Millennials are moving to the ‘burbs

Discussion
Mar 11, 2016

An ever-flowing list of articles written in recent years tell us just how different Millennials are from Baby Boomers. Millennials are all about the technology. They’re idealistic and much more focused on the balance between work and their private lives. Millennials are also a generation of urban dwellers — or are they?

According to the National Association of Realtors, Millennials make up the largest share of homebuyers in suburbs across the nation. Many of this generation, known for eschewing auto ownership and valuing pedestrian-friendly cities, are moving back to the same types of communities they grew up in.

The migratory patterns of Millennials is important for retail because of their growing influence in determining, not just the location, but the types of stores built. Millennials, it has been well documented, are not simply interested in shopping in stores, but going to so-called “third spaces” that provide warm and welcoming environments.

A MarketWatch article suggests that one of the reasons Millennials are buying homes in the suburbs comes down to finances. The suburbs are a less expensive place to live than most cities. Many Millennials continue to struggle with thousands of dollars in student debt, and not all have the high-paying jobs they hoped for when embarking on their college experiences. The same article pointed out that student debt carried by the parents of younger consumers may also keep them from assisting with down payments on first homes, as well.

DISCUSSION QUESTIONS: Do you expect the lifestyle behaviors of Millennials to become more like their parents as they age? What impact do you think Millennials will have on retailing when all is said and done?

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"I expect to see Millennials becoming more like their parents as they start families and workplaces change. Many cities have become expensive, offer too little space to families, and have poor education systems, all factors for young families to consider."
"First of all, I’m not certain we should take this study as gospel. In the U.S. as well as around the world, the migration continues to be into major cities. And cities are getting more crowded, so suburban locations are filling up from the city outward."
"Understanding migration trends is MUCH more complex than just what age group is buying houses in a given geography. Are they buying an upgrade in a location they’ve already lived? Did they migrate from another similar area, or are they truly making an urban-to-suburban switch?"

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13 Comments on "Millennials are moving to the ‘burbs"


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Nikki Baird
Guest
Nikki Baird
6 years 6 months ago

I think there is a reason you can chart the lifestyle behaviors of parents with ease, because they are so predictable. It’s just like that insurance ad: I’ll never get married. We’ll never have kids. We’ll never live in the suburbs. We’ll never drive a minivan. Yeah, good luck with that. The only one I managed to stave of was the minivan.

The best place to raise kids is where other kids are, and the plain fact is the suburbs are a much friendlier and safer environment — “go play in the yard” — than a downtown loft. Millennials are just now starting to get old enough and married enough and family-driven enough that they’re falling prey to the same impulses that have driven everyone else before them. The only difference is, as a cohort, they’re the largest yet. So of course their moves will have outsize impact on everyone else, including retail.

Chris Petersen, PhD
Guest
6 years 6 months ago

Yep, nailed it. Moving to the ‘burbs is definitely about the cost of housing.

Millennials are frugal, but not stupid. They can start acquiring equity for about the same monthly payment that is required for apartments in major urban centers. Many home purchases in the ‘burbs may in fact be “condos.”

The smart retailers are already in the ‘burbs with “third spaces” for the Millennials and the soccer moms needing respite. In addition to Starbucks, there are a host of other coffee houses and eateries with free Wi-Fi designed for people who want to hang out. Many new suburban centers are now designed as a mix of retail, entertainment and integrated housing options.

It is amazing what having kids will do to you! Raising kids definitely will make Millennials a whole lot more similar to their parents.

Max Goldberg
Guest
6 years 6 months ago

I expect to see Millennials becoming more like their parents as they start families and workplaces change. Many cities have become expensive, offer too little space to families, and have poor education systems, all factors for young families to consider. Many Millennials carry a huge amount of college debt and are working in jobs that don’t provide the wages and benefits that their parents enjoyed. Many of those jobs allow flexible hours and work-from-home options. All of which mean that living in a city is no longer a necessity. Cities are exciting places until one’s lifestyle changes.

Dick Seesel
Guest
6 years 6 months ago

Is it surprising the Millennials make up the largest segment of suburban home buyers? Not really, considering that they are outgrowing Baby Boomers in terms of sheer numbers at the same time that they are house-hunting for the first time. So I’m not sure how many conclusions you can draw from this bit of data.

As long as most American cities offer better school systems in their suburbs — along with more affordable housing and more space — it’s not unexpected that Millennials would be drawn to suburban living. (And it’s no coincidence that Boomers continue to downsize.) This will continue to drive the long-term strength of home-related businesses (furniture, DIY, home decor) beyond the short-term cyclical ups and downs of the housing market.

Ralph Jacobson
Guest
6 years 6 months ago

First of all, I’m not certain we should take this study as gospel. In the U.S. as well as around the world, the migration continues to be into major cities. The other side of that story is that cities are getting more crowded, so suburban locations are filling up from the city outward as opposed to masses of people moving to more distant suburbs.

