This graph shows how a home sale benefits Maine’s economy.
Buyers and sellers benefit from home sales, but moving costs, insurance costs and furniture purchases have an additional economic impact on Maine businesses.
According to a report published last week by the National Association of Realtors.
The real estate industry accounted for $14.8 billion or 19.5% of Maine’s gross state product last year, making it the biggest contributor to the economic growth of the state.
Approximately one job is generated for every two home sales, the association said. Some 20,401 existing single-family homes were sold last year, according to the Maine Association of Realtors. The median sale price was $299,000.
In addition to the sale, there are the costs of building the home, real estate brokerage fees, loan and title insurance, and other expenses that contribute to the economic effect.
Real estate commissions, fees and moving costs typically amount to about 9% of the median price of a home, the association said. In Maine, 28% of the total economic effect, or $38,153, comes from revenue generated by real estate industries.
Nearly 5%, or $5,000, comes from furnishings, renovations or other expenses related to buying a home. Some of these expenses are the result of buyer regrets who bought too quickly or bought homes too small, according to a recent national study.
About 15% of the economic impact, or $20,713, comes from what is known as the multiplier effect through which other sectors of the economy get income passed on through the sale of a home.
The largest contributor to the economic impact is new home construction, which accounted for over 52% or $70,654 of the total. Existing home sales are further driving home production, the association said, with one new home built for every six existing home sales.
Among the New England states, Massachusetts saw the highest economic impact per home sale at $191,700. New Hampshire and Vermont followed, followed by Maine. Rhode Island and Connecticut had the lowest economic impacts.
Across all New England states and the national average, the economic impact of real estate accounted for a large portion of the gross state product, at least 16%.