Why Millennials Seem to Love Suburbia
Join 700+ peers and get the latest market intelligence from experts you can count on at RealShare ORANGE COUNTY on August 18.
ORANGE COUNTY, CA—Reports of suburbia’s demise as a draw for Millennials are extremely premature—if applicable at all. According to a recent GlobeSt.com online poll asking why Millennials are rediscovering the virtues of life outside big urban centers as they enter a different life stage, 47% of respondents said the suburbs still corner the market on better services such as schools and property, and 42% said the cost of city living has made it harder to establish a family and career.
A very small percentage—only 1%—of respondents felt that suburbs have offered better options for a significant amount of time, saying the economic opportunity shifted outside the core decades ago. This indicates the shift, in most people’s minds, has been more recent. But 10% of respondents don’t believe the suburbs have it over city life among Millennials at all, saying the data is flawed and, in their experience, they don’t see it happening.
The results are somewhat surprising given the popularity of transit-oriented development, the extreme strength of the multifamily market and many industry reports that cities are capturing the imagination of Millennials with live/work/play environments. But, according to Emily Lettieri, conference manager of ALM’s RealShare Conference series who happens to be a Millennial herself, what young people are attracted to is not so much city vs. suburbs, but what the environment has to offer. “When it comes to Millennials, the word has always been ‘amenities.’ While the assumption has been that’s what draws them to cities, one only has to look at our RealShare Westchester County conference to see that suburban developments have also been responding in order to appeal to the group.”
The conflicting indicators are not much of a surprise. As GlobeSt.com reported last month, a panel at the recent PCBC conference in San Francisco said that this cohort is “very hard to figure out.” According to Jay Parsons, national market analysis manager of MPF Research, the Millennial population has been slower to marry and become financially independent and they express less interest in “worldly” goods. Whether this is a result of the Great Recession, a change in values, student-loan debt or difficulties in finding well-paying jobs, “it’s vital that we learn how these consumers will affect the economy—and real estate—in material ways,” he said. “We see all these contradictions about this generation; it is diverse group that is very complicated.”
As GlobeSt.com reported last week, according to Rick Sharga, EVP of Auction.com, student-loan debt is a valid factor in delaying homeownership among Millennials, who may be prevented from obtaining a mortgage due to high debt-to-income ratios. Their delayed purchasing, he says, is not necessarily a matter of not wanting to own a home, but being unable to finance one in their current economic situation, which impacts the environment in which they live.
It remains to be seen whether Millennials will continue to gravitate more toward the cities or the suburbs. As GlobeSt.com reported last week, according to Brian Judd, a principal with award-winning Santa Ana, CA-based planning, design and environmental firm PlaceWorks, “Millennials are starting to have kids later, and once they do it will be interesting to see what their preferences are with their living environment as well. Working with so many communities and living environments, we hear about trends for urban development, and we try to accommodate that to the specific communities. But further down the line, in single-family established suburbs, it’s important to ask how do they compete for that particular resident? What are the amenities you need to plan ahead for that?”
As a GlobeSt.com thought leader, Auction.com provides expert commentary and analysis around economic drivers impacting commercial real estate. For MORE insights and updates on upcoming online property auctions, click here.
You can now be notified via email if this story is updated by clicking on the "Follow this Story" link. You must be a registered member to take advantage of this "members only" benefit.