What Will 2020 Bring?

Predictions are always dangerous, and our region, in particular, is often out of sync with other parts of the country, but certain trends seem like fairly safe bets to continue.  One obvious one is the predominance of millennials in the real estate marketplace.  They continue to do things on their own time schedule--they marry later than we did, have children later than we did, and buy houses later than we did.  They also seem free of the stigma of renting, and often prefer to spend their money in other ways.  This makes sense in areas where appreciation has been low, and where it can take a long time to sell something, since they tend to move a lot.  One surprising factoid is that they do buy in the suburbs once they have kids, which many experts thought they wouldn't do.  They do, however, prefer smaller homes on smaller lots, with sidewalks and in walkable neighborhoods.  They also like gray color schemes and soapstone counters, to the boomer off-whites and granite.

The lack of rental stigma carries over into investment real estate.  Younger investors seem to like multifamilies and even single houses for rent, as opposed to the strip centers and office buildings of the boomer generation's investments.  This market continues to be active, especially in light of the many predictors that would indicate a future decline in stock prices.  Bigger investors are also still keen on rental properties, including larger developments.  Warehouses, in addition, are in demand, thanks to online shopping and its concomitant need for shipping locations.

Connecticut is mixed in appreciation growth and in strength of the market in general.  Some places in Fairfield County are popular, while others are not.  New Haven is the epicenter of demand for residential property.  Shorter (and sometimes non-car) commutes and the factors listed above both contribute to that result.  We will have to wait and see what effect tolls have on individual towns and cities, if they ever come to pass. The State's "debt diet" may also come into play, as municipalities lose State financing for improvements and amenities, and local taxes rise.

In conclusion, we are pretty bullish on 2020.  We don't have excess supply in most categories, our distances are small compared to many parts of the country, and cities are thriving in many places.  If Connecticut can manage to raise the rate of job growth, which is close to zero, real estate will only get better as an investment.  We look forward to a year where that can occur!