Five for Real Estate 121
s we continue to redefine the very notion of “value” in this uncertain economy, and with protesters angry at just about everything, it’s hard to think of a single segment of business more affected by talk of a triple dip272 than real estate. How we work, live and define home will continue to shift in 2012, with many trends on the horizon that will change real estate. One trend we’ve been tracking for a while is the notion of renters envy, but don’t think that a monthly lease is necessarily the way to go. True, the renters market in cities such as New York is exploding, but Moody’s Analytic Data shows it makes more sense to buy again, as the ratio of house prices to yearly rents is almost back to its pre-bubble average. Houses are also more affordable now273 than they’ve been in the last 40 years, thanks to ultralow mortgage rates. (Needless to say, though, the rent cycle will continue for quite some time as many in the workforce who have been laid off are stuck with a mortgage they can’t afford and often turn to renters to help pay their mortgage when they have to move to another city in search of a job.) Real estate will get gray this year as more and more boomers transform the very notion of home in 2012. The senior population is growing rapidly, but demand for senior housing exceeds the capital needed to build such units. Moreover, many boomers would rather move in with their families to not only save money but also be around the ones they love and stay away from old-age homes that make them feel, well, old. And because today’s boomers are healthier and more fit and young at heart than seniors of the past, perhaps retirement (and 55-plus) communities need some rebranding. Homes near hospitals and medical
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