Millennials are quickly becoming a market force which is why the question “Where are Millennials Moving?” is an important one to ask, as where this cohort of the population moves can have a major impact on local economies.
Last month, Pendo, a homegrown tech company with operations in Raleigh, announced it had outgrown its local offices. With state and local governments eager to keep them, Pendo accepted $10.7 million in incentives and will now make Raleigh its world headquarters. Their new downtown office is expected to go from employing 171 people to having 590 on their payrolls, with the average annual wage for those new jobs being $86,824. Pendo’s main service it offers is a cloud-based technology that helps businesses improve their software.
What’s significant about this move is how much it says about the Raleigh-Durham area, and the appeal this region continues to hold for one group in particular: Millennials.
The city continues to attract well-educated young people who are in search of professional job opportunities; this young group is also attracted to the fact that downtown Raleigh has truly become a mecca for millennials, who ride the buses, dine at hip restaurants and go to local concerts.
It certainly hasn’t hurt to have employers like Pendo – or other tech employers, such as Red Hat and Citrix Systems – invest millions in new downtown offices.
In fact, that’s also a key reason why the Raleigh-Durham real estate market is so strong today. Attracting millennials is seen as a key ingredient in making a city exciting and fun to live in – the residents who want to “live, work, play and stay” within the urban area.
And studies bare that out. Forbes has put Raleigh No. 1 among the best places for business and careers and No. 2 among the best cities for young professionals.
And the fact that young professionals keep moving to this dynamic city also means the housing market has plenty of new prospective buyers.
Why Does Raleigh Keep Attracting Millennials?
Last year, employers hired on average 5% more college graduates than in 2016, which prompted NerdWallet to do a study on which cities offered the most economic opportunities. Looking at the percentage of the population ages 20 to 29 with a bachelor’s degree, the cost of living in major cities and the types of jobs available, they ranked cities with lots of young adults and educated residents, calling those cities “Top Bets.”
And coming in the Top 10 on their list was Raleigh, the capital of North Carolina, and a city that has grown by more than 60% since 2000.
As NerdWallet noted, Raleigh and its surrounding suburbs has become the home to numerous multinational companies in technology, life sciences and finance. The city ranks highly when it comes to the percentage of workers in management, business, science and arts jobs. Raleigh also ranked seventh for the percentage of residents 25 and over with a bachelor’s degree, about 32%.
The presence of North Carolina State University and North Carolina’s tri-city university hub, called the Triangle, is another key reason who so many young people come here to study – and decide to stay. Attracted by the vibrant downtown nightlife and cultural scene, Raleigh has become home to a population that’s increasingly young, diverse, and well-educated.
And not surprisingly, if tech jobs attract young people, the inverse is true: tech companies like to settle in cities that have a good supply of well-educated, skilled workers.
Moody’s Analytics notes that Raleigh has become a hotspot for jobs, and the region’s jobs base is expected to grow 9.6% by 2022.
Forbes has ranked Raleigh among the top 10 cities for jobs, noting that Raleigh has experienced a whopping 17.25% job growth over the past five years.
It helps that Raleigh’s cost of living is considered to be relatively low compared to other big cities.
Those are all key reasons why millennials continue flocking to the Triangle: great job opportunities, the ability to raise a family, and a booming downtown.
MagnifyMoney recently released its list of America’s top boomtowns, and both Raleigh and Durham were in the Top 20. Raleigh came in sixth on the list, and the study noted that between 2011 and 2016, Raleigh’s millennial population increased by 12.7 percent, as the city’s millennial workforce grew by 23.6 percent, the fourth largest increase in the country. Raleigh came in at No. 4 for its share of millennials in the workforce.
How Are Millennials Impacting the Housing Market?
The Downtown Raleigh Alliance has noted that a lot of millennials want to be close to the downtown – “close to the action,” as they say – but many of those young families are also starting to leave their downtown apartments to pursue home ownership in the region. They’re looking for more space to grow in.
Nationally, homeownership rates for millennials are estimated to be between 32 to 35 percent, while the National Association of Realtors found that the majority of buyers under age 36 are buying in suburbs. And standalone properties are the most popular choice among those buyers. NAR reports that 85 percent of buyers under 36 are purchasing detached single-family homes.
If a lot of millennials are finding it too expensive to live in cities like Los Angeles, San Francisco and New York City, secondary real estate markets have proven to be very popular with those millennial buyers, including in Austin, Charleston, Denver, Seattle, Minneapolis, Salt Lake City – and Raleigh. Those are proving to be some of the most popular destinations for these young buyers.
And Raleigh’s housing market is doing quite well these days.
Trulia notes that the media sales price there is $260,000, well below the sky-high prices in cities like Los Angeles and New York.
And Zillow’s list of the “Hottest Housing Markets for 2018” gave Raleigh the No. 2 spot, based on rising home values, steady income growth, abundant job opportunities and low jobless rate.
That combination of a strong economy and affordable housing market has brought an influx of people to Wake County. Estimates are that the county is growing by 73 people a day, all of whom are looking for a place to live.
And a growing number of these newcomers are millennials, many of whom are first time home buyers. Some of this group will likely start off in apartments in downtown, but eventually, their families outgrow that space and are in need of more room, which is when they start their house hunting.
Either way, millennials are finding exactly what they’re looking for in the Raleigh area: plenty of good jobs, lots of fun things to do, and an appealing housing market.
The studies are not wrong. Millennials truly are coming to Raleigh for a reason.
So where are Millenials moving? The Greater Raleigh-Durham area, of course.
The Greater Raleigh-Durham area has joined the ranks of cities and metros areas that offer a great deal for millennials. While a lot of young families come here for the vibrant jobs market, there’s a lot to keep them happy while they’re here, including plenty of cultural attractions.
A strong real estate market where homes are still affordable, combined with terrific job growth and a high quality of life, helped put Raleigh on the map as a city where first time home buyers have a lot of good options as to where to live.
If you’re relocating to this area, have lived here a while and are ready to buy your first home, or are thinking about retiring here, contact us at Waterford Green Communities.
At Waterford Green Communities, our team of experienced home builders and community development professionals take a lot of pride in building homes in this region that are immaculately designed and appealing to families of all sizes. There won’t be a problem matching your budget.
Our team designs homes with the highest quality materials, and we believe that every family deserves a beautiful place to call home.
We’re here to answer all your questions about our new homes. Contact us today at 919-629-1329 and let’s get you started on the path to owning your new home.