Housing’s Share of GDP: 15.5 Percent for the Second Quarter

By Robert Dietz

Housing is an important source of economic growth. As of the second quarter of 2014, housing’s share of gross domestic product (GDP) was 15.5 percent, with home building and remodeling yielding 3.1 percentage points of that total.

Housing-related activities contribute to GDP in two basic ways.

The first is through residential fixed investment (RFI). RFI is effectively the measure of the home building and remodeling contribution to GDP. It includes construction of new single-family and multifamily structures, residential remodeling, production of manufactured homes and brokers’ fees. For the second quarter, RFI was 3.1 percent of the economy.

The RFI component reached a $496 annualized pace during the second quarter. This is the second highest quarterly total for RFI since the middle of 2008. Overall GDP expanded by 4.6 percent for the quarter, with RFI adding 0.27 points of that total.

The second impact of housing on GDP is the measure of housing services, which includes gross rents (including utilities) paid by renters, and owners’ imputed rent (an estimate of how much it would cost to rent owner-occupied units) and utility payments. The inclusion of owners’ imputed rent is necessary from a national income accounting approach because without this measure increases in homeownership would result in declines for GDP. For the second quarter, housing services was 12.4 percent of the economy.

Historically, RFI has averaged roughly 5 percent of GDP while housing services have averaged between 12 percent and 13 percent, for a combined 17 percent to 18 percent of GDP. These shares tend to vary over the business cycle.

View this original post on the NAHB blog, Eye On Housing.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.

Q: What Should I Do to Prepare My Home for Sale?

A: Start by finding out its worth. Contact a real estate agent for a comparative market analysis, an informal estimate of value based on the recent selling price of similar neighborhood properties.  Or get a certified appraiser to provide an appraisal.

Next, get busy working on the home’s appearance.  You want to make sure it is in the best condition possible for showing to prospective buyers so that you can get top dollar.  This means fixing or sprucing up any trouble spots that could deter a buyer, such as squeaky doors, a leaky roof, dirty carpet and walls, and broken windows.

The “curb appeal” of your home is extremely important.  In fact, it is the first impression that buyers form of your property as they drive or walk up.  So make sure the lawn is pristine – the grass cut, debris removed, garden beds free of weeds, and hedges trimmed.

The trick is not to overspend on pre-sale repairs and fix-ups, especially if there are few homes on the market but many buyers competing for them.  On the other hand, making such repairs may be the only way to sell your home in a down market.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.

U.S. Waterfront Home Values Twice as High as Overall Home Values

Nationwide, the typical oceanfront or lakefront, single-family home is worth more than double the median value of all homes, and in some communities the median waterfront house could be worth ten or more times the median value of non-waterfront houses, according to a new analysis by Zillow®. In the U.S. at the time of this analysis, the median single-family home was worth about $171,600, while the median waterfront house was valued at $370,900, a waterfront premium of 116.1 percent.

Among large cities analyzed, the biggest difference between median non-waterfront single-family home values and median waterfront house values are in Tampa, Fla. (waterfront premium of 733 percent); Honolulu, Hawaii (waterfront premium of 334.5 percent) and Long Beach, Calif. (waterfront premium of 321.6 percent).

“The allure of ocean and lakefront living is powerful and undeniable, and millions of homeowners nationwide dream of one day owning a home on the water. But those dreams come at a price,” says Zillow Chief Economist Dr. Stan Humphries. “Waterfront properties are both relatively scarce and highly coveted, and that high demand and limited supply leads to higher home prices. Additionally, added insurance, floods, environmental mitigation and infrastructure costs are often part of the tab when buying a waterfront home. Still, as long as buyers understand the added costs and potential headaches, waterfront living is likely to remain one of life’s simple pleasures for many, many years to come.”

The median waterfront home value is calculated in the same way as the Zillow Home Value Index, and represents the median value of all single-family waterfront homes in a given community. The index includes single-family homes located 150 feet or closer to the waterline of an ocean or lakes with a total combined size of 10 square kilometers or greater. Properties separated from direct waterfront by a road with a speed limit of 25mph or less are also considered waterfront. Riverfront properties were not included in this analysis, nor were condominium or co-op housing units. Zillow’s initial analysis covers 250 cities and towns nationwide with at least 100 waterfront homes meeting the above criteria.

Information on all 250 cities analyzed can be found on Zillow Research here.

Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907

Reprinted with permission from RISMedia. ©2014. All rights reserved.

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