How Buying or Selling a Home Helps Your Local Economy

The Impact of Home Sales on Local Communities

Buying or selling a home is more than just a financial transaction—it’s a key driver of economic growth in your local community. Whether you're purchasing your first home, selling a property, or upgrading to a new build, your decision has a ripple effect that extends beyond your personal life. Every home sale contributes significantly to the local economy, creating jobs and generating income for a wide range of professionals and businesses.

Each year, the National Association of Realtors (NAR) analyzes the financial impact of home sales. According to their latest findings:

• The sale of an existing home contributes approximately $60,287 to the economy.

• The purchase of a newly built home generates even more economic activity—$125,314 on average.

This financial impact stems from various sources, including real estate commissions, home improvement expenditures, moving costs, and the multiplier effect of home-related purchases. Additionally, new home construction fuels job creation, keeping builders, contractors, and suppliers in business.

For those in Scottsdale, Arizona, the economic benefits of buying and selling real estate are especially significant. With a thriving housing market and high demand for luxury homes, each transaction plays a crucial role in supporting local industries and businesses.

Understanding the Breakdown of a Home Sale’s Economic Impact

To truly grasp how home sales drive economic activity, let’s break down where this financial impact comes from.

1. Income Generated from Real Estate Industries

A large portion of the money generated from a home sale comes from professionals in the real estate industry. This category includes real estate agents, brokers, mortgage lenders, home inspectors, title companies, and moving services.

For example, when a seller lists a property, they typically work with a real estate agent who earns a commission based on the home’s final sale price. That commission then circulates back into the local economy, supporting office staff, marketing teams, and other industry professionals. The same applies to mortgage lenders and title companies—each transaction contributes to the sustainability of these businesses.

For an existing home sale, income generated from real estate-related industries accounts for $35,114, making up 28% of the total economic impact. In new home sales, this number is even higher, as additional professionals like architects, surveyors, and developers become involved.

2. Home-Related Expenditures: Furniture, Remodeling, and More

Once a home is purchased, new homeowners often invest in upgrades, furnishings, and renovations. Whether it’s buying new furniture, upgrading kitchen appliances, or hiring a contractor for remodeling, these expenditures inject money into local businesses.

Home-related spending accounts for $5,620 in an existing home sale, representing 4.5% of the total economic impact. While this may seem like a smaller share, it can be a major boost for furniture stores, home improvement retailers, and skilled laborers like electricians and plumbers.

In Scottsdale, where luxury real estate dominates the market, buyers often invest in high-end upgrades such as smart home technology, energy-efficient appliances, and outdoor living spaces. Sellers, too, make pre-sale improvements, hiring local contractors for staging, painting, and minor renovations to increase their home's marketability.

3. The Multiplier Effect of Housing Expenditures

Real estate transactions don’t just create a one-time financial boost—they have a lasting impact through the multiplier effect. This term refers to the continued economic activity that stems from housing-related expenditures. When homeowners spend money on renovations, for instance, contractors and suppliers earn income, which they then spend on their own needs, further stimulating the local economy.

For existing home sales, this multiplier effect contributes $19,553, or 15.6% of the total economic impact. In new home sales, this effect is even greater, as larger-scale projects create sustained demand for labor and materials.

4. New Home Construction and Job Creation

The most significant financial impact comes from new home construction. Unlike existing home sales, new builds require architects, engineers, construction workers, and material suppliers, generating widespread employment and business opportunities.

Each new home sale contributes an average of $65,027 to the economy—51.9% of the total impact. According to Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), this level of economic activity sustains approximately three full-time jobs per home built for an entire year.

In Scottsdale, where high-end developments and custom homes are in high demand, new home construction is a major economic driver. Luxury communities like Silverleaf and Desert Mountain continue to see growth, attracting buyers who seek modern, high-tech homes with premium amenities. Developers and builders in Scottsdale benefit from this trend, ensuring job stability for those in the construction industry.

The Impact on Buyers and Sellers in Scottsdale, Arizona

Now that we've covered the economic impact of home sales, let's explore what this means specifically for buyers and sellers in Scottsdale.

For Buyers: Supporting Local Businesses While Investing in Your Future

When you purchase a home in Scottsdale, you’re not just making a personal investment—you’re directly supporting the local economy. From hiring real estate agents to working with mortgage lenders and home inspectors, your transaction fuels various industries that rely on a healthy housing market.

Scottsdale’s housing market is known for its diversity, offering everything from modern condos to expansive desert estates. Whether you're purchasing a move-in-ready home, a fixer-upper, or a newly built property, your investment has far-reaching economic effects.

• Move-in-ready homes: Buyers purchasing existing homes contribute to real estate commissions, home improvement spending, and local businesses that specialize in interior design, landscaping, and home services.

• Fixer-uppers: Renovation projects create demand for Scottsdale-based contractors, remodeling companies, and suppliers of high-end fixtures and finishes.

• New construction homes: Buyers who opt for new builds play a key role in job creation for architects, builders, and laborers.

