 each time a home sold. Not only that, but the income generated by the real estate industry itself amounted to $40,713, constituting 28.4% of the total impact to the state’s economy. And overall, real estate accounted for a remarkable $91.9 billion, or 20% of the gross state product, in 2022.
In our local Quad Cities area, we’ve been fortunate to experience a resilient and diverse housing market. Home sales have consistently maintained their year-over-year stability, reflecting similar steadiness in other aspects of our economy such as employment and income levels. For example, as of July, Yavapai County boasted an unemployment rate of just 4.3%.
Earlier this year, NAR unveiled additional compelling data in its “Wealth Gains by Income and Racial/Ethnic Group” report showcasing the impressive wealth accumulation of homeowners in Prescott over the past decade. Specifically, local homeowners saw their home values appreciate by more than $200,000, surpassing the national average in this category by a significant $60,000 margin. This data emphasized the invaluable role that REALTORS play in facilitating home transactions that not only fulfill housing needs, but also contribute significantly to the creation of generational wealth for their clients.
While homeownership promotes personal wealth development, a thriving real estate market also creates demand for improved infrastructure within our local municipalities. The growth in residential and commercial properties requires investments in roads, utilities and public services. In turn, this need for development creates jobs and enhances the overall quality of life, making regions more attractive for residents and businesses.
We’ve witnessed firsthand the impact of these improvements within our own community, particularly when we see such strides as the improvements to Highway 69 in Prescott and Glassford Hill in Prescott Valley. These infrastructure developments make our beautiful community even more appealing to prospective residents while ensuring the safety and improved quality of life of those currently living here. Moreover, there are ongoing projects aimed at further enhancing our infrastructure. The City of Prescott recently announced the State Route 89 (SR89) Roadway and Infrastructure Improvements Project, which encompasses the construction of sewer infrastructure improvements along SR89 spanning from the Phippen Roundabout to the Willow Lake Road Roundabout, with the potential of additional roadway improvements. Such improvements are intricately linked with the real estate market as infrastructure development and real estate are mutually beneficial to one another.
The importance of real estate in the economy cannot be emphasized enough. It offers individuals a pathway to wealth accumulation while catalyzing improvements in our communities. A consistent real estate market not only signifies a stable economy but actively fuels its long-term prosperity. As we are well aware, the Quad Cities area is an exceptional place to call home, and by engaging in the housing market, we not only secure a place to live but also contribute positively to our local economy. QCBN
By Suzanne Westrum
Suzanne Westrum is the CEO of Prescott Area Association of REALTORS.