Suburban Connecticut may again be the place for young adults

By Scott Benjamin

Why is Connecticut losing a net of 428 people per week when 24/7 Wall Street rates it as the fifth best state to live in and Kiplinger reports that it has the third largest concentration of millionaires in the country?

Is it because it doesn't have enough money to pay the pension obligations for its state employees?

Can it be largely attributed to having the worst maintained roads in the country?

Could it be because Connecticut's individual taxes are the eighth highest in the nation?

Four years ago Patch.com reported that Larry Kudlow of Redding, who is now the director of the National Economic Council, gave Connecticut's economy - on a gauge of zero to ten - a "zero."

There are other concerns.

The Nutmeg State - except for Stamford, New Haven/Milford and West Hartford. - doesn't attract many millennials. A largely suburban state that lured UBS and Union Carbide a generation ago can no longer compete with Route 128 brain hub corridor in Massachusetts, as the Boston Globe reported in 2016.

Dita Bhargava of Greenwich, who sought the 2018 Democratic nomination for state treasurer, told Patch.com in 2017 that when General Electric moved part of its operations out of Fairfield to Boston, it didn't add one parking space at the new location since inner-city transit is readily available.

On the lack of 25- to 35 year-olds, former U.S. Rep. Sam Gejdenson (D-2) said on the WTNH-CH. 8-New Haven Capitol Report in 2017 that companies are not leaving Connecticut because of taxes or regulations, it is because "young people don't want to live here." He said if you could get five cities in Connecticut to attract millenialls, it would also boost economic activity in the suburbs.

Apparently it is a lingering problem.

In January, 2008 former Hartford Courant reporter David Fink, the policy director for the Partnership for Strong Communities, wrote at HartfordInfo.org that, "Connecticut has already lost a higher percentage of 25- to 34-year-olds since 1990 than any other state. . . We must build starter homes and affordable rentals to solve the population problem and hold onto workers, young professionals and families who will do the jobs and pay the taxes we will need."

Joanne Breen - the president of CT Realtors, one of the largest trade organizations in the state -said in a recent phone interview that, "The millennials right out of college want to be able to walk to dinner and entertainment."

However, the oldest millennials were born when Ronald Reagan was president and some now have growing families.

Breen, whose office is based in Newington, added, "When they start having children, there is sometimes an inclination to want to live in the suburbs."

She said that Lawrence Yun, the economist for the National Association of Realtors, recently said "that people in general (not millennials per se) were leaving the New York metro area to come into Connecticut and were attracted by our suburban towns."

Stanford University Economics Professor Nicholas Brown said during a recent virtual meeting that we've entered a work-at-home revolution.

Might suburban Connecticut become as attractive as it was a generation ago?

Breen said that "the fact that we can now work remotely so efficiently may encourage younger people working for firms in large metro areas with such high priced housing options to opt for less expensive housing in Connecticut's suburbs."

Yet, Connecticut also is plagued by a limited amount of housing that is on the market.

Said Breen, "Some of it still may be from people not having enough equity as a result of buying in the boom market of 2005-2008 and still not recapturing enough of the equity they lost."

"It is more of a sellers' market," she explained. "Buyers are swarming to get a home,. But what is currently benefitting the buyers are the low interest rates."

The prices went in different directions before and after the financial crisis of 2008.

In early 2008, Fink wrote that, "Connecticut's home costs have risen 70 percent since 2000."

Just the opposite has happened since the subprime mortgage panic in the fall of 2008. Last December, Patch.com reported that Dan Keune - the immediate past president of CT Realtors - said that since the Great Recession ended in 2010 nationally home prices have increased 43 percent, but only eight-tenths of one percent in Connecticut.

Regarding the lack of starter homes in Connecticut, Breen said that the "condominium market," which had lost some of its "luster" has become "more viable in the last two years."

Unemployment went to 14.7 percent in April - the highest rate since the Great Depression of the 1930s - but declined to 13.3 percent in May, apparently partly due to the $2.2 trillion in spending from the bipartisan CARES Act stimulus package approved on March 27 and steps taken by the Federal Reserve Board to address the economic fallout from the pandemic.

Patch.com has reported that Donald Klepper-Smith of DataCore Partners, who chaired former Gov. M. Jodi Rell's (R-Br0okfield) economic team, believes the recession will carry into 2021.

Yet, Breen is optimistic: "I think there will be strong [economic] rebound" as businesses continue to reopen.

"Some sellers put themselves on the sidelines because they weren't comfortable opening up their homes to buyers and their agents during the pandemic; and, hopefully, we will see more of those houses coming on the market soon," she added. "In addition, some sellers who were furloughed from businesses that had to close because of the pandemic may be waiting until they get back to work before making a move."

"As we move toward the state opening up more, we are expecting a very active summer and fall market this year," Breen explained.

"I do think there is a misconception that I've heard out there where people think this virus has already or will result in home prices dropping; and that is simply not the case," she declared.

Breen commended Gov. Ned Lamont (D-Greenwich) for the outreach from the state Department of Economic & Community Development to the real estate associates during the pandemic.

CT Realtors has established a higher profile since it held a rally in 2017 at Horace Bushnell Park in Hartford, which featured a keynote speech from University of Connecticut women's basketball coach Geno Auriemma. The organization sponsored gubernatorial candidates debates in 2018 during the primaries and the general election.

Breen said among its legislative priorities are an elimination of the gift and estate taxes and revisions in the conveyance tax.

Kiplinger recently reported the fourth highest real estate taxes in the nation.

Remarked Breen, "Taxes are always an issue."

On another topic, The Wall Street Journal reported on May 4 that there has been a strain on some mortgage lenders during the pandemic since many are nonbanks that don't have deposits or other business lines to cushion the blow if people miss a monthly mortgage payment.

Breen said that hasn't been an issue in Connecticut.

She said, "Many are solid and reputable and specialize only in mortgages."