About 67 percent of people moving to San Diego are millennials, but that is behind Madison, Seattle, Honolulu, Los Angeles and Toledo. Only about 2 percent of millennials that move to San Diego metro area can afford a home, lower than most spots millennials are moving.
A lot of millennials move to the San Diego metro area, but it is not the top destination for America’s largest working generation.
Madison, Wisconsin, had the largest percentage of millennials move to the region in 2017 at 75 percent, said a new study from the National Association of Realtors. The San Diego metro area had around 67.1 percent move to the area, said 2017 Census data analyzed by the association, making it the No. 13 destination for millennials out of 100 metros.
San Diego metro still had one of the highest percentages of millennials in the nation — 27 percent — above the national average and bigger than most of the top destinations.
Yet, the data showed top regions millennials move to, in addition to Madison, were New Haven (Connecticut), Grand Rapids (Michigan), Syracuse (New York), Richmond (New York), Honolulu and Los Angeles.
“We see that millennials are moving to areas with strong employment and wage growth,” said NAR economist Nadia Evangelou.
Getting millennials to move to San Diego has been a concern of business leaders who are struggling to fill highly skilled jobs. The San Diego Regional Economic Development Corp. launched a campaign last year to attract workers, many of whom are millennials, in the science, technology, engineering and math, or STEM, fields.
In March, the job with the most advertisements in San Diego County was for software developers. Big tech-heavy firms also had the most job advertisements: Northrop Grumman had 562 open positions, Qualcomm had 344 and General Atomics had 289.
Millennials who moved to the San Diego region made a median annual income of $63,100 in 2017. That was higher than many of the top places millennials moved to but housing affordability was much lower.
The Realtor study said 2 percent of millennials who moved to San Diego metro could afford to buy the median price home. That ranks San Diego metro at No. 96 (tied with Oxnard) for affordability, making it one of the toughest places for millennials — those born from 1980 to 1998 — to own a home out of 100 metro areas.
Based largely on incomes, San Diego and Oxnard metros were among the least affordable places for millennials to own a home in California. Four percent of millennials who move to Los Angeles could afford a median price home, 6 percent in Sacramento and San Jose, 9 percent in Riverside and 15 percent in San Francisco.
Dayton, Ohio, was the most affordable metro for millennials to own a home. In 2017, 56 percent of new residents were millennials and 54 percent could afford to buy.
The places millennials moved to least in 2017 were all in Florida: Fort Myers, Lakeland, Palm Bay-Melbourne, North Port-Sarasota and Tampa.
While business leaders often warn about a loss of jobs to Texas from California, it appears millennials are not as sold on the benefits of the Lone Star State. Dallas was the No. 39 destination for millennials in 2017, despite 10 percent of those moving there being able to afford a home. Austin was the No. 48 destination with California-like affordability: Three percent of new millennials could afford a home.
Evangelou said a major purpose for the study is identifying if millennials will stay in place once they move somewhere. Part of that is seeing a large percentage of millennials already there, if they can afford to buy a home and income growth. Madison, Wisconsin, not only had the most millennials moving to the area but also the biggest share of millennials already there at 32 percent. Twenty-nine percent of those moving to Madison could afford a home, the Realtor study said.
“They don’t stay in some places because they can’t afford to buy (a home) and raise a family,” she said. “We’re looking for those people that want to raise a family in those places.”
The Realtor study comes out at the same time as a report from Apartment List that addressed similar issues with affordability. The real estate website said housing markets across the nation were creating bigger gaps between rich and poor.
While the phenomenon is not new, researchers said the share of income going to housing is now further apart for the top earners and bottom earners when looking at data going back to 1980. Those who owned homes (typically higher earners) were seen as in a better position because they may have been able to refinance and income has increased relative to monthly payments. On the other hand, renters (typically lower earners) were seen as in rough shape because of rent increases outpacing income growth.
In San Diego metro, the lowest 25 percent of earners pay 28 percent more in housing costs than the highest earners (the 10th percentile).
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Top metro areas millennials are moving to
Based on 2017 Census American Community Survey
Madison, WI - 74.98 percent
New Haven-Milford, CT - 74.70 percent
Syracuse, NY - 73.30 percent
Grand Rapids-Wyoming, MI - 72.70 percent
Richmond, VA - 70.50 percent
Urban Honolulu, HI - 70.20 percent
Seattle-Tacoma-Bellevue, WA - 69.60 percent
Toledo, OH - 69.40 percent
Los Angeles-Long Beach-Anaheim, CA - 68.50 percent
Durham-Chapel Hill, NC - 67.90 percent
Omaha-Council Bluffs, NE-IA - 67.50 percent
Provo-Orem, UT - 67.30 percent
San Diego-Carlsbad, CA - 67.10 percent
San Jose-Sunnyvale-Santa Clara, CA - 67.10 percent
Boston-Cambridge-Newton, MA-NH - 66.80 percent