The availability of jobs directly affect the prices of homes in an area, community or state.
A home costs money to buy and maintain. A regular consumer who buys a home by taking her home loan, expects to be paying off the price of the home for the next several years. Whether this money come from? From the person’s job and his career. So it goes to say that in a place where jobs are in abundance and wealth the employment is increasing, so will the real estate prices. In places that has a healthy employment ratio, more and more people are going to look to purchase a home. This also ties up the factor of availability of jobs to demand and supply. Since more people can afford to buy a home, more people will be targeting similar properties. This means that the home prices in that area are not likely to decline in the future but only increase. The rate of inflation is also something that should be considered hip. A home and its accompanying expenses are one of the biggest sources of expenses that a person is lucky to have. Therefore it stands to reason that the demand for housing and the ability to pay for with our deeply connected to the abundance and quality of jobs in a particular area or community. From an investment point of view, an ideal area to purchase an investment property will be where the job rate is high, there is adequate job diversity and the quality of the jobs being offered is highly as well.
Jobs and employment drive home prices in the following ways.
It is not only about having millions of jobs available in a particular area but also about creation of new jobs. While an area may have existing employment, if there are no new jobs available, it is going to affect the prices of the real estate as well. Job creation is as important to a healthy local real estate market as anything else. Check the unemployment situation and examine how the unemployment rate has changed in recent years. A declining unemployment rate and increasing job growth is usually a pointer towards appreciation of the value of real estate and home property is as well.
Look for a place where there are many different kinds of jobs available rather than a community that is dependent upon two or three companies and businesses. Several smaller towns have a community built around one major manufacturing business or industry. This kind of a scenario is slightly risky because if that business happens to go under, it will hurt several thousand people who are staying nearby who were then have to look somewhere else for their livelihood. With no industry or financial economy to support people, the real estate prices are going to plummet as well. This has happened in several smaller communities that were badly affected when large defense manufacturers and military bases lost many employees due to defense cutbacks. A small town or community being dependent upon just one or two business was a common scenario in the 50s and 60s. These communities thrived and lived happily for several number of years. However, given the volatile economic situation, this kind of situation has become slightly more risky than it used to be before. If you happen to be working for the business or company, you may have no choice but to stay in that area and purchased a home there. However, from the viewpoint of an investment property or purchasing a home when you are not dependent upon that industry or business that is the lifeblood of that community, you might want to look elsewhere.
Quality of jobs
All kinds of jobs are not equal. In some cases, quality does matter over quantity as well. If an area has faster growing jobs in growth industries such as technology, that area is likely to see the job growth in the future. If these areas also offer more high-paying jobs, real estate in that area is expected to appreciate faster. When most of the jobs in a particular community come from the slow-growing or shrinking employment sectors such as farms, small retailers, shoe and apparel manufacturers, real estate prices are not likely to rise in the near future years. In fact the prices in these areas may decline if the number of jobs and employment opportunity happens to decrease.
You can gain access to the data that gives you the perspective on the employment statistics of a particular area by accessing the records of the US Bureau of Labor Statistics which compiles the employment and unemployment records. You can access this information on the Internet through your computer by visiting www.bls.gov or even find the same information in a good local library or chambers of commerce. A real estate agent may also be able to help you locate this information.