As greater numbers of young adults go in search of affordable housing, some are eyeing the cheaper homes to be had in states such as Ohio, Michigan and Wisconsin.
These states, collectively known as the “Rust Belt”, have seen their populations decline in recent years due to widespread job losses in the manufacturing and plant sectors. However, the region may see a resurgence due to the influx of millennials looking to own a home.
Constantine Valhouli, director of research for NeighborhoodX, told CNBC that it’s not only the lure of affordable homes that are drawing younger adults to the area:
“It is about having roots and contributing to the revival of a place that needs businesses that create jobs and create value,” he insisted.
However, Paul Boomsma, president and CEO of Leading Real Estate Companies of the World, said millenials also see financial opportunities in the Rust Belt cities, and that they’re tempted by home prices which are often far below those cities on the East and West coasts.
“Millennials are swiping up properties for next-to-nothing prices near downtown city areas that have completely revitalized,” Boomsma said.
Interestingly, some millennials may not even work in the cities they choose to buy property in, due to the ability to work online.
“More and more people are now working virtually, which means they do not need to be in their office and can work from almost anywhere,” said Ralph DiBugnara, senior vice president at Residential Home Funding. “So why not find somewhere to live where your city dollars can go a lot further?”
The influx of millennials in some Rust Belt cities is so strong that it’s creating an increase of demand for apartments in the area.
And these apartments, in turn, help to spur economic revival in what were once very depressed areas, serving as a “catalyst for retail, grocery and office development,” said Todd Stofflet, managing partner at the KIG CRE brokerage firm.
“As downtown populations experience a resurgence, so does the dining, entertainment, and lifestyle of the area,” Stofflet said.
Great article Mike! I am a real estate appraiser in Cleveland, OH. I definetly see this in our area. Especially in trendy urban neighborhoods in Cleveland and Akron. It’s great to see!