I am sure by this point we are all knee deep in resolutions that we are all going to follow with the utmost discipline. We’re all going to lose weight, we’re all going to put more in savings, volunteer more and recognize the positive rather than the negative. In essence, we are going to transform from the people we are to those we can be.
The residential real estate market will be trying to do much the same, but unlike most of the New Year’s resolutions that clog the gyms in January, new design parameters the market is experiencing will outlast any loss in enthusiasm. That said, here’s what we have to look forward to in the year 2012.
The Hamptons luxury market will do great. It always does, as will the luxury markets elsewhere in Nassau and Suffolk. Amazing how there’s never a shortage of those with the means to buy a multi-million dollar home, good times or bad.
The rest of the real estate community will have to tough out another difficult year. Like the BP oil spill in the Gulf, the implosion of the financial markets will continue to negatively influence housing. Long Island suffers from the worst foreclosure rate in the state and single-family home prices in nearly all sectors continue to decline. Economists predict home prices will rebound in a year or two, but those increases will be of the one and two percent variety, which, at least from a tax perspective, will be a positive.
Of greater significance, the shift from suburbia’s single-family home model to a multi-unit development model will continue. Studies have shown that more Millennials—those born after 1980—prefer apartments to the white picket fence and Long Island has lots of Millennials it is trying to retain. As a result, the region is part of the national trend that has rental housing far outperforming all other housing types. At the moment, real estate investment trusts that specialize in apartment ownership are some of the best performers on Wall Street.
And in 2012, the transition from single-family to multi-unit development will become more vivid. The smart-growth design model will continue to influence planning as has been witnessed in Patchogue, Riverhead and Glen Cove. On the drawing board is Brookhaven Town’s vision for the “Ronkonkoma Hub” at the Long Island Rail Road’s Ronkonkoma station, while efforts to redevelop the “Hempstead Hub” continue in Nassau, among others.
This is a trend that will continue if for no other reason than it has to. In addition to its evolving housing tastes, Long Island is running out of land. Years from now, 2012 may be the year we stopped looking back at the old suburban model and started looking forward toward the new one. And savvy real estate investors and property owners are already choosing their sides.