Older Millennials Leaving The City For Urban-Like Suburbs

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Older Millennials Leaving The City For Urban-Like Suburbs

John Burns Real Estate Consulting’s latest research shows older millennials are leaving the city for urban-like developments in the suburbs which he calls surban.

By Annie Radecki

Senior Manager

John Burns Real Estate Consulting

The top-grossing restaurant in the Philadelphia metro used to be a French bistro in ritzy Rittenhouse Square, but a suburban mini-chain is now hot on its heels.

Philadelphia restauranteurs scoff at its success because City Works lies 20 miles outside of the actual city in the mixed-use Village at Valley Forge in King of Prussia, PA.

Before its redevelopment from a failed golf course into a surban center, King of Prussia was best known for its regional mall, IKEA, bad traffic, and empty, dated office buildings.

Today, the suburban Village at Valley Forge offers a full calendar of community events, 24-hour Wegmans, REI, several healthy fast casual restaurants, bike trails, walking trails, and a new Children's Hospital of Pennsylvania. Hanover and Cornerstone offer luxury apartments, and Bozzuto recently broke ground on the area’s first age-restricted (55+) apartments.

Toll Brothers recently opened the Brownstones at the Village at Valley Forge and have sold almost 40 units since opening last fall.

What Is Surban And Why Are Older Millennials Are Moving There?

John Burns Real Estate Consulting describes surban as a suburban area that has the feel of urban, with walkability to great retail from a house or apartment. This is what appeals to the older millennials.

Urban areas abound with vibrant restaurants, public transportation, and plenty to do. But urban rents and home prices cut deeply into resident incomes. Urban schools tend to rank low, and crime tends to rank high. For all of these reasons, families tend to move to the suburbs, Burns writes.

“Mature suburban areas took note of urban revitalization. City leaders redeveloped their downtowns or zoned an area for a vibrant mix of retail, housing, and sometimes jobs. Urban planners call these areas ‘mixed use,’ but surban better describes the mix of urban and suburban living. We trademarked the term, but everyone has permission to use the word surban without the trademark. We just want credit for coining the phrase,” Burns writes on the website.

Who Are Older Millennials Moving Surban?

“If you ask a Sharer (our nickname for those born in the 1980s) living in the city about who’s moving to surban five years ago she might have replied, “I don’t know why anyone would move out there,” Radecki writes about the older millennials.

Ask now, and she might report friends who got tired of a long and congested reverse commute and moved closer to work. Another friend, who had her first child, got yelled at for blocking the aisle at an urban Whole Foods with his stroller and liked that Wegmans (a spacious and high-quality local chain) was within walking distance rather than over the bridge in New Jersey.

In the early 2000s, builders in Philadelphia successfully sold exurban homes to family buyers fleeing the city. Demand for these homes evaporated as Sharers delayed home purchases, choosing to live in places like gritty (yet trendy) Fishtown. Today, that glut of exurban move-up homes remains, and successful builders have shifted their focus to suburban infill neighborhoods in the “little towns” of the inner-ring suburbs.

People Who Drove Urban Demand Will Now Drive Surban Demand

The same people who drove urban demand from 2005–2015 are about to drive demand for surban housing in inner-ring suburbs, especially those in mature and slower-growing cities. There is also a difference between the older millennials and the younger millennials.

 America’s population for 20-somethings grew by 4.7 million people from 2005–2015 and is projected to decline slightly from 2015–2025.

Here are some more reasons for the shift to surban that our consulting and demographics teams have noted:

  • 1980s Sharers who don’t like driving can minimize commutes or be close to transit that doesn’t require a car.
  • Older Main streets offer the authenticity Sharers crave.
  • High-quality grocery stores accommodate Sharers’ thriftiness and foodie-ness.
  • Better schools
  • Yards have room for dogs and/or toddlers.

The Village at Valley Forge is just one of many successful projects around the country our consulting team has visited or helped our clients develop.

Examples of Surban Areas Include:

  • Reston Town Center in Washington, DC, suburb of Reston, Virginia
  • Downtown Naperville, Illinois, in the suburbs of Chicago
  • Old Town Pasadena, California, in the suburbs of Los Angeles
  • A-Town in Anaheim, California, in a neighborhood around the Angels Major League Baseball park
  • Legacy Town Center in Plano, Texas, in the suburbs of Dallas
  • Santana Row in San Jose, California, on a former run-down mall site
  • City Centre in Houston, Texas, on a former run-down mall site
  • Downtown Tempe, Arizona, in the suburbs of Phoenix
  • Larkspur, California, north of San Francisco, with new housing sandwiched between a top-notch high school and a rejuvenated old downtown
  • Geneva, Illinois, in the suburbs of Chicag

Contact us to find out how we can help you identify surban opportunities with our proprietary tools and custom consulting analysis.

About the author:

Annie Radecki, Senior Manager, John Burns Real Estate Consulting, produces insightful research on a variety of topics and provides our clients with deep knowledge of markets and their drivers across the United States.Before joining John Burns Real Estate Consulting in 2015, Annie was the Director of Market Intelligence for PulteGroup where she developed local segmentation, acquisition, and operational strategies for the Texas, Pacific Northwest, and Southeast markets. Annie holds a B.A. in Architecture and Urban Studies from Yale University and a dual MBA/Masters’ of Regional Planning from the University of North Carolina at Chapel Hill. She is based in our Pacific Northwest office.

If you have any questions, please contact Annie at (971) 279-7379 or at aradecki@realestateconsulting.comLearn more about our research and consulting services.

You can learn more about the surban trend in John Burns book Chapter 10: A New Surban Way of Life Big Shifts Ahead: Demographic Clarity for Businesses

In their latest book, Big Shifts Ahead, John Burns and Chris Porter wrote a whole chapter on the shift towards surban living and it’s potential impact on businesses going forward. They support everything with easy-to-read charts and plenty of facts. Those interested in this up-and-coming trend in housing should read this book.

Older Millennials Leaving The City For Urban-Like Suburbs

Photo credit monkeybusinessimages via istockphoto.com

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