2019 Real Estate Prediction: The Great Suburban Shift
We took a look at the latest trends, and our 2019 real estate prediction is that we will see a great suburban shift among the ever growing population of millennial homebuyers. Researchers are seeing more evidence the younger generation that put off buying a home has its eyes on single-family homes, meaning that housing outside major cities is in high demand. Over 2.6 million people annually moved from principal cities within metropolitan areas to the suburbs in 2016 and 2017, and in the ULI’s Top 20 emerging market report, 55% of new residents over the last five years have relocated to suburban homes.
Let’s break down the logic behind this real estate trend. It’s long been a common path for the young and upwardly mobile: you grow up in the suburbs, you go away to college, and then, once you’ve graduated, you move to a major metropolis, like New York City, Los Angeles, Chicago or San Francisco. You spend five to ten or so years growing to become an official city dweller, paying exorbitant rents and even continuing to live with roommates in order to be as close as possible to the “action.”
Nobody can argue the fact that big cities like Los Angeles make exciting places to live; they’re home to a number of perks and conveniences you simply can’t find in quiet suburban areas. Whether you’re looking to climb the corporate ladder amid the fiercest competition (and for the highest stakes), whether you want to experience the luxury of being able to use public transit access a nearby museum, or whether you simply want to be able to get Thai food delivered at 2 a.m.—when you’re young with your whole future ahead of you, it can be difficult to imagine settling down away from the excitement and bright lights.
The Draw of Suburbia
That is, of course, until you realize just how high up that corporate ladder you’ll actually need to ascend in order to realistically plan for your future! Living in a big city right out of college is one thing; trying to raise a family in a big city is quite another. Aside from the fact that a living space large enough to accommodate kids will come with a hefty price tag for renters and buyers alike, there are things like the kids’ schooling to think about. That’s why Irvine real estate is such a hot commodity. With its award-winning schools, master planned communities, and proximity to great shopping and entertainment, it’s a great place accommodate growing families who are still active.
Millennials: Both The Largest Generation And The Largest Generational Subset Of Homebuyers
According to the National Association of Realtors®, millennials—a term that, by the way, does not mean “teens” but rather the largest generation in America’s history, encompassing those born from 1980-1998—comprised the largest generational subset of the real estate market last year, accounting for the 36% majority of all homebuyers. Of that 36%, 65% had bought a home for the first time.
Given the breadth of age under the millennial umbrella, with the oldest nearing the age of 39 and the youngest just approaching 20, it’s safe to assume a vast swath of them have yet to reach the point they’re ready to consider such a significant purchase. Given that fact, millennials will continue to comprise a large part of homebuyers, if not the majority, for at least another decade. Our 2019 real estate prediction could be a defining factor for some time.
What That Ultimately Means: A Boom In Suburban Markets
With such a large influx of young, first-time homebuyers dominating the market and purchasing outside of the nation’s biggest cities, you may surmise that it won’t be long before the trend to put down roots in smaller cities gives way to a trend toward out-and-out suburbia. And we’d have to agree with you. Given that virtually all of today’s economic indicators point toward a continually increasing demand for affordable housing, it would be hard to envision that not becoming a reality.
Adding fuel to that fire is the decentralization of jobs. More and more, it’s becoming commonplace for employers to seek out talent all over the country, or even all over the world. And given that today’s technology makes it easy to interact with your teammates and even have video conference meetings from the comfort of home or a co-working space, the need to live near your job is growing decidedly antiquated—which means that the notion of buying a big house far away from it all is more within reach.
The Bottom Line
An uptick in the popularity of suburban America could mean several things, if millennials are leading the charge for this 2019 real estate prediction. For one, suburbia is changing. It’s not unreasonable to speculate that modern suburbia—perhaps off the beaten path, but still vibrant, walkable and replete with chic, urban-style housing that offers a small taste of a city—will see a much greater demand than yesteryear’s suburbs, which hearken cookie-cutter housing tracts, miles rather than blocks in between your home and the nearest grocery store, and beige strip malls. In the same vein, it’s logical to conclude that the emerging housing hot spots in smaller cities and suburbs will envelop a viable and strategic investment opportunity for people of all ages.
As ever, the single most effective way to ensure you can leverage any real estate trend to your advantage is to work with a seasoned real estate professional who is always looking ahead in order to provide the very best guidance—not to mention, the most attractive wealth-building opportunities—for their clientele.
If you’re in need of solid real estate help, look no further—you’ve come to the right place! Search for a First Team Real Estate agent or call 888.236.1943. No matter what you do, review this 2019 real estate prediction and others with a professional before you make a move on the market.