Inflation in the Southland: Chamber Economic Update
Inflation in the Southland (Chicago Heights, IL) – This week of June 7th, 2021 marks a milestone in the pandemic’s timeline. Friday, the State of Illinois is set to fully reopen with no restrictions on businesses for the first time since March of 2020. The fallout from shutting down the world economy is still being analyzed as we are now experiencing inflation throughout the economy. In the Southland, there are several areas that have severely impacted. Construction costs are up right now with the costs of wood and other commodities doubling and tripling in price. The Southland has a strong rehab industry in which fix and flips are growing in popularity with entrepreneurs. The recent inflation is causing the costs of rehabs to rise. Some things to watch during the month of June are inflation and the Southland’s housing market.
Inflation
Inflation is: in economics, inflation is a general rise in the price level of an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services.
Inflation is a natural part of a modern economy. When prices rise, our dollars buy less. However, many incomes stagnate during inflationary times causing many to lose buying power during inflation. Many wealth advisors advise their clients to do a number of things to hedge against inflation. One common suggestion is to invest in your home.
Home values in the Southland are on the rise, albeit slower than other parts of Illinois. Investing in your home with much needed updates, repairs, etc. is a normal reaction during inflationary periods. This allows equity to build in your home and your dollars which are now diminishing in purchasing power can be put into an asset that is and will appreciate.
Cash during inflationary times is consistently losing it’s value. Interests rates on savings accounts are at all time lows. This means that many are losing money by holding cash. Many financial experts advise that investing in stocks, bonds, and gold are great ways to fight inflation.
Investing in the stock market is easier than ever now via TD Ameritrade etc. Most retail stock apps no longer charge a trading fee.
Housing Market
The Southland’s housing market is in flux right now with a very limited supply of existing homes and little new construction available. In this environment, sellers enjoy being able to sell their properties rather quickly and at higher prices, however new home buyers are at a disadvantage with very limited options to buy.
This creates opportunities for more investment in new construction as well as rehabs. Modular home construction could be an option to deal with the housing shortage in the Southland.
Many Southland communities are in areas that are designated as special economic incentive areas. Opportunity Zones, Enterprise Zones, Hub Zones, TIF Districts, etc. These incentives are currently under underutilized in the Southland and can provide some huge boosts to the local economy.
Information is key. The need to get economic incentive information in the hands of people who have the capacity to use that info is important. The Southland Chamber will be providing updates on some critical economic incentives that are available in certain Municipalities.
Inflation in the Southland
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