Top Cities Where Millennials Rule, Gen Xers Dominate & Boomer Move The Market ~ Tucson Arizona

The Top Cities Where Millennials Rule, Gen Xers Dominate, and Boomers Move the Market


Work-life balance, parenting, retirement—each generation handles these life challenges in a different way than the one before. And that helps explain just where each group is putting down roots.
Millennials are opting out of the bright lights, big city lifestyle for more affordable small cities. Baby boomers facing retirement want walkable communities with urban amenities, not just 55-plus developments. The perpetually forgotten Gen Xers? They’re splitting the difference, opting for larger and more expensive markets while they have the cash to do so.
But there’s a sea change happening as millennials, the largest U.S. generation ever, truly come into their own. It’s already having far-reaching repercussions across U.S. housing markets, according to a new report by the® economic team on home buying across generations.
“For the first time, we’re finally seeing evidence of millennials outcompeting older generations in more markets than not,” says Javier Vivas, director of economic research at “If millennials continue to grow [their market share] at this pace, we expect them to buy more homes than Gen X and baby boomers combined in the next year.”
Still, the major factors motivating buyers remain the same: growing families, the requirements of work, and the combined freedom and restraints of retirement.
“Life stages is what drives demand in housing,” Vivas says.
So which are the markets that have what each generation needs most to buy a home and build a life? To find out, the economic team looked at the current share of home mortgages taken out by each generation and the change in that share from last year. These were combined to yield a generational “score” that we used to rank housing markets seeing the most activity from each generation.
OK? So let’s take a deeper dive into the places millennials, Gen Xers, and boomers are most likely to call their own. Get ready for a few eye-openers along the way.

Millennials: Playing it safe with starter homes

Top Metros for Millennials
Top Metros for Millennials

Tony Frenzel

For millennials trying to break into homeownership in an era of high prices, affordability is key.
“For many of them, this is really the most expensive time they’ve seen since they’ve entered the market,” Vivas says.
So while they might crave the excitement of urban life, they’re turned off by the high prices of the largest metros.
“Young millennials want to flock to the bright lights. They go to cities, where the action is,” says Dowell Myers, a demographer and professor of urban planning and public policy at the University of Southern California, Los Angeles. “But housing is in short supply and it’s very expensive. So they get pulled away to [the suburbs] or smaller metros.”
So what are millennials searching for?
“They’re looking for a house they can afford. They’re looking for communities they want to be in. They want to be in a place where they can find steady employment,” says Jason Dorsey, president of the Center for Generational Kinetics, which does marketing research on Gen Z and millennials.
The top 10 metros for millennials (those born between 1982 and 2000) that we identified all fit this bill, and they have high homeownership rates among the youngsters to prove it—an average 47% of 25- to 34-year-olds own a home, compared with 43% in the largest 100 metros.
But there’s a downside—the overwhelming demand for affordable homes in the Midwest and Northeast is seriously depleting inventories. The good times may not last, kids.
For now, though, Grand Rapids, MI, claims the most millennial cachet.
“It’s a city where there’s enough to do but you can still travel around in it within 15 to 20 minutes,” says Steve Volkers, a broker at Berkshire Hathaway HomeServices Michigan Real Estate in Grand Rapids. “You have the availability of good arts, a really great food scene, a number of big breweries in town.”
While the average sale price is in the $240,000 to $250,000 range, millennials are looking for slightly cheaper homes, Volkers says. And they’re finding them in starter neighborhoods like Alger Heights, where $175,000 to $200,000 gets you a single-family home with a yard and garage in a walkable area; or Cedar Springs, in the north suburbs, where a newly built three-bedroom with 1,500 square feet can be had for $200,000 to $250,00.
Salt Lake City is another millennial mecca. According to Kenny Parcell, a real estate agent with Equity Real Estate in Salt Lake City, the predominant home buyers here are either grads of local colleges who stuck around or folks coming in to work in “Silicon Slopes,” as the local tech industry nestled among ski resorts is known.
“There are a lot of job transferees from the California market,” he adds. “They pay a lot less in taxes and home prices.”
Downtown tends to be too pricey for millennials, pushing younger families into the suburbs, where $300,000 to $400,000 or so can buy a two- to three-bedroom house with a yard. Draper, Sandy, Harriman, and South Jordan are all popular towns because they’re affordable and close to the freeway and public transit.
The presence of Scranton, PA, at No. 3 at first seems like a head-scratcher. Do millennials really like “The Office” (whose fictional Dunder Mifflin paper company was based there) that much?
It turns out, Scranton just happens to be one of the very few markets with homes under $160,000. With such a low bar to ownership, millennials account for well over 50% of mortgages in the metro.
The former mining and railroad town was one of many in the Rust Belt that lost jobs and population in the second half of the 20th century, but its population has stabilized in recent years. Although the city skirted bankruptcy in 2012, a revitalization effort downtown has created a vibrant, walkable community with the loft-style apartments that millennials love in architecturally significant buildings.

