Millennials heading for the ‘burbs

Posted by on December 5th, 2017

Decades ago, city dwellers had to weigh the high cost of “moving to the country” – a.k.a. pulling up roots to head for rural communities that required long, often inconvenient commutes.

As cities pushed outward, and the automobile dominated American transit, the script flipped. Suburban development drew the working population to the country en masse.

In the developing suburbs, larger homes on larger lots brought the promise of better living, and made the longer commutes worthwhile. Downtowns either languished or were transformed into trendy havens for the wealthy.

A decade ago, many analysts wondered if the Millennial generation –  born roughly from 1985 to 2000 – was bringing the downtown-dwelling notion back into vogue.

This generation seemed satisfied to rent high-cost apartment and condos just to be close to the action – and their jobs.

But now, Millennials are growing up, and finding a lot in common with their grandparents. A 2016 survey by the National Association of Home Builders found 66 percent of those born after 1977 want to live in the suburbs, compared to 10 percent who wanted to live in a city.

By far the nation’s largest generation at 80 million strong, Millennial buyers offer the housing market the potential for another boom, but supply has to catch up with demand.

More homes are expected to come on the market in the next few years, but it’s going to take some cooperation from other homeowners. Historically, when seniors downsize, it opens up move-up homes for middle-aged people.

Middle-aged people move out of starter homes to make way for the young. But somehow, that system has gotten a little stuck. Analysts say more people are choosing to stay where they are, which actually drives up prices in times of high demand.

The country’s homebuilders have also slipped behind demand. For the better part of two decades, they’ve mostly focused on multi-family complexes and larger, more luxurious homes for the well-heeled.

Without a rich supply of starter homes, younger buyers seek out townhomes and other attached living situations when they can.

If they can afford it, some even go straight for those aforementioned larger, pricier homes so prevalent in the new construction market.

Still, Millennials ARE buying homes. After a serious falloff starting with the Housing Crash, Census numbers say the national homeownership rate among younger adults is easing up gradually.

The National Association of Realtors says people younger than 36 have represented the largest share of home buyers the last four years, at about 34 percent.

Outlying smaller cities are taking notice, increasingly adding new “suburban centers” featuring apartments, condos and townhomes with trendy stores and fun restaurants.

These very “downtown-like” amenities also serve to attract Millennial buyers as they begin their lifelong transition to the suburban lifestyle.