READINGTON, NJ – Hunterdon, as the rest of the nation, is undergoing “long-term structural changes and disruptions” that, working in tandem, may result in Hunterdon being home to the “not yet wed, and the nearly dead.”
That’s what James Hughes told a group of business and elected leaders yesterday at a conference sponsored by Hunterdon’s Chamber of Commerce.
Hughes, an East Amwell resident, is the dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers. An author of more than 30 books, he’s widely recognized as an expert on demographics, housing, and regional economics.
The changes are the result of technology and the cyclical nature of economics, Hughes said.
“We’ve been on a wild ride on the economic roller coaster for the past 17 years,” he told the group which met at the Stanton Ridge clubhouse in Readington.
“America entered the 21st century at the tail-end of what we now call the great trans-millennial economic expansion,” Hughes said. What began in March 1991 ended in March 2001, he said, making it “the longest expansion in the nation’s history – a full 10 years.”
The period was “an extended period of robust economic growth, a decade of prosperity for New Jersey and Hunterdon.”
The bad news is that the second half of the expansion was actually “fueled by a high technology dot-com bubble that ultimately caused its demise ... but you never know you’re in a bubble economy until it bursts.” In the aftermath, the stock market “lost $5 trillion down the drain.”
The eight-month recession that followed was cut short by “extraordinary actions taken by the Federal Reserve,” Hughes said, and that helped create what he called an “unprecedented housing bubble.”
America’s homeownership rate had soared from its historic 64 percent rate to 69 percent. Then, the “great housing bubble burst .. as the Great Recession unfolded.” The home ownership rate is 63 percent now, the lowest it’s been in 51 years.
“Housing reality in New Jersey has been permanently transformed,” Hughes said, but there’s more to it than just those numbers.
The 18-month downturn was the worst downturn since the Great Depression. When it ended in 2009, 8.7 million private sector jobs had evaporated.
Now, “I think more New Jerseyans believe in flying saucers than believe expansion is deep into its eighth year,” Hughes said. The current cycle is “quite mature and perhaps living on borrowed time,” although Hughes believes “the current national expansion will soon be the third-longest in history.” He said this year will be one of “substantial economic traction (that) could surprise us on the upside.
“While bucking-bronco growth is not in the cards ... we’re not about to be economic roadkill anytime soon.”
Economic bubbles can have “long-term ramifications and disruptions,” Hughes explained, and the “lingering effect of the housing bust and credit crisis is the greatest home-ownership correction in the nation’s history.”
That bust has hit many millennials, who Hughes said face “significant difficulties in the housing market.”
Statistics show a record number of adult millennial children – who are between 18-and 34 years old – are now living with their parents, with 34 percent nationally still at home, Hughes said.
In New Jersey, those numbers are even higher, with 47 percent of millennials living with their parents – the highest in the country. And in the Garden State, Hunterdon leads the way: 61 percent of millennials are living with a parent, Hughes said.
Yet, “Millennials now rule,” Hughes said, because of “the greatest age structure age transformation in history.” Those born between 1980 and 2000 have already supplanted baby boomers as largest sector of America’s workforce, and they are an “urban-centric generation.”
“While their parents couldn’t wait to get out of industrial Jersey City and move to Hunterdon County,” Hughes observed, “millennials can’t wait to get back to post-industrial Jersey City.” He called the pattern “sprawl-withdrawal,” as millennials shift from places like Hunterdon County to those such as Hudson County and New York City.
Will Hunterdon be attractive to millennials in the future? As millennials have changed job patterns and population patterns, Hughes asked, “Will their preferences change? That’s a key question that remains to be answered.
“My forecast? Yes, that’s going to happen,” Hughes said. “We don’t know the magnitude of it.”
But if they do come to Hunterdon, they will want the “experiential environments,” that they favor, not the standard suburb. That, Hughes said, will create “ a new opportunity for Hunterdon.”
Huighes said that what the future holds can’t be foreseen because it will likely be driven, at least in part, by technology that is only just now developing, or that may not yet have been invented.
For example, things such as artificial intelligence and autonomous vehicles could influence the future. Perhaps, Hughes muses, millennials will commute from Hunterdon to Jersey City in their self-driving cars.