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For decades, young college graduates have flocked to major metropolitan cities like New York and Los Angeles. Graduates in Generation Y, however, are eschewing these so-called “primary cities” in favor of smaller “secondary cities” like Houston, where the cost of living is cheaper and job opportunities are plentiful, according to a new Bloomberg LP report.
Millennials – young adults ages 18 to 34 – graduated into the Great Recession saddled with student loan debt. Faced with a weak job market, Millennials are willing to move outside of the typical East and West Coast magnets to cities like the Bayou City. In recent years, Houston added more than 100,000 new jobs annually, attracting scores of young college graduates into the city’s booming and well-paying energy and health care sectors.
Houston is among the top 10 cities nationally with the fastest growing Millennial populations. The Houston metropolitan area saw about a 25% increase in the number of Millennials between 2000 and 2013, according to U.S. Census Bureau data analyzed by Bloomberg. Currently, Millennials make up about 24% of Houston’s total population, according to Bloomberg.
Unlike previous generations of young adults, Millennials are delaying homeownership, eschewing single-family homes in the suburbs in favor of upscale apartments and townhomes in dense urban neighborhoods. As a result, multi-family development has followed Millennials to Houston, according to Bloomberg. Houston saw one of the largest increases in multi-family housing permits among the top 25 largest cities nationally, more than tripling the number of apartment building permits issued between 2010 and 2013, according to U.S. Census Bureau data analyzed by Bloomberg.
However, Houston’s multi-family market appears to be facing economic headwinds. During the oil downturn, Houston’s apartment vacancies are expected to tick up from the current 7.3% due to new supply and a weaker job market, according to Bloomberg’s report.
Article courtesy of Paul Takahashi and Houston Business Journal