One of Connecticut’s fastest-declining demographics may be one that will help keep the housing market afloat in coming years. According to a study released over the summer by the Quincy, Mass.-based Nellie Mae Education Foundation, Connecticut will lose many thousands of young workers with college educations over the next few years.
But across the country, 20-somethings will be among the groups to keep the housing market strong as sales flatten, according to National Association of Realtors Chief Executive Officer Dale Stinton.
It is not all bad news for the Nutmeg State, however. Although young people are leaving New England in search of more affordable housing, older demographics are well represented, and Stinton also classified 60-somethings as another group that will keep the housing market healthy.
“[They] are the fertile markets of the next 10 years,” he said Tuesday at the Boston Convention & Exhibition Center in Boston. His speech was part of a conference held by the Massachusetts Association of Realtors.
Immigrants comprise another such market, according to Stinton. People from foreign countries are holding up the housing market now, and it is expected that, by 2015, 50 percent of home sales will involve an immigrant. That might even happen sooner, Stinton said.
“A big chunk of the buying and selling going on is due to foreigners,” he noted.
Although the market in general is flattening across the country, it remains healthy when kept in perspective, Stinton said. Even in the 1980s, when interest rates reached 18.5 percent, people still bought and sold homes. So the 6 percent or 7 percent interest rates that are now seen in the market do not necessarily have to bring down the market.
“When you come from 12 [percent] and you come from 18 [percent], 6 or 7 [percent] is a comfortable place to be,” Stinton said. “We need to put in perspective the times we’re living in.”
This year is still expected to be the fifth or sixth best year in the last century, according to Stinton. NAR is forecasting 6.3 million sales this year. The record was 7.2 million.
“People still need to move,” he said. “They have to do what they have to do.”
But the changes in the market may be difficult for some newer real estate agents to deal with, Stinton added. In July, NAR’s members surpassed 1.35 million after an influx of members over the past five years. Stinton said he expects that number to drop somewhat next year, but he pointed out that many of the newer members have never experienced a market that is less than record-breaking, and they may find the flattening of the market difficult. He encouraged more experienced Realtors to mentor the newer ones.
‘A War Cry’
Stinton also addressed national policy issues that are affecting Realtors.
He said he expects mortgage-interest deductions to come under attack in the next few years as the federal government will have to come closer to a balanced budget. The mortgage-interest deduction is an $85 billion one, and since the homeownership rate is a healthy 69 percent to 70 percent, it might be tempting to cut it.
“That’s a war cry for us,” Stinton said.
NAR also will continue to fight for legislation that would allow trade and professional associations to negotiate for lower health care costs for their members. Stinton said that 400,000 NAR members currently have no health care. Advocates tried this year, but could not get a vote on proposed legislation in the Senate.
Some form of the bill has been on Capitol Hill for nine years, Stinton noted.
Another way NAR is hoping to get its voice heard is through establishing closer connections with consumers. This year, the association bought database of 1.5 million consumers and asked them to send e-mails to representatives and senators about issues that affected consumers and Realtors.
“It’s time to engage the consumer in a discussion about who’s looking out for their best interests,” Stinton said.
NAR has raised the funding of its public awareness campaign to $40 million.