Article after article over the past few years has expounded on the idea that the current group of 18 to 34-year-olds, also known as millennials, will be a generation of city dwelling renters. However, new research and a few leading edge trends noted by several publications including the venerable, New York Times are beginning to say that this may not be the entire story.
Millennials have certainly been slower than previous generations to embrace first time homeownership and have been more likely to live in more urbanized settings. Much of this appears to be due to economics and changes in early adult lifestyle, versus a complete change in life goals. The housing meltdown and subsequent recession caused delays in upward career mobility, as well as a wariness –even among those able to enter the housing market– about making purchasing decisions. Typical lifestyle patterns of this group, including delayed marriage and putting off having children til later in life, have also played a role in the purchasing delay.
Other research shows that 84 percent of 18 to 34-year-olds currently renting intend to buy a home at some point even if they cannot currently afford to do so. The great news for Atlanta homebuilders is that a recent Trulia study says 31 percent of renters want to buy a home in the next two years.
Where do they intend to buy this home?
Increasing evidence says, the Suburbs.
Millennials want to raise their families in the type of places they grew up, which for the overwhelming majority of them was the suburbs. They want big yards, good schools and safe environments.
Observational evidence is already showing this trend in the Atlanta real estate market. Virtually all new multifamily construction in the midtown area is currently scheduled to be rental versus the recent history of for sale condominiums. The current top selling markets tend to be suburban and include locations such as Forsyth, Cobb and North Fulton counties — popular single family locations known for good schools and single family detached homes. Realtors and builders report that much of this activity is being driven by leading edge millennials who are 28 to 34 years in age and who are making first time home purchases in these areas due to schools, home size and affordability as compared to more close-in locations.
This appears to be a trend not just in Atlanta, but also such locales as the notoriously hipster New York City borough of Brooklyn. In the previously mentioned New York Times article, the primary reasons for young families leaving the area for more suburban locales was space, schools and affordability.