Who are millennials?
Millennials are defined by those born between 1981 and 1988. These 20- to 36-year-olds are the most talked about generation in news today, and they also represent the largest living population, recently passing Baby Boomers in 2015. So much research has been conducted in regards to what millennial preference are and how this group live, leading us to another question: Where do millennials live?
A hypothesis developed, suggesting millennials prefer city life to suburban or rural life, and many ran with this notion before it ever became a full-fledged theory. However, research has called this notion into question. The findings show millennials conglomerate more on the outskirts of cities rather than living in and around downtown areas. Using previous generations as a precedent, we wonder if millennials too will migrate to the suburbs as Gen X and Baby Boomers have.
The results of many surveys and data from the U.S. Census Bureau suggest millennials are attracted to the lifestyle rewarded by city life, yet are still moving out of the city. Instead, they are opting for areas which morph the best of both the city and the suburbs into one neighborhood. In comparison to the two preceding generations, Baby Boomers and Generation X, millennials are moving into the suburbs in a more delayed time frame.
We know millennials are drawn to areas with reliable public transportation, bike-to-work options, vast pedestrian walkable areas, and thriving public spaces inclusive of good restaurants and bars. These are aspects of city life millennials are not willing to give up, yet expensive downtown housing markets seem to be forcing millennials to find these attractions elsewhere. Consider it the urbanizing of the suburbs, if you will.
Bloomberg created the “Millennial Housing Affordability Index” which reveals cities deemed “unaffordable” for millennials to be homeowners. This data is derived from subtracting the median millennial earnings in a given metropolitan area by the minimum salary required to purchase a home in that area. Denver is ranked as the 12th least affordable city for millennials, estimating this age group would need to make an additional $2,620 per year in order to own a home. Honestly, this earning gap is not too bad in comparison to other metro areas. The No. 1 least affordable metro area is San Jose, estimated to cost millennials, on average, an additional $80,162.
Millennials Future Outlook
As millennials continue to tack on the years, these trends will continue to be tracked. But developers, local businesses, and hipster restaurants alike should anticipate high populations of millennials steadily popping up on the outskirts of major downtown areas.