Note to Local Leaders: Real Estate is an Essential Service
ORLANDO, Fla. – Life’s basic needs are food, water and a roof over your head, which makes real estate an essential service.
As local and state governments continue to tighten regulations in their fight to minimize new COVID-19 infections, they must decide which community services are essential, so they can allow them to continue. In some cases, such as in Orange County, local leaders deem real estate essential. In other counties and cities, however, local leaders are unsure.
While the mortgage financing market played a role leading to the Great Recession years ago, the real estate market led the U.S. out of earlier recessions. It’s not just because of money that changes hands in a home sale, it’s also the ripple effect as the money generated works its way through the economy.
According to an analysis in 2018 by the National Association of Realtors® (NAR), every Florida home sale has a total estimated impact of $77,858 on the economy. Of that amount, $21,483 goes to the real estate industry, $39,783 to new-home construction and $4,243 to home purchase expenditures. In addition, that money generates an additional $12,348 as it gets re-spent throughout the economy.
“As community builders, Realtors understand the need for social distancing and are dedicated to being part of the solution,” says 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton. “But in many cases, every real estate function can be performed virtually, from home showings to even closings. As the nation strives to find balance between the need for virus containment and minimizing those repercussions that lead to a recession, one solution seems obvious: Protect the real estate industry and keep it functioning at maximum speed.”
National, state and local Realtor associations are advocating for the real estate industry to local governments trying to curb the spread of COVID-19, but they’re not alone. NAR and three other real estate organizations – the American Land Title Association, Mortgage Bankers Association and National Association of Home Builders (NAHB) – signed a joint trade letter saying, “Prior homes have been sold, landlords have been given notice and families need to move – housing and finance are critical infrastructure for these families.”
In another letter spearheaded by NAHB, 90 companies and organizations called on the Department of Homeland Security (DHS) to designate construction of single-family and multifamily housing as an “Essential Infrastructure Business.”
“As housing goes, so goes the economy,” said NAHB Chairman Dean Mon. “Construction of single-family and multifamily housing is essential to the economy and should be allowed to continue under a remain in place order.”
“Housing is currently 14.6% of Gross Domestic Product and a major engine of the economy,” the joint letter to DHS stated. “Keeping the men and women of the industry building must be a priority. If the construction industry and its supply chain is disrupted, it creates a domino effect leading to dire negative economic repercussions for an already-burdened economy.”
© 2020 Florida Realtors®