At a joint hearing of the Illinois House and Senate Revenue Committees at the State Capitol yesterday, economist Dr. Geoffrey J.D. Hewings presented a report on the status of the Illinois economy, the jobs picture and the important role the housing market plays in the state’s economy. One home sale transaction, for example, has $24,000 in associated fees and taxes plus a ripple effect through many other industries (moving, warehousing, home improvement, retail purchases, etc.) that generates $5.5 billion to the state’s economy. This economic impact was significantly muted during the recession with fewer home sale transactions and less revenues to governments and the allied industries so closely tied to the housing market. Illinois has been in an employment recession for 11 years; the state would need to add 600,000 jobs to reach levels in November 2000.
The special hearing was arranged by the Illinois Association of REALTORS® in cooperation with legislative leaders in the Illinois General Assembly.
Dr. Hewings is director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois at Urbana-Champaign and head of the university’s Department of Economics. Since April 2007, IAR has been working with Dr. Hewings and his team of leading research economists to produce a housing forecast based on Multiple Listing Service sales reported by 35 participating local REALTOR® associations statewide.
In the presentation “State of the Illinois Economy 2011: Connecting the Dots,” Dr. Hewings shared with legislators the challenges the state is facing for a recovery including the:
- role unemployment, loss of tax revenue and unfunded pension liabilities have had on the state;
- level of job growth Illinois needs to see a recovery;
- collaborations Illinois needs to build with its neighboring states; and
- economic impact of the Illinois housing market.
Dr. Hewings spoke for 15 minutes and took questions from legislators for about 40 minutes on topics ranging from how Illinois’ job losses and economy compares to our neighbor states, out-migration patterns for retirees and young professionals seeking jobs, and what will help the housing market.
Dr. Hewings emphasized that low mortgage interest rates are not enough to motivate people to buy houses today. They are starting to buy cars and he sees this as “the ice melting” on a frozen and fearful consumer. Jobs and a stronger economy are the answer.
In closing, Dr. Hewings was asked what are the top issues that will help the economy and what would damage it? Dr. Hewings said: “Doing nothing and not embracing the economy as the most important issue would be the most damaging to the Illinois economy. In every piece of legislation you consider, ask will this bring jobs to Illinois?”