Few things mimic the cycle of life like the housing market. From cradle to grave our demand steadily increases as we mature, from a room, to an apartment, to a house or two, and then shrinking as the nest empties until whatever conveyance is selected for the hereafter.
I can hear you all asking, “How is all this related to this month’s column?” In this instance, it helps gauge the nuances of the overall housing market. It doesn’t take a rocket scientist to see that it remains in a state of depression and is the chief culprit for the current recession.
But pockets of activity exist. Meadowbrook Pointe in Medford, a 288-unit, 55-and-over age restricted community currently under development by the Jericho-based Beechwood Organization, is a good example.
While most planned developments have been shelved for the foreseeable future, Beechwood President Michael Dubb is taking the early bird approach, building in Medford based on several factors.
“Life doesn’t stand still,” said Dubb, “even if buyers have been frozen for the past three or four years.” As a result, there is pent-up demand for the style of housing being developed at his Medford project. That demand is being driven, in part, by the $8,000 federal tax credit for first time homebuyers. They are buying the homes of empty nesters, who in turn downsize and buy homes such as Beechwood’s Medford, Meadowbrook Pointe in Westbury and similar style developments.
Dubb’s Beechwood Organization is the largest developer of residential housing on Long Island, with more than 55 communities built and 5,500 homes to its credit. His moving forward with projects in Medford and Westbury can be strong indicators of market faith.
“From my perspective, a good product sells in both economic upswings and downturns,” he said, noting that he has noticed an up-tick in home sales. “People are selling,” which he again attributed to federal tax credits and other incentives, such as low interest rates, which have been helping to drive what has been a stagnant market.
But that is not to say we are out of the woods, not by a long shot. Dubb noted those same incentives that are propelling the market will become bumps in the road to recovery when they expire and/or are increased. For example, the current deadline for the first time homebuyer tax credit is a closing on or before June 30, 2010.
And interest rates, which have been at historic lows for longer than anyone can remember, could go up based on the state of the economy, which could stymie any progress towards a speedier recovery.
And though there has been much talk about targeting the development of housing in and around downtown areas, Dubb notes that from a planning perspective, it cannot be all or nothing. “The idea of living in a downtown is great for those that want to live in a downtown, but not everyone wants to live in a downtown. We need to make sure we are meeting all the demands of the market. I don’t think we should be dictating how and where people should live,” he explained.
Nonetheless, Dubb remains optimistic. “Food, shelter and clothing are the three basic items people have to have so there will always be demand.” But he is not expecting a return the period from 2000 through 2005, when the housing market experienced record increases in home prices, which helped fuel the bubble and, ultimately, its demise. No, he predicts a return that will be vibrant, but much less volatile.