Additionally, Scottsdale’s luxury market attracts affluent buyers who often invest in high-end furnishings, landscaping, and home automation—further boosting local businesses.

For Sellers: Maximizing Home Value While Strengthening the Economy

Sellers in Scottsdale also play an essential role in driving the local economy. Preparing a home for sale often involves hiring contractors for repairs, staging professionals, and photographers for high-quality marketing materials. These services keep local businesses thriving and create opportunities for skilled workers.

Some of the key ways Scottsdale home sellers contribute to economic growth include:

• Pre-sale renovations: Many sellers update kitchens, bathrooms, and outdoor spaces to increase their home’s marketability. This spending supports the construction and home improvement industries.

• Real estate commissions: Agents rely on commissions to support their business operations and employ administrative staff, marketing teams, and transaction coordinators.

• Moving expenses: Hiring Scottsdale-based moving companies and storage services generates additional local revenue.

Furthermore, when a seller moves to a new home—whether within Scottsdale or elsewhere—they initiate another cycle of economic activity, reinforcing the interconnected nature of the housing market.

Scottsdale’s Booming Real Estate Market and Its Role in Economic Growth

Scottsdale’s housing market has seen consistent appreciation, making it an attractive destination for both buyers and sellers. The city’s strong economy, high quality of life, and luxury appeal ensure that real estate transactions continue to play a pivotal role in the region’s financial health.

Over the years, Scottsdale has developed into a hotspot for real estate investment, with demand for high-end homes, second properties, and vacation rentals on the rise. This demand has led to increased home construction, renovations, and real estate services—all of which fuel economic growth.

Several factors contribute to Scottsdale’s thriving market, including:

• Luxury Appeal: Scottsdale is home to exclusive communities like Silverleaf, Gainey Ranch, and DC Ranch, attracting affluent buyers who invest in premium real estate.

• Tourism and Second Homes: Many buyers purchase vacation homes in Scottsdale, boosting local businesses and service industries.

• Job Market and Economy: The city’s economic stability, strong job market, and desirable climate continue to draw new residents, maintaining high demand for housing.

Because of these factors, home sales in Scottsdale are not just about individual transactions—they contribute to the city’s broader economic vitality.

The Broader Impact of Real Estate Transactions on Scottsdale’s Economy

Beyond the direct impact on buyers, sellers, and real estate professionals, home sales influence numerous other sectors. Some of the key areas benefiting from a thriving housing market include:

1. Local Businesses and Retailers

Every home sale brings business to Scottsdale’s furniture stores, appliance retailers, home décor shops, and hardware suppliers. Buyers and sellers often make significant purchases, whether it’s for furnishing a new home, replacing appliances, or upgrading outdoor spaces.

For example, new homeowners frequently shop at local stores for:

• High-end furniture and interior décor

• Smart home technology and security systems

• Outdoor living enhancements like pools, fire pits, and landscaping

Sellers also contribute by making pre-listing improvements, which can involve hiring painters, flooring specialists, and professional cleaners—all of whom benefit from real estate transactions.

2. Contractors and Skilled Tradespeople

The demand for home renovations and repairs provides steady work for Scottsdale-based contractors, electricians, plumbers, and landscapers. Whether a seller is remodeling before listing or a buyer is upgrading after purchase, these projects sustain employment in the skilled trades.

Additionally, the city’s growing interest in sustainable and energy-efficient homes has created opportunities for green builders, solar panel installers, and eco-friendly home designers.

3. Tourism and Short-Term Rentals

Scottsdale is a popular destination for short-term rental investments, with many buyers purchasing homes specifically for Airbnb or VRBO listings. The short-term rental market drives additional economic activity, including:

• Higher demand for property management services

• Increased revenue for local cleaning companies

• More business for tourism-related services such as restaurants, golf courses, and entertainment venues

With Scottsdale’s tourism industry thriving, the intersection of real estate and hospitality continues to fuel the local economy.

4. City Revenue and Public Services

Home sales also generate revenue for Scottsdale’s local government through property taxes, permit fees, and transaction-related charges. These funds help support:

• Infrastructure improvements (roads, parks, public spaces)

• Public schools and educational programs

• Emergency services and law enforcement

By keeping the real estate market active, Scottsdale ensures continued investment in community development and public amenities.

Final Thoughts: Why Your Move Matters

Whether you're buying or selling in Scottsdale, your real estate transaction is more than just a personal milestone—it’s a key driver of local economic growth. Every home sale supports real estate professionals, contractors, small business owners, and city services, making a lasting impact on the community.

For buyers, investing in Scottsdale’s real estate market means contributing to local businesses, job creation, and the city’s overall prosperity. For sellers, preparing a home for sale not only maximizes property value but also stimulates economic activity in multiple sectors.

If you’re considering making a move in Scottsdale, now is a great time to take advantage of the thriving market. Let’s connect and discuss how buying or selling your home can benefit both you and the local economy.

What’s most important to you as you prepare to buy or sell your house this year?