Millennials Are Moving To The Emerald City

By RSIR Staff |

Given the strong tech-driven economy and vibrant downtown core, it doesn’t come as much of a surprise that Seattle is among the most popular U.S. markets for millennials. According to® research, the Emerald City is the second hottest spot for millennials, who are drawn to its lucrative tech jobs and vibrant cultural offerings.

Analyzing data from the U.S. Census Bureau, home searches and percentage changes in homeownership, researchers found that in spite of high cost, millennials are overwhelmingly gravitating to tech centers because they offer not only the biggest paychecks, but also the type of lifestyle that young adults seek. As the report describes, thriving job markets are paramount to millennials, where they can access an eclectic nightlife scene with trendy eateries and bars.

Millennials have been leaping into homeownership for some years now, but are quickly becoming the largest share of home purchases in the United States. As the® National Housing Forecast predicts, millennials will account for 45 percent of mortgages in 2019—compared to 37 percent of Gen Xers and 17 percent of Baby Boomers.

Though it is expected that some first-time buyers may struggle in the coming year amidst rising mortgage rates and home price appreciation,® says move-up millennials buyers will dominate the market in the coming year. Looking even further ahead, 2020 is what many are calling the “peak millennial homebuying year,” with the biggest group turning thirty that year. Millennials will likely retain their position as the largest share of generational home buyers for the next decade or so, as their housing needs shift.

Millennials are choosing to call Seattle—and many of the top ten cities—home because of a strong tech economy. According to the Tech-30 Report, compiled by large commercial brokerage firm CBRE, Seattle was the top U.S. market in 2018 with high-tech jobs increasing by a staggering 26 percent in the last two years alone.

To be sure, the Seattle metro area has become a magnet for both new and established tech companies, which are drawn to its relative affordability compared to Silicon Valley and prevalence of national tech centers that draw excellent talent to the region. As Realogics Sotheby’s International Realty reported in early autumn, the average salary of a software engineer in Seattle is $108,000 compared to $118,000. This $10,000 difference is rapidly offset by California’s state income tax—which reaches as high as 13.3 percent—and by the very high cost of housing, whether renting or owning. Taking a number of factors and differences into account, Seattle tech professionals enjoy a roughly 73 percent increase in disposable income when compared to their Bay Area colleagues.

Bay Area tech titans like Facebook, Google, Apple, UBER, Oracle, Adobe, Dropbox and Twitter are just a few companies headquartered in California, yet collectively populate more than 2.5 million square feet of Seattle-area office space. Google and Facebook alone will occupy another 1.5 million square feet by 2020, which will bring another 10,000 high-paying tech jobs to Seattle in the short term. This is on top of the meteoric growth at Amazon, which already controls more than 11 million square feet of office space in downtown Seattle.

The map below illustrates the location of existing and planned high-tech campuses and other large employers in the region along with primary transportation routes and subject communities.

Tech by the Numbers — Seattle

  • Amazon now owns twice as much office space as it did in 2016 and will reportedly occupy 15 million square feet of office space throughout downtown Seattle with current commitments.
  • Apple is expanding within Two Union Square with more than 70,000 square feet to office 500 employees (rumors persist that it is making offers on larger office space).
  • Google continues to expand in South Lake Union (with five buildings either under construction or in planning), comprising nearly 1 million square feet of office space with occupancy expected by early 2019—the downtown Seattle campus could employ more than 4,500 people.
  • Facebook has opened a new campus at 1101 Westlake, in addition to other leaseholds in South Lake Union, with current capacity for 3,000 employees. The social media giant recently applied for permits for Oculus expansion of more than 60,000 square feet of office space in the Home Plate Center near Safeco Field in SODO. It’s presumed the company leased all 124,000 square feet of the available space, but is merely building out the first half at this time with future plans to grow into the remaining space.
  • F5 Networks has leased 516,000 square feet in a new office tower (now called F5 Tower) with an estimated 1,500 employees and room to expand. Excess office space is temporarily being sublet and attracting other employers.
  • Expedia plans to relocate its Bellevue headquarters to Interbay (Seattle waterfront) in 2019 in what may eventually comprise of 1.9 million square feet of office space for approximately 8,000 employees (recent indications suggest the company will moderate its growth in measured phases). Many Bellevue-based employees will either relocate to Seattle or face an arduous commute.
  • WeWork Northwest continues to expand in the Seattle region and is eyeing a total of 2 million square feet of office space in the greater Seattle area with new commitments in the World Trade Center North building and a 36-story tower being developed in Belltown (this tenant is critical for future growth in tech as many startups are incubating in co-working environments).
  • Martin Selig Real Estate just announced commencement on two speculative office projects without any tenant preleases at 400 Westlake Avenue in South Lake Union and at 1015 Second Avenue – combined the projects will deliver 400,000 square feet of Class A office space by 2020.

Tech by the Numbers — Eastside

  • Amazon occupies one office tower in Bellevue with 2,000 employees and plans for another with the potential of adding another 2,500 employees by 2020—that’s about 10-percent of the regional headcount.
  • Vulcan Real Estate is planning 3 million square feet of office space—likely to target additional expansion of Amazon and other tech users. This developer is very close to tech growth and their commitment to Bellevue is a strong signal of additional tech expansion in the region.
  • Tableau Software has preleased 180,000 square feet of Kirkland Urban for occupancy in 2019.
  • Facebook will reportedly develop 650,000 square feet of office space in Redmond and along Willows Road for their Facebook Reality Labs/Oculus campus, according to public records.
  • Microsoft is doubling down on its own campus rebirth with a multi-billion-dollar expansion that could office upwards of 8,000 employees. The direct connection to LINK light rail means Microsoft employees could choose to live in downtown Seattle or downtown Bellevue and enjoy reasonable commutes to Redmond.
  • SRM is planning a 136,000 square foot building adjacent to Google’s Kirkland campus, likely for Google’s continued expansion.
  • Rumors persist about expansion of Alibaba and other international tech companies seeking growth in the region (including potential leases at Southport on the Renton waterfront).
  • While not tech-oriented, Costco Wholesale recently announced plans to expand its Issaquah headquarters by 1.2 million square feet with room for 4,000 employees. Again, eventual LINK light rail service to Issaquah affords employees the option of living in an urban market or commute by train to work.

Seattle’s relative affordability, high quality lifestyle, lack of a state income tax, and investment in transportation infrastructure will give the Seattle metro area a strong competitive advantage over other West Coast tech centers and will ensure the Emerald City remains a desirable location for millennials from around the nation.

Information was obtained from sources deemed reliable but cannot be guaranteed. Reader is encouraged to perform independent due-diligence before relying on information contained herein.