I read today a piece in Crains New York which reports that many of the fastest growing NYC neighborhoods in the next 15 years will be those on the water. That got me to thinking about how demographic shifts may have an impact on the the current real estate market going forward.
According to some estimates, the number of people living within 60 miles of the ocean will double within the next 20 years. This trend is accelerated in the US, where by 2006, more than half the population lived on the coasts.
While this increased density has already caused problems - see the evacuation of South Texas before hurricane Rita - from a real estate perspective, it is very good news (at least if you work on a coast). Looking forward, the increased pressure on housing inventory in these areas should tend to keep demand high over time because there will be more people who want to live there than there is housing to buy.
In New York City, where I work, we are surrounded by water. But over the years access to the water around us has been curtailed by the construction of highways and by the presence of waterside manufacturing and warehousing districts which took advantage of New York's harbor for transportation. Now all that is changing.
Brooklyn particular has been, and continues to be, a destination for buyers moving to NYC or from Manhattan, and the problem in many neighborhoods has been the lack of inventory, which has held prices (until the last few months) relatively steady even as sales totals went down significantly.
Now, amplified by aggressive re-zoning to replace manufacturing with housing, neighborhoods in many formerly down-trodden areas like Mott Haven in the Bronx, but also upscale enclaves like DUMBO in Brooklyn and the West Side of Manhattan may see substantial growth in the next few years, which will both accommodate anticipated growth in demand, and provide opportunities for buyers and sellers.
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