Millennials Continue To Trade City Life For The Suburbs
Millennials, just like their parents and grandparents before them, continue to trade the stench odors of cities for the fresh air of suburbs. According to the latest Census data for 2018, 27,000 Americans aged 25 to 39 moved away from U.S. cities where the population exceeds 500,000. Large cities have now seen seen their millennial population decline for four-consecutive years.
Suburban towns now represent 14 of the 15 fastest-growing U.S. cities where the population exceeds 50,000. The top three fastest-growing cities are probably ones you've never even heard of - Buckeye, Arizona, New Braunfels, Texas and Apex, North Carolina.
As millennials are starting to reach the age where they're having families, there's two main reasons they're giving up the city life. Unsurprisingly, their main reason for leaving cities is unaffordable housing. Additionally, they're seeking better schools for their children. They're tending to flock to cities with good jobs, access to nearby large cities and warm weather.
PwC coined a new term, known as "hipsturbia," in its Emerging Trends in Real Estate 2020 report that it's applying to millennials moving to the suburbs. As was popular in the cities, they want the same live/work/play environment in the suburbs. “These cities have a music scene, coffee shops, art scene and real estate with grit, affordability and creativity,” said PwC's Real Estate Leader.
Despite moving to the cheaper suburbs, buying a home is still out of reach for the majority of millennials who are saddled with student-loan debt. A study found that just 5% of millennials would be able to afford a home within the next year, with a third saying they'd have to wait five or more years. 62% of respondents said they lacked the money for a down-payment. Based on current savings rates and real estate prices, it would take two-thirds of millennials at least 20 years before they could afford a mid-priced condo.
Homes most likely to be purchased by first-time homeowners, those priced in the bottom third of the market, have seen prices increase 57.3% over the past five years, while supply has fallen has fallen by 23.2%. With the median household income flat over the last 20 years, when adjusting for inflation, these houses may never be affordable for most.
Unfortunately, or fortunately from the eyes of people who own a home and think it's a giant headache, many from this generation may never own a home. Given the unaffordable housing crisis, it's not surprising San Francisco recently sold out of $1,200 bunk beds.
WeWon'tIPO. WeWork's parent, The We Company, formally withdrew its S-1 filing, officially putting an end to its IPO drama. WeWork's co-CEOs said “We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong.” Whether the fundamentals are strong is debatable, however, as the company burned more cash than it reported in revenues last year. This doesn't mean an IPO is out of the question in the future, as the co-CEOs also said “We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future.” Meanwhile, we anxiously wait to see who will play Adam Neumann in the WeWork movie.
How do you say Venmo in Mandarin? China's Central Bank, The People's Bank of China, has approved PayPal's acquisition of a 70% stake in GoPay, which holds licenses for online and mobile financial transactions. Through the acquisition, PayPal will now be the first foreign payment platform to offer online payment services in China. A report estimated that by 2023 China will have 956 million active mobile payment customers, a 70% increase from 2017. In a statement, PayPal said "We are honored to become the first foreign payment platform to be licensed to provide online payment services in China."
Don't let that revolving door hit you on the way out. Google's parent, Alphabet, has hired Robert M. Califf, the former Commissioner of the U.S. Food and Drug Administration, to head strategy and policy for the company's health subsidiaries Verily Life Sciences and Google Health. Califf, who was appointed by former President Obama, served as head of the FDA for less than one year. Prior to his post as FDA Commissioner, Califf worked at Duke University and did consulting work for a multitude of pharmaceutical companies. Califf was considered for the top job at the FDA as early as 2009, but was said to be too closely tied to the drug industry.
Blue Horseshoe didn't like Innate Immunotherapeutics. U.S. congressman Chris Collins from New York resigned yesterday in anticipation of his expected guilty plea today to insider trading charges. Collins was on the board of Australian biotechnology company Innate Immunotherapeutics, owning a nearly 17% stake, when he was tipped off by the company's CEO that a drug it had been testing failed its clinical trial. Collins shared the news with his son who subsequently shared the news with his fiancée and her parents. Although Collins didn't sell his shares, the others did and avoided more than $750,000 in losses as shares fell 92% on the news. Collins' son and his fiancée's father are also expected to plead guilty to insider trading charges.
A scholarship just isn't enough. California Governor Gavin Newsom signed into law the Fair Pay to Play Act, which will enable collegiate athletes to earn money through endorsements. The law, which goes into effect in 2023, will not require universities to pay the student-athletes, but rather make it illegal for them to prevent student-athletes from earning money from the use of their names, images and likenesses. Current NCAA rules prohibit student-athletes from accepting compensation related to their status as a college athlete. The NCAA had previously asked Newsom to hold off on taking action while they study the issue, calling the law “unconstitutional” and a “scheme.”