In 2016, millennials have the power to remake the real estate landscape wherever they choose to settle. But where will that be?
You might assume that young people are naturally drawn to the nation’s largest and most renowned metropolises such as New York City and Los Angeles to jump-start their careers and enjoy the full-throttle excitement of big-city life. And you’d be right—at least partly. But here’s the rub: Increasingly, they can’t afford to live in these places. Sure, Brooklyn may be a notorious hipster/millennial mecca, but how many 30-year-olds can afford $1.75 million one-bedroom co-ops? No wonder shrewd young home buyers are increasingly turning to cities that are relatively affordable and have lots of jobs and maybe even a trendy atmosphere all their own.
As part of the realtor.com® 2016 real estate forecast, we’ve pulled out our ironic Magic 8 Ball to prognosticate the top 10 markets likely to see a surge of millennial buyers. Get ready for an incursion of Sriracha, artisanal doughnut shops, and upscale tattoo parlors! And just to be fair, we also spotlight five places that seem to have lost their charm with the young generation and are likely to see the biggest exodus this coming year.
The ranking takes into our proprietary 2016 Sales & Price projections the representation of millennial users among viewers of “for sale” listing pages on realtor.com from July to October, and the share of head of households aged 25 to 34 relative to all heads of households, from 2015 Nielsen Pop-Facts.
1. Atlanta, GA
Median list price: $234,000
Population share of older millennials (24 to 35 years old): 13.6%
How did the southern mecca that proponents and detractors alike call “Hotlanta” make the very top of our list? Well, there’s the nation’s best hip-hop scene (iLoveMakonnen, anyone?), a vibrant and ever-changing nightlife, and tons of job opportunities. Oh, and did we mention affordable housing? It’s little wonder that Atlanta was ranked the best city for new college graduates and young professionals by MarketWatch, due to its high median starting salaries and cheap, cheap, cheap living costs.
2. Pittsburgh, PA
Median list price: $149,000
Population share of older millennials: 12.3%
For older Americans (let’s say, 40-ish) who are used to thinking of the former steel town more as a cheap punch line than a destination stop, Pittsburgh’s considerable youthrenaissance may come as a bit of a shock. But this riverside city is beginning to attract millennials in droves. Some consider it the new Portland. Low housing costs, good public transportation, cool clubs, a hopping night life, and a revitalized waterfront area all add up to an attractive destination for the young’uns. Pittsburgh ranked third out of the 100 largest markets for the 25- to 34-year-olds’ share of purchase mortgages in 2015.
3. Memphis, TN
Median list price: $164,000
Population share of older millennials: 13.5%
Not exactly known as a young city, Memphis has a slightly higher share of 25- to 34-year-olds than the U.S. average, and the rate is rising. Why? Could it be the nation’s best barbecue? Or maybe it’s a bit of Graceland magic. Most likely, it’s the market’s housing affordability and low cost of living that are attracting millennials and encouraging them to buy—the share of older millennial households is 7% higher than the national average. The area’s median household income is also increasing faster than the national average.
4. Boston, MA
Median list price: $408,000
Population share of older millennials: 13.8%
One of the oldest cities in the U.S., Boston has always been known for having a young population as well—after all, the greater metro area counts 85 colleges and universities, and plenty of new grads choose to stick around. Even though the housing prices are higher than the national average, a wealth of education resources, combined with abundant job opportunities (especially those driven by the tech sector), make an appealing place for young people to build a life. The city has even got a bit less—what’s the word?—uptight in recent years.
5. Austin, TX
Median list price: $367,000
Population share of older millennials: 16.5%
Is there a city more hipster-plentiful than Austin? With a 24% higher share of 25- to 34-year-olds than the nation as a whole, Austin is an ample showcase of what young creatives and entrepreneurs are cranking out these days (especially if you come for the city’s South by Southwest festivals of film, interactive media, and music). It’s now known as a center for tech jobs and startups, as well as for pharmaceutical and biotechnology companies. The city’s latest unemployment rate was only 3.3%.
6. San Diego, CA
Median list price: $585,000
Population share of older millennials: 15.5%
A strong economy led by the biotech industry, high-quality universities, year-round mild weather, gorgeous beaches with rich wildlife—do young people need more reasons to move to San Diego? No? OK.
7. Seattle, WA
Median list price: $398,000
Population share of older millennials: 14.9%
The headquarters of Microsoft, Amazon, and many other tech companies large and small, the greater Seattle area has welcomed an influx of educated, young tech workers, which contributes to its uniquely cool culture. And wait, don’t forget your Starbucks Coffee Frappuccino.
8. Houston, TX
Median list price: $312,000
Population share of older millennials: 14.4%
Houston officials boast that 26 Fortune 500 companies call the city home, and the abundance of career opportunities attracts millions of young professionals every year. By some metrics, it’s the nation’s top urban job creator. Other attractions? For a place once known for only steak, steak tips, and chicken-fried steak, Houston is becoming “one of the most exciting places in the U.S. to eat,” according to New York Times food critic Pete Wells. From 2000 to 2012, Houston saw a 49% increase in its percentage of college graduates aged 25 to 34, according to City Observatory.
9. Denver, CO
Median list price: $449,000
Population share of older millennials: 14.9%
Mountains, fresh air, sunshine, tech jobs … Denver checks off many of the boxes for the features millennials want in a place to live. Perhaps more important, it also has the ones that lend it an aura of cultural cool, including microbreweries, bike-sharing, and legal marijuana. What’s not to love?
10. Charlotte, NC
Median list price: $230,000
Population share of older millennials: 13.1%
The Queen City ranks No. 2 among the country’s 25 largest cities for population growth from 2010 to 2013, topped only by Austin. It’s an usual place—a center for NASCAR, many, many graveyards, and Michael Jordan. And for some reason, locals call their downtown area “uptown.” Somehow it all works.
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5 markets where millennials won’t be buying in 2016
We also identified five out of the 100 largest markets that millennial buyers will probably shun in 2016. In these five places, the number of mortgages purchased in 2015 by 25- to 34-year-olds was below average, and relatively few members of that age group were looking at listings on realtor.com. In addition, these five markets have no growth forecasted for next year—and younger buyers are driving much of the growth in real estate, according to our forecast.
The following list is not ranked.
Jacksonville, FL
Median list price: $228,000
Population share of older millennials:13.5%
Phoenix, AZ
Median list price: $290,000
Population share of older millennials: 13.8%
Port St. Lucie, FL
Median list price: $248,000
Population share of older millennials: 10.2%
Spokane, WA
Median list price: $214,000
Population share of older millennials: 13.5%
Stockton, CA
Median list price: $308,000
Population share of older millennials:13.3%
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