The eye of American culture is shifting and with it, the real estate market. The dream of purchasing a home in the suburbs with a roomy yard and garden with a gated walkway entrance, has been lost on millennials as they would rather take public transit, ride cycles, or walk than own a vehicle. Cities give you a free lifestyle that delivers opportunity and convenience rather than heading through the motions of starting a family in that house on the end of the street. This may have been the situation for their parents, the baby boomers, but It’s a trend that is travelling across the United States. The need to adjust to an economic system that is vastly different than what we were used to seeing in the 20th century is forcing millennials down a different path. Metropolitan centers are home to America’s most educated and wealthiest. They are also becoming the most socially equitable regions of the country. It is a trend not unique to States, but a global pattern that is pulling people away from rural or suburban life with a nuclear family to a more condensed lifestyle. This has triggered the change of approximately half of the world’s population to move into cities for the first time in history.
The younger generation expect to pay a premium to stay in the city center, but it’s a fee they view as a essential expense due to demand, however the advantage is monetary equity. All of a sudden, cities are also getting baby boomers seeking to buy smaller and drawn by the same quality lifestyle that inspires millennials. Because of this, it’s no surprise that the perennial most walkable urban centers of New York, Washington, D. C., Seattle and Boston also have the largest GDP in the country. They also find themselves with a reduced mortality rate due to ease of access to better doctors and state-of-the-art medical facilities. Purchasing urban property whether it be a house or a condominium, is a smart investment as demand will only rise as more individuals embrace interconnectivity, greener living and are foregoing children for a more lavish lifestyle.
A complex, well-organized and efficient public transit system makes a city optimal for walking. In conjunction with this, rates increase for office space, retail leasing, and home rentals.
The University of Technology Sydney performed a study in 2012 on the impact of investing in a rail system is having on real estate prices in northwest Sydney. It compared housing prices before and after the construction of a new rail line. The study found there was an average increase of $58,460 in unit pricing, following an opening of the rail system. It also showed a small price change for residence further away from the station at a change of $17,556 less for every kilometer away from a new train station. Smaller houses are selling for much more due to the proximity of public transit. This suggests that accessibility is the new luxury in urban centers, while house size is no longer a representation of wealth, but solely dependent on family size.
Millennials are placing a higher value on public transit for cleaner air, promotion of physical activity and removing the stress of commuting to work by car from their daily routines.
Millennials have the highest education rates in history and they enjoy the lifestyle that comes with residing in metro centers rather than the suburbs. This, in essence, is reinventing the American Dream. Although, it’s tough to determine which came first: millennials moving to major cities because of their walkability or if these big cities became walkable after millennials began to flock there.
Cities that do not historically have a high-density urban population such as Phoenix or Cleveland, are finding themselves in a position of attempting to catch-up with big cities such as New York, so their local economy and real estate market do not fold in response to millennial fondness for accessible and technologically advanced urban centers. Millennials make up the vast majority of the trend that is migrating to dense cities, because they know urban centers will offer them big breaks and success.
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