Buyers and sellers benefit from home sales, but moving expenses, insurance fees and furniture purchases contribute an added economic impact to businesses throughout Maine.
The total economic impact of a typical home sale in the state amounted to $134,500 in 2021, well above the U.S. average of $113,200 but in the middle of the pack among New England states, according to a report last week from the National Association of Realtors. That’s up from nearly $95,000 before the pandemic in 2019 and almost $114,000 in 2020.
The real estate industry accounted for $14.8 billion or 19.5 percent of Maine’s gross state product last year, making it the biggest contributor to the state’s economic growth.
About 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 sales price was $299,000.
On top of the sale are home construction costs, real estate brokerage fees, lending and title insurance and other expenditures that contribute to the economic effect.
Real estate commissions, fees and moving expenses generally amount to about 9 percent of the median home price, the association said. In Maine, 28 percent of the total economic effect, or $38,153, is from income generated from real estate industries.
Almost 5 percent, or $5,000, is from furniture, remodeling or other expenditures related to home purchases. Some of those expenditures are the result of regrets by homebuyers who purchased too fast or bought homes that were too small, a recent national study found.
Some 15 percent of the economic impact, or $20,713, is from the so-called multiplier effect through which other sectors of the economy get income passed down from a home sale.
The biggest contributor to the economic impact is new home construction, which made up more than 52 percent or $70,654 of the total. Existing home sales stimulate more home production, the association said, with one new home constructed for every six existing home sales.
Among New England states, Massachusetts saw the highest economic impact per home sale at $191,700. New Hampshire and Vermont followed, with Maine next. Rhode Island and Connecticut had the lowest economic impacts.
In all of the New England states and the national average, the real estate economic impact accounted for a big chunk of the gross state product making up at least 16 percent.