MARKET BREAKDOWN
CITIES VS. SUBURBS
Easy access to transit and high levels of walkability make suburban areas attractive to the traditionally urban Millennial population.
ADDING TRANSIT FOR ADDEDATTRACTION: CASE STUDY OF MARYLAND’S PURPLE LINE M aryland’s Purple Line light rail project is meant to move suburban dwellers between Mont- gomery and Prince George coun- ties outside of Metropolitan D.C. Currently, if a commuter wants to go from Bethesda to Silver Spring on the metro, the trip takes two hours or more. With the new line, the Red, Green, and Orange Metro lines will connect without having to enter the downtown core. The suburbs in these counties already see growth despite the fact the project isn’t projected to start until 2022. Why? Studies have shown that economic development comes in conjunction with the availability of new transportation options. When these new options are announced, development rushes in with residential and retail options. This attracts new consumers to an area, which, in turn, continues to attract developers to fulfill consumer demand. Additionally, companies that typically have a suburban workforce will locate their busi- ness hubs close to their employees. They understand that shorter commutes help both in recruiting and retaining employees.
In general, the suburbs that bring in millennials have an urban feel. In fact, the suburban centers with high concentrations of Millennial home buyers are actually smaller but completely self-sufficient satellite cities located outside of urban centers. Real estate investors should look for suburbs offering the Millennial dream rather than the traditional Baby Boomer dream. For example: • Walkability • Convenience • Homes with flexible space • Strong public transportation systems (see sidebar) • Good schools • Older homes with character • Entertainment options • Millennial-friendly businesses • Mixed-use developments FINDING THE RIGHT SUBURB Identifying the right suburb that will appeal to Millennial buyers is crucial. Here are six characteristics that tend to fit the bill: Millennials like the advantages of big city living and need the jobs associated with hot urban markets. AN EXPENSIVE URBAN CENTER Residents of New York City, Los Angeles, Miami, San Diego, and San Francisco CLOSE PROXIMITY TO A HOT URBAN MARKET
spend about 40 percent of their income on housing. New home buyers must branch out beyond the borders of the urban center. NEW OR EXISTING PUBLIC TRANSIT OPTIONS Millennials require easy commutes to work. GOOD SCHOOL SYSTEM Suburban areas with great school systems or school choices will always attract first- time home buyers.
PLENTY OF OPTIONS Most first-time buyers look for a
3-bedroom home with about 1,800 square feet costing $200,000 or less. Millennials in particular seek homes with character.
TRENDY BUSINESSES AND ENTERTAINMENT
Millennials want to be able to walk to stores and restaurants and have plenty of entertainment options. Your suburb needs an urban flair. The new “story” about homeownership indicates suburbs that offer affordable housing with the amenities of urban living are the new “dream location.” Finding up-and-coming suburbs that fit Millennials’ definition of the American dream will be key to maximizing profit for real estate investors. •
John Trautman is an active real estate agent and investor in the Phoenix area. He may be reached at john@realestateki.com.
58 | think realty magazine :: year end 2017
thinkrealty . com | 59
Made with FlippingBook flipbook maker