Cities grow as young adults ‘diss’ the suburbsby Tim Manni
For those ages 18 to 29, who make up approximately 1 in 6 Americans, things have changed. This group of young adults is delaying marriage and they’re waiting to have kids because many are saddled with debt and stuck in low-paying jobs (if they’re working at all).
The result, according to the 2011 Census estimates, is they’re choosing to avoid the suburbs, instead flocking to city centers, causing city growth to outpace suburban growth for the first time in nearly 100 years. It hasn’t been since 1920 that city populations have grown to this degree.
Suburbs are boring
“I will never live in the suburbs,” Jaclyn King, 28, told the Associated Press. “I just like being connected to everything down here [in Denver] — concerts, work, restaurants, all of it. This is where everything’s at.”
Like many people King’s age, she feels the suburbs don’t offer the entertainment and excitement the city provides. But in addition to a more robust nightlife, cities are where the jobs are at.
King said she didn’t want to follow in her parents’ footsteps of having to take a 45-minute train ride to work every morning. Instead, city-goers, like King, opt for bikes or short subway rides.
Builders are taking notice
While many economists feel that “Generation Rent” won’t last forever, real estate investors and builders are trying to take advantage of the boon while they can.
“The recession hit suburban markets hard,” Royal Shepard, an analyst with S&P Capital IQ in New York, who tracks the residential and commercial real estate market, told the AP. “What we’re seeing now is young adults moving out from their parents’ homes and starting to find jobs,” Shepard said. “There’s a bigger focus on building residences near transportation hubs, such as a train or subway station, because fewer people want to travel by car for an hour and a half for work anymore.”
According to the National Muti Housing Counsel, the annual return on apartment investment is nearly 15 percent.
Will housing recovery have to wait?
For years, we’ve been debating whether the housing market has (finally) hit bottom. In fact, the headline of a New York Times piece on Thursday read, “After Years of False Hopes, Signs of a Turn in Housing.”
Home sales are steady, inventories are declining, home prices are rising (in certain areas) and builder confidence is improving. But just as some economists believe that “Generation Rent” is a temporary phenomenon, I wonder if this marked improvement in housing is just as fleeting. Will housing ever gain any true ground without a strong presence of young buyers?
Sure, both domestic and international investors are helping to keep certain markets hot, but I think the lack of interest, so to speak, in ownership among young adults could keep a full housing recovery at bay until they return.
Do you agree?