There's a reason millennials tend to favor city life over the suburbs -- younger folks, many of whom are untethered by kids, can benefit from nearby amenities like nightlife, restaurants, and the convenience of public transportation. Also, because millennials are frequently saddled with student debt, buying a home is often out of reach, and so many figure that if they're going to rent, they might as well put themselves close to the action -- and close to where jobs are.
But new data from Quicken reveals that the allure of the city may be waning as far as millennials are concerned. In fact, many are gearing up to leave the city and take up residence in the suburbs instead.
A new trend
An estimated 37% of millennials are considering leaving their cities within the next year, reports Quicken, with 16% anticipating a potential move within the next six months. And the reasons vary.
Among those looking to give up city life, 48% blame the COVID-19 pandemic. Namely, they say they can no longer enjoy a social life in the city because of COVID-19-related restrictions, they no longer wish to use public transportation, and they don't have to work out of an office at present -- and so there's no need to pay a premium for proximity.
All of these are extremely valid reasons to leave cities behind. But let's also not discount the fact that city homes tend to be considerably smaller than suburban homes, and after months of lockdown, younger folks may be itching to expand their living space, all the while saving some money in the process.
Landlords should brace for a mass exodus -- and a suburban influx
While millennials leaving cities may be more of a shorter-term trend relating to the ongoing pandemic, it's still something landlords need to gear up for during the latter part of 2020. For one thing, landlords with city vacancies may need to market their rentals differently, talking up things like extra windows or storage rather than highlighting features like proximity to restaurants and bars. City landlords may also need to prepare to charge less rent in the near term as demand among younger folks declines.
Suburban landlords, on the other hand, have a real opportunity to make money given the number of millennials who may be headed their way. Those looking to attract renters abandoning cities can talk up their ample square footage and outdoor space. It could also pay for suburban landlords who own in townhouse communities to band together in an effort to market to the younger set. After all, renters in their 20s or early 30s are more apt to want to live among similarly aged peers rather than get stuck in a sea of 40-somethings with children.
It's too soon to tell how long the city abandonment trend will remain in effect, and that holds true for millennials as well as members of older generations. A lot of people are reeling right now from the impact of the COVID-19 crisis while simultaneously trying to manage their stir-craziness. It's not an easy situation by any means, and there is a good chance that demand for city rentals will increase once the pandemic ends. But for now, city landlords may need to make concessions while suburban landlords should get strategic to capitalize on a whole new demographic.