Generation X: Throwing money at the issue

Top Metros For Generation X
Top Metros For Generation X

Tony Frenzel

In many places, the “sandwich generation” is getting squeezed out of the market by the up-and-comers—millennials were taking out 44% of home loans in September by value, whereas Generation X’s share of the market fell to 39% from 41% the year before. But when they do buy, Gen Xers (born between 1965 and 1981) purchase homes that are on average $49,900 more expensive than millennials’ purchases. Take that, youth culture!
On the whole, the real estate markets dominated by Gen Xers are significantly larger, more urban, and more expensive. Several of them are also investment hot spots.
No. 1 on the Gen X list is Memphis, TN. Here, many of the buyers are also selling their starter homes in order to get more space and a more desirable location.
“Gen X buyers are move-up buyers,” observes Bob Peterson, an agent with Keller Williams Realty in Memphis. “Their families are growing, and they’re getting out of an apartment or a smaller house. They [are also] more concerned about schools.”
“The appeal for Gen Xers is the quality of life for families, because Memphis offers the amenities of a large city along with a friendly and approachable character of a small town,” says Holly Whitfield, who runs a blog called I Love Memphis.
The downtown area can yield some lovely homes along the river, from $300,000 up to $1 million. Midtown has more traditional homes, often remodeled and updated.
Peterson sees midcareer types moving to Memphis for employment, including at FedEx and in the military. Memphis—along with Lakeland, FL; Raleigh, NC; and Knoxville, TN, also on this list—also has a fairly high share of investor sales. Perhaps those Gen Xers are exercising some hard-earned real estate savvy.
The nearby city of Arlington, TN, also gets a lot of Memphis overflow—it’s about a half-hour away, and you can get a newly built three- or four-bedroom home for the mid- to high-$300,000s, he says.
Such deals are scarce in the Los Angeles metro, which ranked No. 2 for Gen Xers.
“The difference between buying a home in Memphis and buying a home in Los Angeles is about $750,000,” says Boni Bryant, who leads a team of agents along with Joe Reichling at Compass Hollywood brokerage, in Los Angeles.
Bryant says most of their clientele are in their 40s and 50s, because the market in Los Angeles is difficult to get into at the ground level—an “entry-level” home often goes for $1 million or more. And that typically means you’d need a household income of $500,000 or more, with $200,000 in cash for a down payment.
Bryant and Reichling’s clients are often looking for homes in Los Feliz, Silver Lake, and Hancock Park, which are accessible to Hollywood, downtown L.A., and the studios in Burbank. (Here’s a sweet three-bedroom in Hancock Park, for a cool $2.1 million.) Some people who want a bit more of a suburban vibe move to Altadena or South Pasadena, northeast of downtown L.A.
On the other side of the country, well-heeled Gen Xers working in New York City favor Stamford, CT, in leafy, ultrapricey Fairfield County, which has easy train commute to Manhattan and plenty of amenities.
“The folks I see are getting out [of New York City] because of the high taxes and [lower] quality of life,” says Martin Nirschel, an agent with William Raveis Real Estate in Stamford.
For $600,000 and up you can certainly have an elevated quality of life, as in this four-bedroom home for $620,000. Nirschel notes that the Gen X buyers he sees don’t have the patience for renovations; for a newer home that’s more turnkey, you’re looking at $800,000 and up.

OK, boomers: Time to take it easy

Top Metros For Boomers
Top Metros For Boomers

Tony Frenzel

Baby boomers (born between 1946 and 1964) may have dominated American cities in the ’80s, but as they approach retirement they’re more drawn to lower-tax states and smaller metros with a reasonable cost of living. And, just as with previous generations, they’re attracted, like lemmings, to warm-weather locales—why bundle up for the elements and shovel snow if you don’t have to?
Seven of the top 10 markets dominated by boomer buyers are in warmer locales, equally popular with vacationers and retirees—so many buyers are, in fact, picking up a second home.
No. 1 Tucson, AZ, offers that balmy weather in combination with a vibrant downtown and housing that’s inexpensive compared with pricey coastal cities, if not exactly cheap.
“It’s big enough to have basic amenities, good restaurants, good shopping, and a lot of activities throughout the year,” says Arthur C. Nelson, professor of planning and real estate development at the University of Arizona in Tucson.
According to a 2015 report by Downtown Tucson Partnership, 17% of residents living within a mile of downtown were aged 55 and older. Boomer buyers are flocking to higher-end rental apartments, which go for $1,500 to $3,000 a month, or to the historic neighborhoods just outside downtown, where bungalows starting at 1,500 square feet go for $300,000 and up. (This three-bedroom Craftsman, listed at $390,000, was built in 1905!) In suburban neighborhoods like Oro Valley and Marana, a buyer could get a much larger house on a quarter- to half-acre lot starting in the mid-$300,000s.
Nearby in Albuquerque, NM (No. 3), Paul Wilson, an associate broker with eXp Realty, says, “Most of the relocations we’ve had have been boomers.”
Albuquerque residents also enjoy that dry and sunny Southwest weather, and there’s an excellent veterans hospital, Wilson notes.
Buyers “can get a nice ranch house with space for anywhere from $170,000 to $300,000. The better neighborhoods will cost a little more,” he says. The Northeast Heights area offers good value, where this three-bedroom home is just $289,900.
The Sunshine State still has an irresistible attraction for retirees (or almost-retirees)—Cape Coral (and adjacent Fort Myers), at No. 2, is one of three Florida metros on the boomer hit list.
“We have some of the most affordable waterfront property in the country,” says Susan Christiano, an agent with Engel & Volkers in downtown Fort Myers.
In fact, you can buy a waterfront home for under a half-million dollars in Cape Coral—like this four-bedroom home on a canal, with easy access to the islands just offshore and the Gulf of Mexico. It’s a boater’s dream.
Fort Myers, on the other hand, offers no-hassle living, amenities, and social structure in its planned communities—although they’re not necessarily for the 55-plus group. This gorgeous, modern three-bedroom home, for example, is in a golf course community with amenities, including a pool, clubhouse, and tennis and bocce courts.
It’s not all fun in the sun, though—boomers also made a strong showing in Dayton and Akron, OH. If it weren’t for the fact that we’ve seen affordable Ohio display its dominance in our hottest markets ranking, we might be shocked!
Toby Parks, Senior Real Estate Specialist
Long Realty
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