How the Rust Belt is Attracting Millennial Home Buyers
Midwestern states including Ohio, Michigan, and Wisconsin, sometimes known as the Rust Belt, are experiencing a revival. After the decline of manufacturing bases like Detroit, this region suffered economically. As coastal home prices increase, and more companies and businesses are choosing to migrate to the Midwest and Great Lakes regions for lower taxes and affordable housing more, causing more Millennials are to put down roots in the Rust Belt.
Formerly known for its steel production and automotive plants, the labor markets across the Midwest and the Great Lakes regions have changed. Unused factories in metropolitan areas like Pittsburgh, Cleveland, and Buffalo are being converted by tech firms like Google’s Alphabet, Uber Technologies Inc., and Amazon. Unlike costlier tech-heavy hotbeds, like Silicon Valley, investors find cities across the Rust Belt to be more attractive investments, and easier to grow and scale.
Median home prices tend to be highest in coastal cities and densely populated metropolitan areas. In the Midwest, home prices are appreciating much less drastically, and the farther Millennials choose to move from city centers the better. With more and more companies offering flex time and remote options, many Millennial home buyers don’t have to commute and can choose to live in suburban areas farther from densely populated urban metros. Lower home prices translate into lower down payments and more buying power for home buyers who could have been saving to buy in more expensive locales.
Recovering Rust Belt metros also have more distressed properties and foreclosure homes available. Home buyers can save money buying homes in need of repair or renovation and finance the cost of the home plus the rehabilitation project with loan options like the 203K Renovation Loan. The home buyer can then choose to continue occupying the home or sell for a profit later. Before buying a distressed property or foreclosure, the home buyer should discuss their options with a mortgage professional and determine whether or not the property is worth the investment.
Real estate brokerage LeadingRE CEO Paul Boomsma commented on the Midwestern growth, “millennials are swiping up properties for next-to-nothing prices near downtown city areas that have completely revitalized.” As the unemployment rate continues to sink to historic lows, job growth will likely continue to power the housing market. With more and more companies seeing value in Midwestern expansion, the Rust Belt will likely continue to experience positive redevelopment.
Sources: CNBC, CNBC