Who would have thought that the suburbs would ever be
"lit", as the kids say.
Alright, do I have your attention with my cool lingo? Ok
great!
Remember that pesky generation that wanted the option to
work more from home before it was made necessary by a pandemic? Yes, THOSE
kids, THE MILLIENIALS are leading the charge for moving out of major
metropolitan cities and into the cozy confines of the suburbs or smaller cities.
The COVID-19 pandemic has changed the way people are thinking of real estate
and many people no longer want to have small downtown apartments or
condominiums during a time when we are all spending more hours with our
friendly confines and are sick of the high cost to live in them. Many
millennials have begun finding their socially distanced space in the suburbs of
these major cities or in different, smaller cities altogether, at a much lower
cost.
PricewaterhouseCoopers Emerging Trends in Real Estate
2021 report shows that those people ages 30-49, who are getting married, having
kids, and are in expansion mode will likely grow by 8.4 million in this decade.1
And this demographic, as well as many others, are seeing the world change before
their eyes.
Many of us have worked from home for the better part of
the last year. Some companies have already hinted at permanent work-from-home
policies. People are looking for homes that have bigger home offices or larger
areas for their kids to learn from home. Parents want more green space for
their kids to get out that energy! With the typically higher property taxes and
cost of living in homes in major cities, smaller towns become more attractive.
It's not just millennials, though. Parents with college-aged
students are having their kids graduate and come back to live at home at record
rates. Some are in the Sandwich Generation and are financially supporting their
kids and their parents, sometimes in their home. A need for a bigger space at
less of a cost is becoming more and more of a priority.
Small towns and suburbs are redeveloping their downtown
areas to attract a younger demographic to live in their towns. An example of
this can be seen where our oXYGen Financial home office resides in Alpharetta,
GA. When the pandemic comes to an end, large swaths of people will be perusing
these downtowns that are being set up as a Live, Work, Play environment.
Some political changes may aid in the growth of this
trend as well. With the new administration signaling that they may forgive
parts of student loan debts, expect homeownership to rise among Gen Z and
millennials. This number already went up 19% over 2020 and with low rates
abound, I expect this number to keep growing.
This trend actually isn't new. It has been slowly
occurring since 2017 but COVID-19, as it did with many things, accelerated the
trend. Housing inventory in San Francisco has risen 96% year-over-year and
sales inventory across New York City reached their highest levels in August of
2020 since 2010
It remains to be seen what the future holds when it comes
to urban real estate. Surveys show that Gen-Z will likely follow previous
trends that favor urban metros but Gen Z is smaller than previous generations
and a changing landscape of work environments and suburban downtowns may see
the trends of The Great Escape continue to escalate.
1 PwC and the Urban Land Institute: Emerging Trends in
Real Estate® 2021. Washington, D.C.: PwC and the Urban Land Institute, 2020.
2 Stephanie Yang, "Young Families Are Driving the Exodus
From New York City to the Suburbs," Wall Street Journal, October 15, 2020,
accessed via Factiva, November 19, 2020
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