Millennials, Gen Xers and baby boomers want homes in these cities: See who likes Portland

As people move through the stages of their life, their housing needs change. In a general sense, young adults want an alternative to rising apartment rents, middle-aged parents want to live near top schools and seniors desire active retirement communities, according to researchers.

Which cities are most attractive to each generation?

Home lender Knock has released its top housing market picks by generation based on affordability, availability and amenities important to each group.

Of the nation’s 100 largest metropolitan areas studied, Knock found Austin ranks No. 1 for millennials (born 1981 and 1996), Miami rises to the top for the Gen X generation (born 1965 to 1980) and Pittsburgh is the best market for baby boomers (born 1946 to 1964).

“The good news is the rise in remote work has given many people the freedom to rethink where they want to live,” said Knock co-founder and CEO Sean Black in a statement.

The price to buy a residential property in the Portland area jumped 15% from 2020 to 2021, and Knock forecasts an additional 9% increase this year, to a median price of $540,878.

Escalating prices in the Portland area are fueled by pent-up demand and a low supply of homes for sale. Well-priced residential properties can receive an offer within a week of being listed, according to Regional Multiple Listing Service (RMLS) reports.

But Portland continues to be a destination for some people looking to escape the high cost of living in California and Seattle, said Alexandra Quintana, a Knock research analyst.

In Knock’s study, the Portland area’s housing market ranks differently depending on the buyer’s age:

Portland ranks 16th for millennials in Knock’s study.

As members of the nation’s largest living adult generation, millennials are feeling the pressure of spiking rents and see the benefit of locking in a low, fixed-rate mortgage.

First-time homebuyers can’t make a contingent offer based on the sale of their existing home, and they need a down payment — often 20% of the sale price — to qualify for a traditional mortgage.

If they have funds for a down payment, a non-contingent offer is attractive to sellers. But without a property to trade, they might need to have around $100,000, which was the typical down payment for the Portland area’s median sale price of just under $500,000 last year, according to national lender Knock.

Some first-time homebuyers are withdrawing from stocks, bonds and mutual funds accounts or are receiving an advance on an inheritance or funds from relatives.

“More inheritances are being gifted early for families to buy a bigger home,” said Lynda O’Neill, a broker with Exceptional Homes by John L. Scott Lake Oswego. “Parents are helping their grown children get a larger home or one with a bedroom suite and living area, an ADU, to accommodate multi-generations living together.”

The best cities for millennials offer affordability, strong job markets and vibrant downtowns, according to the Knock study.

When compared to the 100 largest metros, the 2022 top millennial markets are 11% more affordable and offer 19% more homes for sale on average, the study shows.

Portland is a “less friendly” housing market to millennials than Austin, Texas, where there’s a 2.6-month supply of homes for sale and listings stay on the market for almost a month, said Quintana of Knock, which offers loans for a down payment.

An example: A new, 2,110-square-foot house at 6113 Dumfries Lane in Austin is listed for $519,000, which is close to Knock’s forecasted 2022 median sale price for the city.

Knock’s top 10 millennial markets are innovation hubs with strong tech, finance and health industries as well as a culinary scene, nightlife, sport teams and outdoor activities. Here are the cities, in rank order:

• Austin, Texas (the forecasted 2022 median sale price is $519,005)
• Des Moines, Iowa ($267,060)
• Charleston, South Carolina ($368,613)
• San Antonio ($326,994)
• Atlanta ($372,457)
• Providence, Rhode Island ($408,190)
• St. Louis ($236,620)
• Winston-Salem, North Carolina ($249,840)
• Charlotte, North Carolina ($378,330)
• Spokane, Washington ($426,584)

Knock also found that in these metros, millennials make up 20% to 25% of the population on average. These cities also attract an average of 90% more inbound millennials year over year than the largest 100 metros and have 1.17 times the national average concentration of jobs in the tech, finance and health industries.

Portland ranks fourth for Gen Xers in Knock’s study.

Gen Xers are in the prime of their career and statistically are most likely to have school-aged children. They’re looking for career opportunities, family friendly communities, top schools and cultural and sporting events.

According to Knock, in 2021, the median home in the best Gen X markets was 17% more expensive than the U.S. median-priced home, but offered relative affordability compared to New York, San Francisco and Seattle.

An example: A two-story house with four bedrooms, three bathrooms and 1,702 square feet of living space at 14735 S.W. 90th Terrance in Miami is for sale at $440,000, which is close to the city’s median sale price.

Knock’s top 10 markets for the Gen X generation offer homes with 150 more square feet and 1.2 times more managerial positions than the national average. In rank order, they are:

• Miami (the forecasted 2022 median sale price is $441,093)
• Austin ($519,005)
• Knoxville, Tennessee ($317,953)
• Portland, Oregon ($540,878)
• Boise, Idaho ($521,259)
• Omaha, Nebraska ($267,767)
• Raleigh, North Carolina ($424,684)
• Phoenix, Arizona ($469,542)
• Salt Lake City ($526,447)
• Boston ($637,344)

Portland ranks 47th for baby boomers in Knock’s study.

Traditionally, retirees cash out their homes in the suburbs to live more carefree in active retirement communities with good healthcare and in states with a lower cost of living and tax friendly advantages that allow retirees to stretch their fixed income further.

Americans 60 years and older are more active in the market than a decade ago, crowding out younger home shoppers, according to Pew Research.

Where are boomers going?

Eight out of the top 10 baby boomer markets on Knock’s list are located in warm weather locales and nine are college towns, which allow boomers opportunities for lifelong learning, activities and socializing.

Knock also found that on average, residents of these top cities pay 75% less in sales, property and inheritance taxes than the national average. These cities also have access to 35% more primary care physicians per 100,000 residents than the nation’s 100 largest metros and thousands of active adult communities.

An example: A brick duplex at 1505 Cumberland St. in the Pittsburg metro is for sale at $220,000.

In rank order, Knock’s best markets for baby boomers are:

• Pittsburgh (the forecasted 2022 median sale price is $222,491)
• Lansing, Michigan ($187,095)
• Knoxville, Tennessee ($317,953)
• New Orleans ($276,931)
• Birmingham, Alabama ($273,281)
• Augusta, Georgia ($256,533)
• Greenville, South Carolina ($301,455)
• Palm Bay, Florida ($336,754)
• Jacksonville, Florida ($351,900)
• Tucson, Arizona ($350,503)

Why is Portland so low, in the 47th spot, on the baby boomer list? For this generation, who are traditionally move-down buyers, Portland metro’s projected median sale price is $150,000 over the national average, offering lower savings for those looking to potentially capitalize on their current home’s sale price for savings they can use in the future, said Knock research analyst Quintana.

— Janet Eastman | 503-294-4072

[email protected] | @janeteastman

More on the Portland and Oregon real estate market:

• Biggest Portland real estate bidding wars of 2021: Homes that sold up to $605,000 over asking price

• Portland area’s housing market frustrated buyers with skyrocketing prices, few options in 2021

• Most popular Oregon homes for sale in 2021: Oddball to oceanfront, teardowns to over-the-top mansions were most-viewed real estate listings this year

• Analysis finds property owners in Portland’s most diverse, gentrifying areas hardest hit by code violation fines

• First-time millennial home shoppers face cash-rich baby boomers: ‘Hang in there’