According to Dave Robison, aka “Utah Dave,” president of the Salt Lake Board of Realtors and owner of Gobe Realty, the millennials’ reputation for not being ready to buy and only renting is no longer true. “They are ready to have homes of their own,” he said. Among the reasons encouraging them to buy homes is that bank interest rates haven’t been this low for a very long time, Robison explained. Millennials currently make up 40 percent of Utahns buying homes.
Nationally, the oldest millennial is 35 years old, while the majority of millennials are now 25 years old. By 2000, this new group of consumers already outnumbered baby boomers in Utah. According to the U.S. Census Bureau, Utah is the youngest state in the nation with 32 percent of the population under 32 years old. What is even more significant is that the proportion of Utah’s population of millennials is the second-highest in the nation behind Washington, D.C. Based on 2012 census estimates, governing.com reported that 32 percent of Utahns are millennials, compared to the lowest percentage, in Maine at 23.8 percent.
According to realestate.aol.com, after the Great Recession hit, the next great wave of first-time homebuyers –– the millennials –– couldn’t rise to the occasion; this generation was either still in school, trying to bolster their careers or moving back with their parents. Although fashionably late, they have finally made their entrance onto the real estate scene.
Robison’s experience has been that millennials are not keen on one location, but are open to the suburbs, like the ones in southwest Salt Lake County. “They are looking for a combination of good cost, a yard, modern look and close proximity to work.” He also said that many of them are looking for townhouses and condos –– places they can afford, as many millennials are only on their first or second job.
“There are a ton of people moving in from out of town,” said Robison. He acknowledged that job opportunities, like those in the tech industry, are driving a lot of people here. “The valley will increase by another million by 2040,” he added.
Lawrence Yun, the chief economist at the National Association of Real Estate, published a recent article that said, “Limited job prospects, student debt and flat wage growth have combined with tight credit conditions and low inventory to price millennials out of some of the top cities, such as New York and San Francisco.”
As an alternative, the NAR reported in 2014 that millennials are moving to places where jobs and houses are more obtainable. Salt Lake City and Ogden were listed on the top 10 list out of 100 markets that were forecast to grow in millennial home buying for 2015.
In a report issued by the White House called “15 Economic Facts About Millennials,” the President’s Council of Economic Advisers reported that the millennial generation will continue to configure the nation’s economy “for decades to come” and baby boomers will be retiring and some even moving to assisted living facilities. For this reason, the council encouraged real estate investors to pay attention to where the next generation will be buying real estate.
Concerning what attracts millennials, the NAR said, “They value their neighborhoods as much as their homes. They also prefer open, single-story floor plans, wood or tile flooring and environmentally friendly ‘green’ features.”
“They like to live in a more urban, walkable neighborhood like Sugar House with access to public transportation and walking distance to social events. They like spaces that are newer or remodeled already,” said John Patton, a licensed agent broker for 30 years, located in Salt Lake City at Summit Sotheby’s International Realty and owner of Patton Group Properties. He added, “They are very knowledgeable buyers. I think they study up on how to buy before they call a Realtor.”
Outside developers known for redesigning and renovating rental properties and marketing them to millennials have tapped into the Utah market. Recently, Timberlane, a Seattle/Los Angeles-based real estate investment firm which has been called “The Hipster Real Estate Developers” by Bloomberg News, purchased Pierpont, 250 S. 300 W., Salt Lake City, an old-fashioned, eye-catching, brick building with quirky stores and close, “happening” coffee shops. They also bought The Mercer, located at 556 E. 300 S., Salt Lake City, known for its location by Trolley Square –– with a Whole Foods embedded –– and t light rail.
The investments’ profile seems to fit with past investments made by Timberlane in both Seattle and Los Angeles as being ideally located with potential for modern upgrades catering to a millennial’s lifestyle.
The firm has not yet announced its plans for its Salt Lake City properties.