The other topic to note is that we need to be careful NOT to lump all Millennials together. They are definitely not all alike. Sixty-five percent of them still don’t shop via mobile. So making generalizations about them is inaccurate in most cases.

Gene Detroyer
Guest
6 years 6 months ago

Absolutely not. I have a friend who is a developer of apartment buildings in the Metro NY area. He exclusively developed in the suburbs. His target is Millennials. He builds around suburban train stations. He provides gathering places, gyms, coffee shops, high speed access throughout his buildings and laundry service and retails spaces within walking distance. He tells me his tenants don’t have or want cars. They choose relatively simple spaces.

When all is said and done, retailers better know how to be successful online.

Jason Goldberg
Guest
6 years 6 months ago
Understanding migration trends is MUCH more complex than just what age group is buying houses in a given geography. Are they buying an upgraded home in a location they already lived in? If they migrated to an area, did they migrate from another similar area, or are they truly making an urban-to-suburban switch? Growth rates vs. inventory rates, etc. At the end of the day the National Association of Realtors is not a credible research organization, they have a vested interest in getting the perception out that Millennials are buying houses where they happen to have inventory. U.S. Census data shows that the overall population is migrating TO urban centers/primary cities, and Millennials are the fastest moving migrators. There are some studies that show a reverse migration: But the most credible argument for me is from Joe Cortright. His conclusion: “Young adults are highly mobile: they’re voting with their feet for the kinds of metropolitan areas and neighborhoods they want to live in. When you look at the entire sample of movers to cities and… Read more »
David Livingston
Guest
6 years 6 months ago

Living in the city reminds me of living in the dorm your first couple of years of college. Its fun, you are with kids your own age, you never need a car, there is always someone around to hang out with and its a party. Then you get a couple of years older and those new freshman seem like immature children. You want your own place off-campus. Same with living in urban multifamily housing. Eventually all those 25 to 35-year-olds seem like immature children and you want your privacy and quiet in the ‘burbs.

Patricia Vekich Waldron
Guest
Patricia Vekich Waldron
6 years 6 months ago

As Millennials move through life stages they will make changes, some similar to previous generations. They are leading the charge in acquiring less “stuff” and having more experiences. This is a big impact on retailers who need to make sure they have not only unique and satisfying environments for customers, but unique and fabulous goods and services that are irresistible.

Joan Treistman
Guest
6 years 6 months ago

When you read the research, note the difference between comparing Millennials overall to Baby Boomers and delving into Millennials to understand the segments within Millennials. The article takes us from the broad sweep of comparisons, i.e., Millennials vs. others, into differences within urban and suburban Millennials. It’s not as helpful to know how similar Millennials are to their parents as it is to understand what influences the Millennials who live close enough to shop in your stores.

Anne Howe
Guest
6 years 6 months ago

This study tells a different story than others, which point to more urban moves for Millennials. But the danger here for retailers is the practice of lumping them together as one group with one mindset. They are so not that!

Studying an 80 million-strong generation requires much more true insight-based research from retailers, and a true understanding of the specific marketplaces where they congregate and why. Placing stores without default to “what we have done to grow over the past two decades” will be challenging but is a must-do in order to succeed. Discovering where, when and how to meet their needs has to be done with true interaction, not based on a set of data points from survey research.

Lee Kent
Guest
6 years 6 months ago

There is a big difference between the patterns of life and the way one interacts with it. There will always be similarities as life cycles are entered and left, however, Millennials will always be connected in some way shape or form.

They will pre-shop online. They’ll want to touch, feel and have great experiences in-store. They will look to more and more retailers to BE those third spaces. They will expect rich content, ability to self-serve when they want, order online pick up when they want. And store associates and experiences that actually serve them before they sell. Get the picture?

And that’s my 2 cents!

Doug Garnett
Guest
Doug Garnett
6 years 6 months ago

Fascinating. And exactly what we expected. It’s entirely natural and usual for a generation to be more “urban” in their 20s and more suburban in their 30s. That won’t really ever change. Just good to see someone saying it.

That said, I’ve seen research showing that the urban markets are NOT millennial dominated – but have a huge baby boomer/empty nester population. Meaning…one dimensional views of generations are ALWAYS misleading.

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Braintrust
"I expect to see Millennials becoming more like their parents as they start families and workplaces change. Many cities have become expensive, offer too little space to families, and have poor education systems, all factors for young families to consider."
"First of all, I’m not certain we should take this study as gospel. In the U.S. as well as around the world, the migration continues to be into major cities. And cities are getting more crowded, so suburban locations are filling up from the city outward."
"Understanding migration trends is MUCH more complex than just what age group is buying houses in a given geography. Are they buying an upgrade in a location they’ve already lived? Did they migrate from another similar area, or are they truly making an urban-to-suburban switch?"

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