SAN DIEGO—San Diego is a hotbed for biotech, defense and engineering companies and offers an endless amount of activities Millennials enjoy doing, so they're willing to pay the high cost of living here, JLL senior research analyst Patrick Ashton tells GlobeSt.com. According to a recent report from the firm, ESRI and BLS, nearly one-third of San Diego's population is a Millennial, defined as ranging from ages 18 to 34. Of the nation's largest cities, San Diego has the second-biggest Millennial share with more than 1 million.
The report also states that San Diego young working professionals are largely responsible for San Diego's population growth of 7.5% from 2010 to 2017. During this time period, the county added 160,000 jobs, with 2017 having the lowest unemployment rate in this market in 10 years at below 4%. Many of the working Millennials are highly concentrated in the urban live/work/play neighborhoods; between the ages of 18 and 34, working Millennials currently have a 40% share of Downtown residents.
The city's top universities have also been a major factor in the growing Millennial population. According to the report, campus-enrollment numbers for UC San Diego have grown over 33% in the last 10 years.
We spoke with Ashton about the factors drawing Millennials to this market, how they navigate the high cost of living here and how likely they are to stay in this market.
GlobeSt.com: What's attracting Millennials to San Diego?
Ashton: Millennials and San Diego go together like peanut butter and jelly since the city has endless amount of activities Millennials enjoy doing. The long list includes world-class beaches, great hiking trails, Comic Con, top universities, more than 150 craft breweries, a surge of new restaurants and a smorgasbord of neighborhoods with their own subcultures. Downtown has been somewhat of a national success story with its live/work/play environment.
GlobeSt.com: What does the region have to offer Millennials that other regions may lack?
Ashton: San Diego is a hotbed for biotech, defense, and engineering companies. Since the recession, scientific and technical employment has grown 15% and is expected to grow more with STEM degrees becoming more desirable. UC San Diego just received more than 116,000 total applications for the Fall 2018 term, second only to UCLA for the University of California schools, proving that San Diego is a desirable city for young people.
GlobeSt.com: How are Millennials getting around the high cost of living in this market?
Ashton: There is a misconception of the country's largest generation that Millennials prefer to live in urban areas. However, we are starting to see a trend of young working professionals moving to the suburbs, buying or renting more affordable arrangements. Compared to other California markets, San Diego is a relatively cheaper alternative with a high standard of living. For example, apartment rents and housing cost are the lowest compared to San Francisco, Silicon Valley and Los Angeles. Other California cities apartment rents range from $2,500 to $2,800, while San Diego average is at $1,900 a month.
GlobeSt.com: How likely are Millennials to stay in this market for the long term?
Ashton: The Millennial generation is here to stay, and it will most likely increase over the next few years. Companies are expanding and entering the market for the high talent pool and, most of all, affordability. Office rents for the Bay Area range from $47 to $58 a month per square foot, while San Diego average office cost is at 32% to 45% less at $32 a month per square foot. Essentially, more companies growing means more jobs for young working professionals.
The only dilemma is that housing is already an issue in San Diego from its regional constraints. There may be a silver lining with this housing dilemma since Millennials tend to desire higher-density areas. It is expected that developers will begin building higher-density suburb communities to accommodate Millennials.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
