Housing 2024 - What's in store for housing's next generation

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Feature W ith all of the discourse surrounding millennial homeownership these days, Jenna Samp may offer a ray of hope. At 29, she's young, single and just purchased her first home. It's a notable achievement—for many millennials homeownership remains just out of reach—but it's also a sign that slowly but surely, millennials are vying for their place in the housing market. When most people think of the millennial generation, they picture throes of hip profession- als plodding through the down- town streets of Austin, Chicago, L.A., and New York. They read about young, ambitious entrepre- neurs in Detroit, Nashville, and Portland, who are revitalizing business districts, reclaiming city neighborhoods, and making their homes in abandoned warehouses and long-forgotten Victorians. While metropolitan populations have certainly reflected this new determination—adding a total of 2.3 million people to urban cores between 2012 and 2013, according to the U.S Census Bureau—the consensus that millennials are leaving the hills for the country's cities is a false one. They're actu- ally returning to the suburbs. The zealous supply of urban narratives severely contradict new studies that reveal millennials, a group facing historic lows of homeownership, are renting or purchasing homes in smaller cities and lower-density suburbs. This is true for Samp, a reg- istered nurse, who bought her three-bedroom, 2.5-bath ranch home in the picturesque suburb of Shorewood, Wisconsin, about 20 minutes outside of Milwaukee. It was an affordable option at $170,000 and included all of the amenities on her list—walkable neighborhoods, access to public spaces and parks, a short commute to her job, and a yard that offered her a little bit of respite from the hustle and bustle of the city. "To be honest, I always thought I was going to buy a house in the city," Samp said. "I'd never lived in the suburbs. But after living in the city for 29 years, I was drawn to Shorewood because of the com- munity. I like the quieter life. I'm a runner, and I like to do out- doorsy things like go to parks, hiking, biking, and golf." An article from Forbes writer Joel Kotkin calls people like Samp the "hidden millennials," pointing out that while roughly 30 percent of millennials live in "core [urban] counties," marketers and lenders alike forget that more than 70 percent live elsewhere. "To be sure, the numbers of millennials living in urban cores has grown, as downtowns and inner-city neighborhoods have gentrified," wrote Kotkin, add- ing that from 2010 to 2013, the population of 20 to 29 year olds in these areas rose by 407,400, or about 3.2 percent. The na- tional average in all areas was 4 percent. "It is dogma among greens, urban pundits, planners and developers that the under 30 crowd doesn't like … 'sprawling car-dependent cities.' Too bad no one told most millennials." "The differences [between the two] aren't huge, but there's clearly no mad rush to the cities—despite the shift from homeownership to renting among these adults," Trulia chief economist Jed Kolko said. Looking Back W hether or not a return to the suburbs is yet another short-lived trend in a shaky housing market remains to be seen. The statistics for millennial urban growth can be a bit confusing. Just three years ago, cen- sus reports showed that urban population growth had outpaced that of the suburbs for the first time in more than 100 years. A new, apoplectic narrative emerged, spelling doomsday for America's greenbelts, and the more progres- sive millennials were often placed at the forefront of the debate. Homeownership was no longer a priority. Just making rent was. It was a far cry from subur- bia's glory days. In the 1950s, suburban devel- opment—coupled with the end of World War II, the rise of the automobile, and overall middle- class prosperity—resulted in a mass exodus from the cities. Soon, the idyllic single-family home with the white picket fence was forever embedded in the national conscious, and with it a new model for upward mo- bility. Owning a suburban home became the status symbol for the American Dream. In recent decades this move- ment has greatly waned, how- ever. Over the years, suburbs hit a wall of stagnation both in terms of growth and develop- ment as well as in the public opinion. No longer heralded as America's utopian outskirts, sub- urbs soon caught flack for their lack of diversity, isolation, and hum-drum way of life. It didn't deter Americans from buying suburban homes, of course (in fact, they only bought bigger ones), but it certainly altered the national discourse. When the housing bubble burst at the onset of the Great Recession, the façade was ripped off the face of the McMansion, and Americans—many of whom now faced unemployment and foreclosure—quickly grew disen- chanted with society's long-held belief that suburban life equaled success, and vice-versa. Urbanism Reimagined T o many, it appeared that the millennials began to make their way back into the cities. Whether it was to be close to their schools, a bigger job market, or to gain access to public transportation (in an effort to cut costs), hundreds of thousands of millennials did indeed forge a path in many of the nation's major cities. And it was largely in the cities where they also began to make their mark. There are a lot of reasons why marketers have been led to believe that millennials prefer city life. These areas are the crossroads of culture and innova- tion—and those things prove to be a very powerful attraction to generation Y. The so-called "urban move- ment" that rose out of the ashes of the recession was about a lot more than starting artisanal brew- eries, tech start-ups, and neighbor- hood revitalization projects—it was about crafting one's own suc- cess. While the rest of the coun- try was lamenting the country's economic crises, millennials were busy creating their own definition of the American Dream. Th e M Rep o RT | 25 "While the rest of the country was lamenting the country's economic crises, millennials were busy creating their own definition of the American Dream."

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