What Recent Demographic Changes Mean For Real Estate
Q: Gerald, you said that more than two thirds of NJ households are childless. What does this trend mean for residential real estate? Henry, Montvale, NJ
A: Interesting question, Henry. More childless households means that space requirements for home buyers and renters are smaller, which means lower demand for McMansions and increased demand for condos, town houses and smaller homes. Unfortunately, builders in NJ are not building a lot of small or starter homes because the cost of land and labor are high and because land use laws in NJ make it harder to build. In addition, the length of time it takes to build a home in NJ has increased which increases the cost to builders making it less likely they will build more affordable homes. What we really need is more imaginative land use–more microhousing for example and we need to revise archaic land use laws to incentivize builders to fill the gap in the NJ housing ecosystem by building entry level homes that will be appealing to both first time homeowners as well as older empty nesters.
Thanks for your question, Henry. For more real estate information and tips visit my blog at geraldlucas.com.