Is Real Estate Important?

Of course it is! I'm about to discuss why real estate is so important and what effects it has on the economy.

First things first. Why is real estate so important? Well there's only so much Earth to go around, don't you want to own some of it? Whether you own, rent, leave, or sell, real estate is a part of every person's life. Don Phelan's article Why are Real Estate Values so Important? does a terrific job of explaining how real estate affects everyone. Basically, Phelan explains to a high school business class why one of the students was working less hours than he had three years ago. The student stated that he worked at a restaurant for the past three years where most of the customers worked in construction. Phelan went on to say that "because it costs less for home buyers to buy a foreclosed property really inexpensively and renovate it themselves", trade workers are now out of work because they don't have any homes to build. Because they don't have jobs, they don't have money to come to the restaurant anymore. This is a perfect example of how real estate can affect you even if you're not the one buying or selling a home.

Another reason real estate is so important is it's ability to affect the economy. In the article Homes and Cars Point the Way for the U.S. by Justin Lahart, he discusses why the housing market might be a "brighter spot" in the U.S. Economy. Sales forecasts have increased  since January of this year. Even though these improvements haven't "fed through to other areas of the economy," I believe that in the long run if this trend continues, it will have positive effects on other areas of the economy as well as continued improvement in the housing market.

As we all know, real estate doesn't always 
positively affect the economy. In the article Fed's Q1 Flow of Funds: Household Real Estate Value Increased in Q1 by Bill McBride, he summarizes important points from the Federal Reserve's Flow of Funds Report. The chart that stands out to me most is the Household Real Estate Percent Equity chart (pictured right). As you can see, the biggest decline happened right at the start of 2009, right after the housing bubble burst at the end of 2007. but "in Q1 2012, household percent of equity (of household real estate) was at 40.7%- up rom Q4 and the highest since 2008.

Basically, real estate is important to everyone, whether they know it or not. It might affect how many hours you work, or how well the economy is doing, but no matter what it's affecting, it's ALWAYS affecting you.

Now Let Me Introduce Myself

Carmen Skok, Age 21.

Howdy! I'm Carmen and I am a senior finance major from Houston, Texas. Technically I live about two minutes outside the Houston city limits, but for all intents and purposes I'll just say Houston. 

First things first, I am the proud mother of a beautiful pomeranian. Her name is Muñeca (it means babydoll in Spanish) and she is the love of my life. Some of my friends might tell you that I have an obsession with taking pictures of her, but who wouldn't with a face like that? 

Now you might be wondering where I came up with her name. My mother is actually from Nicaragua, so she decided to give her a name in Spanish. This leads me to my next point. 

Although I may be one of the palest people you will ever meet, I am actually half hispanic (my dad's from Ohio, so I blame him for my whiteness). As I said before my mother is from Nicaragua. Her and my dad met there while he was working with the State Department. Many people don't know where Nicaragua is, but I can tell you it is one of the most beautiful places you will ever go (see picture). I have been going to Nicaragua every summer since I was 8 and I will never get tired of the blue waters, the white sands, or the wonderful culture. Did I mention Nicaragua has the only salt lake in the world with sharks? Also a couple of active volcanoes, but I think I've made my point. 

So basically my hobbies include playing with my dog and traveling. That about sums me up.