Housing Recovery – Economic Recovery
The US housing industry is recovering and that’s good news for the overall US economy.
In 2016, housing (both investment and services) represented 15.6% of the US GDP. But for the previous 60 years, the housing sector averaged nearly 19% of the GDP. (By comparison, the US auto industry only accounts for 3.5% of GDP). The 8 year lag in housing activity has been a critical choke on economic recovery for the country.
Despite the recent increase in interest rates, housing is pointing towards an economic resurgence.
– As of February, the inventory of homes for sale is at a record low.
– As a result of short supply, prices have started to increase. In numerous cities, multiple offers, above asking price, are the new norm.
– A recent University of Michigan survey shows more buyers think this is a good time to buy a home (even more than in 2005).
As housing recovers, new technologies are emerging to help the home buyer. We’ll spotlight two unique ones:
Heat Map – In the 1800s, the value of property was determined in part on access to clean water. The further “downstream” a property was located (with presumably more pollution), the lower its value. While the advent of municipal water systems eliminated the value proposition for clean water access, the US Department of Transportation has identified the impact of noise pollution on property values and health. The new interactive map charts both road and aviation noise. The technology allows home buyers and developers to better assess the relative quiet of a new location. At the same time, it provides governmental agencies a path for reducing noise exposure levels to reduce health risks.
Here’s a view of the noise map for areas around Chicago O’Hare and Midway airports:
Properties in the purple and red areas have the highest noise levels, with an impact on property pricing.
Opendoor – Wanting to sell your home? An online start-up, Opendoor.com, is buying homes, sight unseen, using their proprietary software. A home seller can visit the Opendoor site and request a bid for their home. Opendoor makes a bid based on public information of area home sales and other proprietary data. Operating in just Dallas and Phoenix, the company is buying an average of 10 homes per day. They also offer a 180-point home inspection report to the buyer, as well as a 30-day money-back guarantee.
AKRA Builders began business as a home builder for the Central Illinois region, more than 45 years ago. Moving into the commercial construction arena, AKRA hasn’t lost its residential roots. In fact, many AKRA customers are firms that service and supply the US housing industry.
An improving housing industry and US economy are excellent reasons to review your Building Solutions with AKRA Builders, to maximize your return in the new economy.