Question

A manufacturing company has announced that the factory will close as of the first of the year, resulting in the layoff of 1,200 people. Because the factory was the main industry for this small town, what is MOST likely to happen to real estate values?

Answer 1

The closure of a manufacturing company and mass layoffs can lead to a decline in real estate values in the affected town.

Step-by-step explanation:

When a manufacturing company closes and causes mass layoffs, it can have a significant impact on the local economy, including real estate values. In this case, since the factory was the main industry for the small town, the closure is likely to lead to a decline in real estate values. This is because with the loss of jobs and economic activity, there will be a decrease in demand for housing, resulting in a surplus of properties on the market.

As a result, the supply and demand balance will shift in favor of buyers, giving them more bargaining power and potentially leading to lower prices. The decrease in real estate values could also affect local businesses, as people may have less disposable income to spend, further impacting the overall economy of the town.