Millennials in Tech Are Boosting Arizona Real Estate
May 12, 2018
President and CEO, Arizona Technology Council
The rise of millennial talent in Arizona has greatly influenced the startup economy, the corporate environment, and the real estate industry. Although millennials tend to be victims of accusations of laziness and being thin-skinned, those in Arizona’s technology space are making a big impact. They are graduating from Arizona’s top university programs, starting up companies at a rapid rate, attracting major technology corporations to Arizona, and they’re on their way to becoming major players in the real estate market.
As the first generation born into this modern era of technology, millennials have a competitive advantage when it comes to developing new and improved technological innovations. Millennials are dominating the state’s technology startup ecosystem, accounting for some of Arizona’s largest startups such as WebPT, Infusionsoft, Tuft & Needle, and more. This can be attributed to both the generation’s affinity for technology and the increase in networking spaces on which previous generations missed out.
Thanks to millennials, the health of Arizona’s startup ecosystem is flourishing — and that hasn’t gone unnoticed. The entrepreneurial activity generated by millennials has drawn national attention to Arizona as a viable place to start and grow a technology business. Startups here have received a considerable amount of investment money in addition to benefitting from the state’s pro-business outlook.
The startup craze also has been successful in attracting large companies that want to capitalize on the technology talent. Arizona is home to some of the country’s most innovative universities, which have been attracting some of the nation’s leading technology companies. For example, Benchmark Electronics recently moved its corporate headquarters from Texas to Tempe and partnered with Arizona State University, thus allowing Benchmark to leverage the capabilities of ASU’s graduates, who company recruiter Jake Miller calls “super smart.”
When large corporations relocate to Arizona, the overall number of available jobs increases tremendously. For example, as Benchmark plans to hire about 500 employees, established companies also are increasing their payrolls. This includes 3,000 workers for Intel in Chandler, 1,000 for USAA in Phoenix, and 2,000 for Raytheon Missile Systems in Tucson.
The increase in job opportunities here also translates into an increase in millennial talent looking to buy or rent homes. With thousands of millennials expected to relocate to Arizona in the upcoming year, the real estate industry looks at this generation as a big opportunity.
However, the buying psyche of millennials was affected by experiencing the Great Recession at a fairly young age. The dramatic downturn in new single-family housing spurred a rise in the rental economy still seen today. Because builders halted home construction, new apartment complexes took over, especially in the Phoenix area. While the rental economy may be finally stabilizing, it’s key to remember that some millennials face other burdensome financial obstacles — specifically, student loans of $100,000 or more. This is not to say that buying a home is out of reach for all millennials, but such factors might deter some millennials from purchasing homes as soon as they start their jobs here.
Of course, the story should get better as millennials age. Millennials are expected to become the most substantial group of Arizona homebuyers over the next decade as they climb the career ladder, start families of their own, and shy away from the rising costs of rent.
Millennials in technology have contributed immensely to the vitality of Arizona’s business community. Because of their talent, Arizona has been able to position itself as a rising star in the nation’s startup community and attract top corporations to the state. With their increasing buying power, millennials are destined to make their mark on Arizona’s real estate industry.