Real Estate, Renting and Leasing
“The Real Estate and Rental and Leasing sector comprises establishments primarily engaged in renting, leasing, or otherwise allowing the use of tangible or intangible assets, and establishments providing related services. The significant portion of this sector comprises establishments that rent, lease, or otherwise allow the use of their assets by others. The assets may be tangible, as is the case of real estate and equipment, or intangible, as is the case with patents and trademarks. This sector also includes establishments primarily engaged in managing real estate for others, selling, renting and buying real estate for others, and appraising real estate. These activities are closely related to this sector’s main event, and from a production basis, they include here. Also, a substantial proportion of property management is self-performed by lessors”. (53)
2. Size and/or Growth of Industry
Real state has become one the most popular way to earn income for people that like to invest in property. “Real estate and rental and leasing; mining; and durable goods manufacturing were the leading contributors to the increase in U.S. economic growth in the first quarter of 2017. Overall, 13 of 22 industry groups contributed to the 1.4 percent increase in real GDP
The Real estate market has increase over the past few years, but it unsure if it won’t have a fall due to the increase of interest and the decrease of wage that many states are seeing on their work place.
- Real estate and rental and leasing increased 2.7 percent in the first quarter, after increasing 0.9 percent in the fourth quarter.
- Mining increased 21.6 percent, after increasing 5.2 percent.
- Durable goods manufacturing increased 4.4 percent, after increasing 0.7 percent
3. Macroeconomic Indicator or Policy and Its Importance and Impact
Unemployment can affect the real state market as well as the interest rate. If the Unemployed rate increases a person would not be able to purchase a home because he will not be able to afford it
4. Recent Trend
GDP (gross domestic product) has been growing modestly since 2009 coming out of the Great Recession, but the growth rate is far off its growth from the late 1990s. We’ve had very little overbuilding in real estate in the United States, except for a few areas like expensive apartments and condominiums in high price cities. Other than that, real estate markets remain in check. The continued increase in construction in real estate trades helps support robust economic expansion.”
“Interest rates are one of the important factors in understanding the real estate markets and the economy. Currently, we are in a 30-year downgrade trend in interest rates. It preceded by a 30-year upward trend. Therefore, real estate achieves well as the economy increases. And as rates are to remain low for some time, we expect that this is good for real estate markets.”
Thus, the real estate market can have a decrease in the next couple of years. I believe that the economy has play a big part of whether is increasing or decreasing. The government and the Mortgages companies must come as a team in order to keep interest down, so that people can be able to purchase their dream home.
- “Real Estate and Rental and Leasing Led Growth in the First Quarter.” U.S. Bureau of Economic Analysis (BEA), www.bea.gov/news/blog/2017-07-21/real-estate-and-rental-and-leasing-led-growth-first-quarter.
- Classification Development Branch. “US Census Bureau Site North American Industry Classification System Main Page.” Census Bureau QuickFacts, United States Census Bureau, 2 Nov. 2010, www.census.gov/cgi-bin/sssd/naics/naicsrch?code=53&search=2017%2BNAICS%2BSearch.
- “Real Estate Investment Performance Is Dictated by Economy.” Resource, www.resourcealts.com/insight/economic-indicators-forecast-real-estate-performance/.