Editor’s note: Nov. 25 is Small Business Saturday; an opportunity to support the businesses that support our community by sponsoring little league teams and performing arts programs, and attracting visitors who purchase goods and services. Small businesses also support each other, which benefits our local job and real estate markets. Many merchants offer special sales as part of this annual celebration. As a locally-owned business, we encourage our readers to shop local and support our advertisers, on Small Business Saturday and throughout the rest of the year.
This year we have seen major changes in the real estate market. Increased mortgage rates, prices that remain high and increased costs overall have reduced purchasing power for the average individual and even created a lull in home sales. What you may not have considered is how this is affecting your local businesses and why it is important. Although prices in Saucon appear to remain stable, if we don’t support our local businesses we could be on the fast track to a declining local economy, which ultimately affects everyone in the area. There’s no better time to focus on where we spend our money than now, as we enter the holiday season!
A look at key takeaways
Supporting local business and charity does affect real estate prices
- As velocity of money slows, keeping more in the community becomes very important.
- More money in your community means more opportunity for economic development.
- Local businesses rely on your business, and having it means that service will be better.
- Thriving businesses contribute to community stability, and a stable, safe community drives up home values.
What is the velocity of money, and why does it become important?
To put it in its simplest terms, money velocity is how quickly dollars get spent and move through the economy. If money doesn’t move, the economy slows. If it picks up, the economy generally tends to pick up as well. As you can see, the velocity of money in the U.S. has decreased dramatically, but started to pick up as of mid-2021. What becomes important, however, is where we start spending our money. Because even though money is moving, it doesn’t mean it will help our local market.
Why shop locally?
Buying local keeps the money local. Why is that so important? If you buy something from your local farmers market, that farmers market will likely use local contractors. Those local contractors are more likely to use that money to buy local supplies, and those local supplies could be bought from local manufacturers. See the cycle? Every person in the chain is local and supports local employees, local job creation and development of the local economy. A strong local economy brings in more talent, more growth, more safety, a greater sense of community and more desirable neighborhoods. As a result, property values will flourish. If that money leaves the area, it may never come back, especially if the velocity of the money being spent slows down.
So, we know it’s important to shop locally, but how many small businesses are actually around?
Did you know that nine out of 10 businesses in the Lehigh Valley employ fewer than 100 people? That’s right, 90 percent! The Lehigh Valley touts having over 15,000 businesses that call our area home, which would make over 13,000 of them small, locally-owned businesses. These businesses aren’t just your locally-owned pizza shops and salons, either. Here in the valley, we have businesses ranging from aluminum investment casting manufacturers to small technical scientific firms, and everything in between. We even have programs from some of our universities such as Lehigh that provide free resources to help you start a business. These services can involve project funding, market research or just opening connections to others with professional experience building and scaling businesses. Understanding and supporting our local small business market is a key factor when determining how strong our market is and helps us to shape a better community.
Things to monitor
If you want to know how your local businesses are doing, get involved! Get involved in your local chamber, volunteer at a local event or just go talk to a local business owner. Every act you take ultimately effects how our community thrives, and when we act in a way to help our local environment, we all reap the benefits.
As we head into the holidays, I encourage you to give thanks to those all around you by supporting your local businesses and donating to your local charities. It not only makes you feel good to do so, but it will also ultimately raise the value of your property!
What this means
For Home Buyers
If you’re looking for a home in the area, I encourage you to start by walking down the main street, checking out the local shops and making some connections! By doing so, you’ll get a better feel for the neighborhood and discover things you may not have thought about. In addition, you may run into someone who’s looking to sell!
If you’re not already supporting your local businesses, you are doing your town and yourself a disservice. Our local business owners are the backbone of our economy and if they don’t thrive, neither will we. The appreciation of home values that we’ve seen these past few years reflects how much we support our businesses and I hope it inspires you to keep the momentum going!
For the investors out there, if you want the local scoop on property values, to find off-market deals and to develop a better understanding of what the future may hold for the area, you should 100 percent be visiting local businesses. They have the “boots on the ground” information you’ll need to know to be a successful investor.